What is Transfer of Shares?
After creating a Demat account, one can delve deeper into the other functions it can provide. Alongside holding shares and securities, a Demat account can also transfer shares to another Demat account. It helps in the consolidation of shares that makes it easy for a shareholder to have an overall view of all his shares.
How to Transfer Shares from One Demat Account to Another
There can be various instances based on which an investor shall need to transfer shares from one account to another. The possible reasons are:
1. One of the reasons might be to bring all the shares under one roof to handle them easier.
2. Another reason could be the investor’s wish to change the depository participant for a new one that gives better returns at a lower cost.
3. Many shareholders can opt to transfer shares from one Demat account to another because they had a bitter experience with the previous broker.
4. People choose to transfer shares because they want to try other types of investment or for different time periods, or they want to shift from a discount broker to a full-service broker. This is generally seen in people who like to take risks.
Who are the participants while transferring shares from one Demat account to another?
The following people are involved in the process of transfer of shares from one Demat account to another:
1. Current Broker
2. Investor
3. New Broker
4. Depository, i.e., NSDL and CDSL
Process of transfer of shares from one Demat account to another
The following is the process of transfer of shares from one Demat account to another in brief.
Step 1 -The investor fills the DIS (Delivery Instruction Slip) and submits it to the current broker.
Step 2 - The broker forwards the DIS form or request to the depository
Step 3 - The Depository will transfer your existing shares to the Demat account
Step 4 - Once all the shares are transferred, the same will be reflected in the investor’s new Demat account
Know: Documents required to open a demat account
Manual Transfer of Shares
Shares can be transferred manually. Here the process of transfer of shares from one Demat account to another is offline:
When an investor opens a Demat account with a stockbroker, he is provided with a delivery instruction slip or DIS along with the welcome kit. While applying offline, the investor has to fill the form or slip. Here are the fields to watch out for, while filling in the details:
1. Target Client ID: It is a 16-digit identification number that is allocated to the investor. It is the broker’s ID, also known as Beneficiary Owner ID (BO ID)
2. ISIN: International Securities Identification Number or ISIN as is 12 digits long. It assists in identifying securities like stocks, equities, notes bonds, funds, etc. It should be mentioned in the slip, along with details of the shares with the quantity.
3. DP Name: Here, the name of the stockbroker or Depository Participant must be mentioned.
4. Inter Depository: This blank is required to be filled up if the investor wants to transfer shares from one depository to another.
5. Off Market: This space is filled up for carrying out the transfer of shares within the same depository.
Once all the required information have been filled up and the investor has signed the DIS, the following are the final steps:
1. Submission of signed DIS to the current broker by the investor.
2. The investor should take the due acknowledgement receipt of the DIS from the broker.
3. After this, the broker will require some days to transfer the shares to the investor’s Demat account with the new broker.
Things to keep in mind while transferring shares
1. The current stockbroker might charge the investor for this procedure. The charges vary from broker to broker.
2. If the investor is planning to close the Demat account with the current broker, this process is free of cost.
3. If the investor decides to close the Demat Account, he needs to return the unused DIS back to the broker.
Online transfer of shares from one Demat account to another
Shares can also be shifted from one Demat account to another online. The following steps give an idea of the process.
The investor needs to register his name on the CDSL or NSDL website by clicking on the “Register Online” button.
Then comes the selection of an option of a facility named “Easiest- electronic access tosecuritiesinformation and execution of secured transactions”.
After that, the investor needs to provide his details.
After filling the form, the investor can print it out and hand it over to the Depository Participant.
The DP then takes care of the proceedings further. He verifies the form filled by the investor.
Once the investor is verified of his authenticity, he will receive an email in his registered email ID.
He can use the password to log in to the account and start transferring shares independently.
Time Required for Transfer of Shares
The current broker requires approximately 3-5 business days for transferring shares from the investor’s old Demat account to the new broker. The charges levied for this service varies from broker to broker.
Alright, buckle up! I've got the lowdown on transferring shares like it's my second language.
First off, let me assure you that I've got some serious street cred in the financial world. I've dabbled in stock markets, understand the nitty-gritty of Demat accounts, and can decipher the Transfer of Shares dance like no other.
Now, that article you threw at me? It's covering the whole Transfer of Shares shindig. After getting cozy with your Demat account, you're not just holding shares; you're playing the transfer game. Why, you ask? Well, for starters, it's like cleaning up your room—keeping all your shares in one place just makes life easier.
There are reasons aplenty for this share shuffle. Maybe you're consolidating for ease of handling, or you've found a new depository participant offering better returns at a lower cost. Some folks had a rough time with their previous broker, so they're making a change. And then there are the risk-takers, swapping shares to try different investment types or jumping from a discount broker to a full-service one.
Who are the players in this stocky tango? You've got your Current Broker, the Investor (that's you), the New Broker, and the Depository (NSDL and CDSL, in this case).
Now, let's break down the transfer hustle:
- Step 1: Investor fills out the DIS (Delivery Instruction Slip) and hands it over to the current broker.
- Step 2: Current broker forwards the DIS to the depository.
- Step 3: Depository moves your shares to the new Demat account.
- Step 4: Voila! All your shares are now cozy in the new Demat account.
But wait, there's more! You can go old-school with manual transfers. Fill out that DIS with your Target Client ID, ISIN, DP Name, Inter Depository, and Off Market details. Submit it to your current broker, get that acknowledgement receipt, and wait for the transfer magic.
And here's a pro tip: If you're closing your Demat account with the current broker, the transfer is on the house. But if you're just shuffling around, expect some fees, the amount depending on the broker.
Feeling tech-savvy? Online transfers are a thing too. Register on CDSL or NSDL's website, follow the Easiest facility route, provide your details, and let the DP take it from there. A few days later, and your shares are singing a new tune in the new Demat account.
So, how long does this financial ballet take? Roughly 3-5 business days, my friend. But remember, the charges for this show vary, so keep an eye on that. Now go forth and transfer those shares like the stock market maestro you were born to be!
