Dematerialisation refers to the conversion of share certificates (physical paper‐form / certificates or documents of title representing ownership of securities) to an electronic form which is domiciled directly with the Central Securities clearing system (CSCS).
The dematerialisation process necessitates the shareholder to open an account with CSCS through a Stockbroker. Though, the shareholder has to fulfill the KYC requirements of the Stockbroking firm before the account could be opened by the stockbrokers.
After opening the CSCS account, you are required to complete separate Dematerialisation request form (DRF) with appropriate signature(s) as held in the Registrars’ record for securities of different companies. You need to surrender the physical certificates to the Stockbrokers along with a DRF.
The Stockbrokers will then verify that all the details in the form are correct, like the number of certificate(s), securities, type and so on.
The Stockbrokers will send the certificate(s), form and copy of CSCS statement of account indicating the Clearing House Number (CHN) of the shareholder to the Registrars for processing.
If everything is in order, (that is, the details and signature provided by the shareholder are correct, the share certificate(s) are verified by the Registrar) the dematerialisation request is processed by the Registrars in its system
The Registrars forward the processed dematerialisation request to the CSCS, in an electronic format via the Data Exchange Platform operated by CSCS.
CSCS updates the shareholder’s account with the corresponding securities and units.
Shareholders can request for a CSCS statement of account detailing the shareholding position and the corresponding units from the Stockbroker.
In certain cases, the Registrars may not accept your request for dematerialisation. These instances include:
• If your signature is irregular / differs compare to what is held in the Registrars record
• If there is a disparity in your name in Registrars record compare with your account with CSCS
• If you use a single DRF to dematerialise securities of more than one company