Dematerialization (DEMAT) is the move from physical certificates to electronic bookkeeping. Actual stock certificates are then removed and retired from circulation in exchange for electronic recording.
KEY TAKEAWAYS
- Dematerialization (DEMAT) is the move from physical certificates to electronic bookkeeping.
- DEMAT accounts are required by some trading institutions due to the fact they are the most accurate form of record keeping.
- Dematerialization was designed to offer more security, as well as increased speed, to financial trades. It has become the norm in bookkeeping for financial institutions.