Difference between Dematerialisation and Rematerialisation

Dematerialization: This is when the physical share or debenture certificate is converted to an electronic format. It is easier to manage investments in securities and shares when all certificates are in electronic form. This reduces fraud and forgery that used to be rampant in the absence of electronic records. The electronic records in the case of dematerialisation are kept at a depository. The Indian National Securities Depository Limited (NSDL), and the Central Depository Services (Indian) Ltd (CDSL are authorized depositories.

Rematerialisation Any investor who has converted securities or debenture certificate to electronic formats can choose to convert them back to physical form. Rematerialization is a way to avoid having to pay the maintenancefee for a Demat account with only 1 or 2 shares. This is the conversion of all securities in electronic form to physical certificates. To request a Remat Request Form, (RF), you will need to complete it and send it to the Depository Participant.

Comparison ParametersDematerialisationRematerialisation
SignificanceTransform physical shares and debentures certificates into electronic formConversion of electronic records to paper (physical form)
Identification of SharesShares dematerialized do not have a distinct amountThey have distinct numbers that were issued by the RTA
Transaction ModeAll transactions are done electronically onlyAll transactions post-rematerialisation take place physically
Account Maintenance AuthorityAccount maintenance is handled by the Depository participant (NSDL/CDSL).Account maintenance is the responsibility of the company
Maintenance costsMaintenance fees range from Rs. 500 to Rs. 500 to Rs. 500 and Rs.Physical certificates are free of maintenance fees
SecurityThere are very few threats to the digital form.The threat of fraud and forgery to physical paperwork is greater
DifficultyIt is simple to dematerialize. It is an integral part of share trading. Nearly all investors have experienced it once.Rematerialization is a complicated process that can take a while. This is a difficult process that may require expert assistance.

Rematerialisation processes and dematerialisation are diametrically opposed to each other. Rematerialisation is simply the reverse of dematerialization.

Guideline for the dematerialization of securities and shares

You will need a Dematerialization Request Form (DRF) to convert any physical share, debenture certificate or other form into an electronic format.

  1. The process is simple and complete. It all starts with the Demat account. Depository Participant (DP), who offers Demat services, is required.
  2. Complete the DRF form and send it along with your share certificates. On each certificate, mention "Surrendered For Dematerialisation".
  3. The DP should forward the request along with the share certificates to the registrars, transfer agents, and depository.
  4. The registrar informs DP about the status of the process
  5. After confirmation, the credit for shares is added to the investor's account.
  6. It can take up to 30 days for electronic share transfers

Guideline for the rematerialization of securities and shares

You will need the Remat Request Form (RF) to receive the dematerialized securities in their original form. This is a quick overview of the rematerialization process.

  1. The RRF must be submitted by the client to the DP
  2. The form is presented by the DP to the depository. The request is forwarded to the registrar by the depository
  3. The DP forwards the forms to registrar
  4. The registrar issues new certificates in physical form and forwards them to the investor.
  5. The Remat request is confirmed by the registrar to the depository. Investors receive the new certificates in their account with the DP.
  6. Rematerialization can take up 30 days

How do I sell and purchase dematerialized securities?

In fact, the process of selling and buying dematerialized securities is identical to that of selling and buying physical securities. This is a quick overview of the selling and buying processes

Buy dematerialised securities

  1. For the transaction, find a trustworthy and experienced broker
  2. The securities are transferred to the broker's account the day after the purchase.
  3. The broker contacts the DP to debit his account and credit the investor's account.
  4. In order to receive the credit, the investor must send a receipt instruction to DP.

Selling dematerialised securities

  1. You have the option to sell via a broker on any of the stock markets connected to NSDL
  2. Instructions for debiting the BO account and crediting the broker's account should be sent to the DP.
  3. The instructions slips will contain the instructions for the broker to give to the DP to deliver the order slips to the clearing company.
  4. The stock exchange pays the broker, and the seller receives the proceeds of the sale.

Transactions are now easier and more seamless thanks to dematerialization. This has reduced fraud and forgery risks and opened up the market to small investors and new traders.

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