The previous chapter talked about the entities that take part in the dematerialisation process. In this chapter, you will learn how the process works and how these entities interact with each other.
You can get your commodities dematerialised in three steps:
Step 1: Delivering the commodity and the demat request form
You deliver your commodity to a warehouse accredited by the exchange where you wish to trade. The warehouse will check the commodity for quality according to the procedure prescribed by National Securities Depository Ltd (NSDL). If your goods pass scrutiny, the warehouse will accept the delivery and give you a receipt.
You will also have to submit a filled-in demat request form. It will be used to create your demat account and update your credit balance .
Step 2: Forwarding the acceptance information
The warehouse will now send the acceptance information to the registrar and transfer (R&T) agent. The R&T agent will update the records and relay the information to NSDL.
Step 3: Crediting the ICIN balance
Upon receiving the delivery confirmation from the R&T agent, NSDL will allot you a unique identification number. This is the International Securities Identification Number (ICIN). You can use it for all delivery-related communication with NSDL in future. NSDL will then credit your demat account with the ICIN balance. You can open the account with any depository participant. The balance depends on the price and quantity of the commodity that you delivered. The dematerialisation process is complete when the ICIN balance is credited to your account.
Any financial market experience is full of jargons and complex-sounding words. You may need to know many words that are used commonly in the commodity market. Allow us to take you through a glossary of commodity market terms starting from A to C in the next section.