Should the securities be in my demat account for a Loan Against Securities (LAS)?

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Yes, securities must be held in dematerialised form. 

Product	Demat Account Requirement
Digital Loan Against Shares	Shares must be held in a single holder NSDL demat account with any DP (broker)
Loan Against Shares	Shares must be held in a demat account with any DP (broker)
Loan Against Mutual Funds	Units must be held in your Geojit demat account
Loan Against Sovereign Gold Bonds	Units must be held in a demat account with any DP (broker)