The control on creation and extinguishing securities in demat form in NSDL depository system is with issuers. Securities in demat can be created in two different ways. The first method is by converting the physical securities into demat form by confirming demat requests received. The second method is by way of corporate action. Under this method, issuer releases instructions to NSDL to credit eligible beneficial owners with securities as per their entitlements.
Securities in demat form can be extinguished in two ways. The first method is by confirming rematerialisation requests received i.e. converting demat form securities into physical certificate form. The second method is by debit corporate action. Under this method issuer releases instructions to NSDL to debit eligible beneficial owners with securities as per their entitlements.
Further, the control on the number of securities in demat form on a daily basis is also retained with the issuers. This control is exercised by way of daily reconciliation between NSDL holdings with physical holdings.
All the above controls require means of continuous electronic communication between NSDL and issuer. Issuer may establish such communication link by setting a computer facility called DPM-SHR by itself or by utilising such facility set up by Registrar & Transfer Agents.