Transferring Shares from Demat account
Demat account is just like your bank locker. We store our important document and jewelry in the bank account. While our investment securities, like equity shares are stored in the demat account. As bank is for savings account, depositories is for demat account. Individuals would hold cash in hand if there were no bank accounts. Similarly, investors would have to keep their shares in physical format if there was no Demat.
Depositories (CDSL & NSDL) ease holding of securities in electronic form in dematerialized format. This reduces a lot of paper work and enables ease in transfer and trading of securities both for investors and companies. As we transfer our money from one account to another, shares can also be transferred easily.
For any reason, if you want to transfer from one Demat to other, you can fill up the Delivery Instruction Slip (DIS), and get your shares transferred. In case you want to close you old Demat account and transfer holding to the new one, you can do that easily by getting the Client Master list.
In India, we have two depositories. As mentioned earlier – NSDL (National Securities Depository Ltd.) and CDSL (Central Depository Service Ltd.). Your demat account will be either of these. If both the demat accounts are with same depository, you’ll be making an intra-depository transfer. If they belong to different depository, then it will be called an inter-depository transfer.
Opening a new Demat account and transferring your holdings
If you are opening a new Demat account, you will need to transfer shares from your old Demat account. This can be easily accomplished by getting Client Master List(CML). You DP should provide CML to you free of cost. It just shows you DP ID, personal details and holdings you have in your account.
Once you send this CML to your new DP, he will make sure that these holding are transferred to new DP account. It is a very simple process and there are no charges for transferring in shares in the new account.
Partial transfer from one Demat to your other Demat account
In case you want to transfer some of the holding from one DP to other, please follow the instructions below. The DIS slips are becoming uncommon as more and more people are moving towards online trading. I would advise you to keep you holding in one Demat account as it will make maintenance of the account easier.
The Delivery Instruction Slip is like a cheque. You need it transfer your shares to your other demat account or to another person. At first look it may seem too complicated. It’s easy to fill it. However, no errors should be there.
Details you have to provide for filling the DIS forms are as follows:
DP ID: Depository Participant’s ID. Your broker, through whom you opened the demat account is your DP. An investor can not directly go to the depository and open the demat account. The DP stands between you and the depository i.e. NSDL and CDSL.
Insert your current DP’s ID.
BO Client ID: BO means Beneficiary Owner i.e. you. The demat account holder is called the BO.
First/ sole holders name: the demat a/c holder’s name.
Now a days, in almost all DISs the above information comes printed. If not, it will be on the cover or first page of DIS booklet.
There are 2 date you need to fill. One is the date when you submit the DIS to the DP. This will be on the top right side of the DIS. Another one is the execution date. The date when you want the transfer to take place. These dates can be same or can vary. It is suggested to write the execution date after consulting your DP.
Now the table, where securities to be transferred is mentioned.
Every security is given an ISIN (International Security Identification Number). For Indian securities it starts with “IN”. So, IN may be printed on the DIS.
You can get this number from your transaction statement or contract note. Or just confirm with your broker. You cannot put a wrong ISIN. Each share, each Mutual fund, bond, every security in this world has an ISIN.
Then write the share name and the quantity you want to transfer. Here we are talking about transferring all the shares and other securities to a new account. So, write the total number of units you hold.
- You will be making an off-market transaction if the new demat a/c is with same depository.
- You will be making an on-market transaction if the new demat a/c is with another depository.
So put a tick mark accordingly. And below or further, again, the DP id –Counter BO ID, Counter DP ID this is about the new demat a/c. Here you have to fill up the details of where the securities should be transferred.
The relationship managers of your broker (DP) are for your assistance. Consult and fill the DIS properly.
Often, the stock broker and the DP are not the same. Hence, keep in mind that you have to deal with the DP, where you have your demat account. It is not necessarily that brokerage house is your DP. A third party can also be your DP. But if you have signed up with one, they’ll provide you all the facilities. In case, you have opened a demat a/c with one entity and have trading a/c with another, go to the Demat a/c entity.
For complete transfer of securities to a new demat account, no charges are imposed. And you can have many demat accounts.