Maharashtra State BoardHSC Commerce 12th Board Exam
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P Dematerialisation and Rematerialisation - Secretarial Practice

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Distinguish Between

Dematerialisation and Rematerialisation 

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Solution

Dematerialisation and Rematerialisation 

Basis Dematerialisation Rematerialisation
(1) Meaning The process in which shares in physical form are converted into an electronic form is called Dematerialisation of Shares. The process in which shares in electronic form are converted again into physical form is called Rematerialisation of Shares
(2) Account of Shares On dematerialisation of shares, the account of the shares in the electronic form is maintained in the Demat Account by Depository Participants. On rematerialisation of shares, the account of the shares in physical form is maintained by the company.
(3) Conversion Shares are converted from original physical form into an electronic form. Shares in electronic form are converted again into physical form. 
(4) Option  Recently, SEBI has made dematerialisation compulsory for those shares and securities which are traded on large scale. The process of conversion of shares from the electronic form back into physical form is optional and involuntary. 
(5) Possession of Shares Due to dematerialisation, the actual possession of shares and securities passes from the Investors to Depository Participants. Due to rematerialisation, the actual possession of shares and securities passes from Depository Participant to Investors.
Concept: Depositories and Dematerialization of Securities - Meaning
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