Dematerialisation Rematerialisation

Dematerialisation
Rematerialisation
Meaning

The process in which shares in the physical form are converted into an electronic form is called dematerialisation of the shares.
The process in which the shares in an electronic form are converted again into physical form is called rematerialisation of shares.
Account of the shares:

On dematerialisation of shares, the account of the shares in electronic form is maintained in the demat account by Depository Participant (DP).
On Rematerialisation of shares, the account of the shares in physical form is maintained by the company.
Conversion

Shares are converted from original physical form into an electronic form.
Shares are converted from an electronic form again into physical form.
Option:

Recently the SEBI made dematerialisation compulsory for those shares and securities which are often traded on a large scale.
The process of conversion of shares from the electronic form again into the physical form is still optional and involuntary.
Possession of Shares.

Due to dematerialisation, the actual possession of shares and security passes from the investor to DP.
Due to rematerialisation actual possession of shares and security passes from DP to the investor.