Asian Share Market, Asian Stock Market

Dematerialization- What it means
Dematerialisation is the process by which physical share certificates of an investor are converted to an equivalent number of securities in an electronic and fungible form. These shares are credited into the investor’s account maintained with his depository participant (DP). This account is also called Beneficiary Owner (BO) account and can be compared to a bank account. The only difference being that instead of cash, your BO account will be holding securities in your account.

If you hold physical shares, you may like to convert them in electronic format. This is required as almost 99.9% of settlement in India today takes place in the dematerialized form. The procedure for conversion from physical to demat is very simple. You have to fill in a DRF (Demat Request Form) which is available with the DP and submit the same along with physical share certificates you wish to dematerialise. Separate DRF has to be filled for each ISIN Number. The complete process of dematerialisation can be summed up as follows:
•    Surrender physical certificates for dematerialisation to your depository participant where you have opened the BO account.
•    Depository participant intimates Depository (NSDL or CDSL) of your conversion request through the system.
•    Depository participant then submits the physical certificates to the registrar of the Issuer Company. Sometimes the company operates in house registry services. I this case, the certificates are submitted to the company.
•    Registrar or the in house registration department confirms the dematerialisation request with the depository and after dematerialising the certificates, Registrar updates accounts and informs depository of the completion of dematerialisation.
•    Depository updates its accounts and informs the depository participant. There after depository participant updates your demat account and the account now reflects the number of shares held by you in the electronic or book entry form.

All about ISIN
It is a good idea to have a look at ISIN (International Securities Identification Number) as you will be quoting it while transferring shares from your BO account as well while converting physical shares into dematerialized form. ISIN is a unique identification number for a security. National Securities Depository Limited (NSDL) issues ISINs in India and a complete list of ISINs is available on its website, which is www.nsdl.co.in. You may note that ISIN of a security changes in case of certain corporate action such as split in face value of shares, consolidation of share capital, merger and change in capital structure etc. Hence you have to quote the correct ISIN at the time of giving dematerialisation request as well as at the time of transfer of shares. If you give a wrong ISIN, your request may not go through and shares sold by you may go for auction or close out, resulting in losses to you.

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