Articles

Procedure to Transfer Shares from One Demat Account to Another

by Pooja Shetty Financial Advisor

Many individuals prefer holding shares in the electronic form, as opposed to paper form. Holding shares in an electronic form, through a dematerialization account, offers a high degree of flexibility and convenience. It eliminates various risks associated with physical certificates, such as theft, fake certificates, and bad delivery, besides others. Another major benefit of holding shares in a dematerialization account is the ability to transfer the shares from one account to another quite easily.

You may transfer shares from one Depository Participant (DP) to another due to various reasons. It is possible that you have had a bad experience with your current stock broker, and hence are looking for a change. Besides, you may wish to avail of additional services, which your current broker is unable to provide, such as expert advice, research reports, and stock market investing tips. You may also prefer dealing with a new stock broker in case you identify one offering a higher discount.

Step-by-step guide to transfer shares from one account to another

Contrary to the popular belief, transferring shares from one demat account to another is a simple process. There are two ways this may be done, either manually or through the Internet.

1.    Transferring shares manually

When you open a dematerialization account with your stock broker, you are given a welcome kit. The welcome kit contains a Delivery Instruction Slip (DIS). You may fill the necessary information requested on the slip. Some of the details required to be filled in include Depository Participant’s name and your Target Client ID, which is a 16-digit unique number allocated to you. You also have to provide an International Securities Identification Number (ISIN), which is a 12-digit number that helps differentiate equities, debt, bonds, and other instruments. If you are making the transfer to another depository, you have to fill in Inter-Depository information, while Off Market details need to be provided if the transfer is within the depository.

Upon filling the required details, it is necessary to submit the DIS to your current broker. The broker will provide an acknowledgment slip, which may be kept for future reference. Upon successful processing, the shares will be transferred from one demat account to another. Remember, the transfer request will be processed only if there is no unpaid debit balance in your ledger and if your shares have not been sold yet. Besides, the gross exposure must be within the available trading limit.

It is important to note that your stock broker may levy certain charges to process your transfer request. The amount charged towards transferring shares from one account to another varies from broker to broker. However, no charges will be levied if you are closing your dematerialization account. In such a case, you may submit the unused DIS back to your stock broker.

2.    Transferring shares through the Internet

If you do not wish to transfer shares manually, you may transfer them through the Internet. You may do so by visiting the Central Depository Services (India) Limited (CDSL) website.

The process to transfer shares from one dematerialization account to another through the CDSL website is quite simple. You may navigate the page and click on ‘Register Online’ option. You may then proceed to select the facility as ‘Easiest.’ The next step is to provide all the necessary details. You may then print the form and submit it to your DP. Upon successful verification, you will receive a password through email. Using these credentials, you may make online transfers without any hassles. Besides, you may even transfer shares on your own in future.

Both manual and online options have their own set of advantages. Your broker will get the work done if you choose the manual option. However, this involves a great degree of dependency. Besides, you will need to submit the DIS again in case you wish to transfer shares in future. Making the transfer through the Internet removes the dependency aspect and allows you to transfer shares whenever you want. This provides you with a high degree of convenience and flexibility.

Non-Resident Indians (NRIs) too may transfer their shares to another account holder. Some online trading platforms provide the benefit of transferring shares from NRI DP accounts in a simplified manner. You may simply visit the website, enter details of the account you wish to transfer to, Transferee Client ID, and Transferee DP ID. Then, a reference number will be provided to you. This number may be submitted to your dealer, broker, or to the customer service team. Your request will then be processed, and the shares will get transferred easily.

You may choose the option that best suits your needs and requirements. The aforementioned process will help you have a simplified transfer of shares from one account to another.


About Pooja Shetty Junior   Financial Advisor

1 connections, 0 recommendations, 14 honor points.
Joined APSense since, November 14th, 2017, From Mumbai, India.

Created on Dec 14th 2017 01:38. Viewed 217 times.

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