Dematerialisation is the process by which a physical certificate of holding a share or bond or mutual fund unit is converted into an “electronic balance”. Demat form is short form of dematerialized form. A Demat account is used for storing mutual funds in demat format.

In order to convert a physical holding into demat form,

  1. We contact our depository participant (DP) – demat account provider
  2. The DP checks the validity of our holdings with the issuer – the AMC or the registrar  and transfer agent (eg. CAMS, Karvy) in case of mutual funds.
  3. The AMC makes the DP the holder of the security (while we are owners)
  4. Then it will reflect in our demat account