(2) Dematerialisation

This is a process where securities held by the investor in the physical form are cancelled and the investor is given an electronic entry or number so that she/he can hold it as an electronic balance in an account. This process of holding securities in an electronic form is called dematerialisation.

Depository: Just like a bank keeps money in safe custody for customers, a depository also is like a bank and keeps securities in electronic form on behalf of the investor.

Liquidity: It refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price.

Marketability: Something that is marketable is able to be sold because people want to buy it.