- The Depository Participant sends an Electronic request to the
Depository for dematerialization of Securities. - The Depository Participant forwards the Demat Request Form
and the Certificates to the Registrar. - The Registrar confirms the request from the Depository and on
certification of details will proceed to destroy the Certificates
in the specified time frame. - The Registrar credits the depository account as registered
owner in Company Books. - The Depository updates its accounts and confirms the
dematerialization to Depository Participant. - The Depository Participant then credits the Investor’s account
with the number of shares so dematerialized and thereafter the
Investor holds the securities in Electronic Form.
The Investor will be given a Pass book or Statement of holding which will be
Dispatched to him periodically giving him his latest status. The Depository Participant
will charge an Investor for the services offered. There are various types of fees: Account
opening Fee, Custody Fee, Dematerialization Charges, Rematerialisation Charges, etc.
These charges differ considerably from one Depository Participant to another.
An Investor can also exercise his option of holding shares in Electronic Form at
the time of initial public offer. In that case, the Issuer shall inform the concerned
Depository about the allotment of the securities and record the Depository as the
registered holder of Securities. Having received such intimation, the Depository shall
record the name of the allottee as the beneficial owner in its books.
To settle account transfer with depository for trades, carried out on the exchange,
the depository will interface with the clearing houses for delivery and receipt of
obligations. Under the depository framework of settlement, depository will not transfer
securities from delivering member to receiving member until the clearing house confirms
that all funds have been received. The Settlement of funds will be outside the depository.
The following process flow outlines this clearing and settlement procedure: