Dematerialisation is a process by which physical certificates are converted into electronic form.
Once a security is eligible for holding in CDBL then all stock exchange trades must be settled through the depository. This means that sellers must have securities in the depository (i.e. the securities must have been dematerialised) before the broker can execute the sale order.
To dematerialise securities investors should take their share certificates to a participant. The participant will request the investor to complete a dematerialisation request form. The participant will take the documents to the issuer who (if the certificate is valid) will update the register by moving the securities from the certificated portion of the register to the depository portion. The issuer will then confirm the dematerialisation to the depository and the depository will credit the securities to the investor's account.
The participant will be able to see the balances in all the accounts that they control through a computer link with CDBL.
Investors do not need to wait until they wish to sell to dematerialise their holdings. Once a security is eligible, investors may open accounts and lodge securities at any time.