The study provides details and process of dematerialization of shares and also provides the chronological background on various developments of departments like CSDL and NSDL. What began with a single click over 28 years ago has now taken the world by storm. The concept visualized by Bill Porter who provides online quotes and trading services to many US firms like Fidelity, Charles Schwab, and Quick and Reilly1. The object of this article is to provide the detailed concept of dematerialization of shares therefore which states that Dematerialization offers tractability along with security and convenience. Holding share certificates in physical format create risks like certificate forgeries, loss of important share certificates, and consequent delays in certificate transfers due to which this concept of conversions of shares in physical get introduced. Thus shares in electronic form have to keep in the DEMAT account as it has been the necessary condition imposed the law and DEMAT is mandatory for public listed companies, even private limited companies can opt for it.2 Under depositories act 1996 clearly states about the holding and working of the shares in physical or electronic form, therefore, this option is available with each and every shareholder. The converted electronic data is stored with the depository from where they can be traded. It is analogous to a bank where a shareholder opens an account with any of the depository participants. Currently, National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) are registered with SEBI to act as Depositories in India as will be discussed in detail further. Taking into consideration the process of dematerialization includes some of the participants which are as follows: Issuer Company, Depository, Depository Participant, Registrar and Transfer Agent and Shareholder.
1 http://shodhganga.inflibnet.ac.in/bitstream/10603/25815/12/12_chapter%202.pdf visited on 17-01-2018, at 22:02 pm.
2 https://novojuris.com/2017/06/06/dematerialization-of-shares/ visited on 17-01-2018.