Difference between Dematerialisation and Rematerialisation (7 Points) | Important Article
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Difference between Dematerialisation and Rematerialisation
Meaning of Dematerialisation
(Demat) is a process whereby a client can get physical certificates converted into electronic mode. The client has to surrender the certificates along with the Demat Request Form (DRF). The DP forwards these to the Depositor who in turn forwards it to the Issuer. After confirmation from the Issuer, the Depositor will credit the securities in the Demat A/c with Depository Participants.
Meaning of Rematerialisation
(Remat) is the process whereby a client can get his electronic holdings of securities converted into physical certificates. The client has to give a written request in the form of RRF (Remat Request Form) to the DP. The DP forwards the RRF to Issuer and the Depository. The Issuer prints the certificates and sends them to the client and simultaneously confirms the acceptance of Remat request to the Depository. The Depositor via the DP debits accounts of the client with those securities.
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- Difference Between Owned Capital and Borrowed Capital
- Difference Between Debenture and Share
- Difference Between Preference Shares and Equity Shares
Difference between Dematerialisation and Rematerialisation
| Points | Dematerialization | Rematerialization |
| 1) Meaning | Process of converting Physical certificates of securities into electronic form. | It is the process of conversion of electronic form of securities into physical form. |
| 2) Conversion | Here, the paper form of securities is converted into digital/ electronically held securities. | Here, the electronic records are converted into physical/paper form securities. |
| 3) Use of Form | It uses ‘DRF’ Viz. ‘Dematerialization Request Form’ from Investor to the DP. | It uses ‘RRF’ viz Rematerialization Request Form’ from Investor to the DP. |
| 4) Sequence | This is an initial process. It is a primary and Principal function of the depository. | This is a reverse process. It is a secondary and supporting function of depository. Already demated securities are remated. |
| 5) Identification of Securities | Demated securities have no distinctive numbers. They are fungible. | Remated securities will have certificate and distinctive numbers as issued by company. |
| 6) Securities Maintenance Authority | Depository is the custodian of securities and records. | The issuing company is the record keeping authority. Securities are maintained b the investor. |
| 7) Difficult of Process | Demat is an easy process. Also, it’s not a time consuming process. | Remat is not only a time consuming but also a complex process. |
