It is a process to convert existing physical securities such as share certificates and other documents to electronic format. For conversion, a person is required to open a Demat account with depository participant and file a dematerialisation request form along with his share certificates.
The conversion is maintained in an account with the depository participant. Currently, there are two depositories which registered with Securities and Exchange Board of India (SEBI) and are licensed to operate in India:
After dematerialisation of shares, one can sell, purchase or transfer their shares from anywhere they want. The dematerialisation process normally takes between 15-30 days.
Dematerialisation of shares helps investors in avoiding various problems that they have to face while dealing with securities. They help in minimising the paperwork that is involved with the ownership, trading, and transfer of securities.