Issue and allotment of securities in a Public/Rights/ Offer for Sale must be only in a dematerialised format. However, an option must be given to the subscribers to receive the securities in a physical format, i.e., via a certificate.

Even shares of an unlisted company or a private limited company can be dematerialised.

Currently there are two Depositories, NSDL (National Securities Depository Ltd.) and CSDL (Central Securities Depository Ltd.) and several Depository Participants or DPs associated with one or both of these Depositories.

The company whose securities are to be dematerialised must execute an agreement with the depository.

A shareholder needs to open a new demat account with a DP for every separate combination of shareholding, e.g. Mr. X / Mrs. X and Mrs. X / Mr. X would be two separate accounts.

All listed shares are compulsorily traded only in dematerialised format.

Transfer of securities in a dematerialised format is exempt from stamp duty as applicable to a transfer of shares under the Indian Stamp Act which is leviable @ 0.25%. The transfer would however, attract demat charges.