Dematerialisation is the process of converting physical share certificates into electronic form, held in a demat account through a depository, making shares fungible and eliminating distinctive numbers.
Source: Chapter 6
The examiner expects a one-line definition covering two key ideas: (1) conversion of physical certificates to electronic form, and (2) the role of a depository/demat account. The word "fungible" is a bonus term that shows understanding. Avoid writing more than one sentence for a 1-mark question.