The replacement of physical certificates of financial securities with an all-electronic system in which electronic signals or bits are assigned to these securities so they can be enrolled in relevant registers to the effect of ownership and for the sake of bookkeeping. Therefore, dematerialized securities are securities that are not physically “materialized” on paper. Instead, they only exist as entries in the books of depositories. The so-called “demat system” works through a depository who is registered with the securities and exchange commission or board to take on the functions of a depository under relevant regulations.