Dematerialisation
Pronunciation: dee-muh-teer-ee-uh-lih-ZAY-shun
The process of converting physical securities certificates into electronic book-entry form held on the records of a depository or transfer agent.
Full Definition
Dematerialisation refers to the elimination of paper stock certificates and their replacement with electronic records of ownership maintained by a transfer agent or central securities depository. The process is typically initiated by the shareholder submitting their certificate to the transfer agent, who then cancels the certificate and credits the shares in book-entry form. Dematerialisation reduces risks associated with lost, stolen, or counterfeit certificates. Editors working on UK and Commonwealth documents should note the British spelling 'dematerialisation'; US documents may use 'dematerialization'. Both spellings are acceptable depending on jurisdiction and house style.
Usage
Usage note: Use 'dematerialisation' for UK/Commonwealth documents and 'dematerialization' for US documents. Do not confuse with 'rematerialisation', which is the reverse process.
In Context
- "Shareholders holding physical certificates are encouraged to complete dematerialisation before the record date." — Shareholder Letter
- "The company's dematerialisation programme is being administered by the registrar in accordance with CREST rules." — UK Regulatory Announcement