The increase in electronic technology and the introduction of systems, such as, Crest in the Stock Exchange has meant that paper share certificates are no longer needed. Instead ownership of shares can be logged electronically in a Crest account and contract notes, confirmation of share transactions, can be sent electronically.
It is a process by which an investor gets physical certificates converted into electronic balances maintained in his account with the DP.
Dematerialisation or "Demat" is a process of converting the physical securities into electronic form and stored in computers by a Depository. Securities present in the physical form are surrendered to the respective company which will then nullify them and credit the depository account.
Up to October 2003 the main title deed for registered land (the land on the Charge Certificate) was held in traditional paper form. The Land Registry has now 'dematerialised' the paper deeds and the evidence of title to the property is held electronically at the Land Registry. Some lenders have opted for 'full' dematerialisation and hold little or no title documentation of any kind in paper form any more, with most original documents being returned to the borrowers. We have taken this approach.
Process of converting a security from physical form to electronic form
The process of getting rid of paper in financial transactions. The rise of computers and the internet has meant that more processes can be carried out electronically without the need for expensive and slow-moving bits of paper clogging up the system. For example, the introduction of Crest, the stock exchange's electronic settlement system, means that share certificates are no longer issued as proof of ownership, unless you specifically ask for them. You have to pay more if you want this. Contract notes - confirmation of share transactions - can also be sent electronically these days. Dematerialisation speeds things up and makes them more efficient.
the elimination of physical certificates or documents of title which represent ownership of securities so that securities exist only as accounting records.
Dematerialisation is the process by which shares in the physical/paper form are cancelled and credit in the form of electronic balances are maintained on highly secure systems at the depository.
A process by which shares in the physical/paper form are canceled and credited in electronic form maintained on a highly secure system at the depository.