What is Dematerialisation?

The process to convert your physical shares into electronic (or dematerialised) form is called dematerialization. Dematerialisation is when you take your physical stockholding online. Why is it important? Let’s get to the background story.

In the 90s National Stock Exchange (NSE) broke the monopoly of Bombay Stock Exchange by taking several measures to stay ahead in the game. It simplified the trading process by introducing demat trading in 1996 doing away with the paperwork. The companies would still issue physical certificates, but gradually most investors switched to demat trading.

Dematerialisation Process
It is a simple process:

Open a Demat Account

Surrender your Physical Shares

Benefits of Dematerialisation
Storing valuables in a physical form gives a sense of security – but only emotionally. What if your physical certificates are lost, get stolen, or burned? You would surely wish for having an online record of it. That’s the greatest benefit of dematerialisation. There are more:

No Misuse: Unlike physical shares that can be forged, shares in demat account are safe. Nobody can take it away from you. It is password protected.

Ease of Access: Buying and selling shares online is a simple process. You can’t have that simplicity and flexibility with physical shares. Transferring physical shares in any case is impossible now.

Conclusion
Dematerialization is mandatory by law. The process may seem complex, but we at AliceBlue will help you at every step to make it a cakewalk. So if you do have some physical share certificates lying in your cupboard that you hardly unlock, it’s time to rummage through it.