How to transfer shares from Demat account?
Most of us know what is Demat account, advantages of Demat account and how you can get your demat account to start trading.
The number of brokers or brokerage firms in India has increased significantly in past few years; this also increased the complaints of misdoings. As a result, many people decide to get new demat account with another broker and thus want to know how they can transfer their shares from one Demat account to another. This article is all about it.
Can you transfer shares using demat account?
First question, first. Is it even possible to transfer shares fromone account to another, irrespective of the reason? The answer is, yes, you can transfer shares using demat account and reason can be anything.
What is the difference between inter and intra depository transfers?
To learn how to transfer shares using Demat account, first you must know how shares are maintained in Depository Systems.
In India, the organizations that are authorized to hold your shares are called Depositories. There are two of them:
- National Securities Depository Limited (NSDL)
- Central Depository Services Limited (CDSL)
A broker has to be attached to one of them and depending on that the mode of transfer is decided.
Intra Depository Transfers (Off market Transfers) – This is helpful when both your brokers – new and old are attached to the same Depository.
Inter Depository Transfers– If your new and old brokers are attached to different Depositories, this mode of transfer is used.
How to transfer your shares?
In order to transfer shares you have to fill the Delivery Instruction Slip (DIS) with your old demat account broker and provide the details of new DP ID (Depository Participant). DIS looks likea cheque bookinwhich your DP ID details are already available. You just have to give DP ID details of another account in which you want to transfer the shares.Once the process is done, the transfer can be done in a few days.
- Filling up DIS (Delivery Instruction Slip)
Say, you want to transfer your shares from ICICI direct account to ShareKhan account.
At the time of opening the account with ICICI you must have got a booklet called Delivery Instruction Slip (DIS). It looks like a cheque book. Most of the details arealready printed by your current broker, except Target DP (Sharekhan) and security details.
Fill up the relevant details and choose either Inter or Intra Depository transfer.
Important fields in DIS:
- Target Client ID: Your client ID of new broker (ShareKhan) (It is a 16 digit number).
- Target Settlement Details: N/A
- Settlement No: N/A
- ISIN: Shares of the every company have unique number (it is a 12 digit number starting with IN)
How to transfer shares from one Demat to another Demat account?
- Follow below given steps to transfer shares between two Demat accounts:
- Fill the DIS slip as described above
- Make sure all the fields are correct, especially the target client ID
- Submit the correctly filled DIS to your current broker
- Don’t forget to take the acknowledgement from the old broker
And that’s it.
- In how many days the shares will be transferred in my new account?
If you submit correctly filled DIS form to your old broker, normally it takes a day’s time (one business day) to be transferred to your target account.
- Does it cost something?
Yes! However, the price varies from broker to broker and in general, the charges are very minimal.
- How to transfer shares in case of account closure?
The purpose of exclusively mentioning this point is because in case of closure, the transfer of shares to your new Demat is free of cost. Your old broker is not supposed to charge you for this service. When closing the account, follow the same procedure mentioned above and apply for closing the account.
- Things to keep in mind when filling the DIS
The DIS is similar to the cheque book of your bank account. So, you must be really careful with it. Below are a few guidelines related to the DIS.
- Make sure that your client ID is stamped/printed on DIS leaflet and not handwritten.
- Make sure that the Target client ID number is correct.
- Don’t give the blank signed DIS leaflets to anyone; they can misuse it.
- Once the entry is made in the DIS, strike out the remaining rows to avoid misapplication.
- If DIS book is stolen/lost, inform your broker immediately to stop processing.
- At the time of closing the account, you have to return the unused DIS leaflets to the broker.
Is it possible to transfer shares from one person to another?
Yes! The process is same even when transferring shares using Demat accountfrom one person to another. You can transfer the shares to your spouse or any relative following the above mentioned procedure.
How to transfer physical certificates?
You can transfer shares by forwarding the below mentioned documents to Registrar and Share Transfer Agent (RSTA) of the company:
Correctlyfilled Share Transfer Formwith valid stamp
Copy of PAN card
In case of sale of securities in physical mode, they can be transferred to the buyer by affixing your signature transfer deeds.
How much time physical transfer takes?
Listed companies are required to send the objection memo or transfer shares within 15 days from the date of receiving transfer deeds, original certificates and all other required essential documents. In case of bonds, the company has to effect the transfer within two months from the date of lodgment for transfer deeds, original certificates and all other essential documents.
Hope you found this article about transferring the shares form one demat account to another helpful and now you will be able to successfully transfer shares.