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Answer» Distinguish between the Dematerialisation and Rematerialisation. | Basis | Dematerialisation | Rematerialisation | | (1) Meaning | The process in which shares in physical form are converted into an electronic form is called Dematerialisation of Shares. | The process in which shares in electronic form are converted again into physical form is called Rematerialisation of Shares. | | (2) Account of Shares | On dematerialisation of shares, the account of the shares in the electronic form is maintained in the Demat Account by Depository Participants | On rematerialisation of shares, the account of the shares in physical form is maintained by the company | | (3) Conversion | Shares are converted from original physical form into an electronic form. | Shares in electronic form are converted again into physical form. | | (4) Option | Recently, SEBI has made dematerialisation compulsory for those shares and securities which are traded on large scale. | The process of conversion of shares from the electronic form back into physical form is optional and involuntary | | (5) Possession of Shares | Due to dematerialisation, the actual possession of shares and securities passes from the Investors to Depository Participants. | Due to rematerialisation, the actual possession of shares and securities passes from Depository Participant to Investors. |
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