Meaning: -When an investor opts for depository mode he has to approach Depository Participant. Depository Participant is the authorized agent of Depository. The investor should surrender his share certificate to the company through Depository Participant (DP). On confirmation from the company, DP arranges to credit his account with equivalent number of shares.

1.      Opening Client’s Demat account: -The investor has to open Demat account when he wants to dematerialize the shares. The procedure of opening Demat account is simple. The procedure is as follows:

·         The investor has to fill the account opening form. The form is in printed form. The form is available with D.P.

·         The investor has to sign DP client agreement. It states the rights and duties of D.P. it also states the right and duties of client (investor)

·         The D.P. gives the client a unique (one) identification in depository system. The client ID must be quoted in all correspondence with D.P. the DP gives Delivery instruction slip (DIS) for trading.

2.      Submission of Demat Request and Scrip Certificate by Investor: - The investor intending to dematerialize his securities sends a duly filled in and signed Demat Request Form in triplicate along with scrip certificate to Depository Participant.

3.      Forwarding of DRF and scrip certificate to company’s Register: - The DP verifies the documents such as DRF in triplicate and scrip certificate received from investor. The DP gives back the third copy of DRF to investor. The DRF is duly stamped by DP as acknowledgment. The DP puts a cross remark “SURRENDERED FOR DEMAT” on the face of scrip certificate. An original copy DRF along with scrip certificate is forwarded by DP to the company’s register.

4.      Forwarding a copy of DRF to depository: -The second copy of DRF is forwarded by DP TO ITS Depository.

5.      Confirmation of receipt of DRF by Depository: -The depository sends a letter confirming the receipt of DRF to the company’s registrar or its transfer agent.

6.      Uplifting the records by company: -On receipt of confirmation form depository, the secretary of company verifies the signatures of investors on DRF form with the specimen signatures in the company records. Once the verification is completed then the secretary gives client’s ID number it is place of the shares. He mentions the name of concerned depository against shares dematerialized.

7.      Confirmation of Dematerialisation to the Depository: -When the secretary has to update the company record, he sends a copy of minutes of meeting with confirmation of dematerialization to the depository directly or through share transfer agent.

8.      Updating of records by Depository: -On receipt of confirmation of dematerialization, the depository credits the account of investor maintained electronically. It enters the client ID number and other details of investors in its records.

9.      Confirmation by the depository: - The depository will send the confirmation of Demat of securities to its concerned D.P.

10.  Updating the records of D.P: -On receipt of confirmation from the depository the D.P. updates the record of investors and gives him the credit for dematerialized shares in its records of beneficial owner.

11.  Confirmation of dematerialization by D.P: -Finally the DP informs the investor and sends him a statement of accounts.