Transfer of securities between demat accounts is a simple and essential process that allows investors to transfer their securities from one account to another. Whether it is a change of custodian, a merger of multiple demat accounts or a gift of shares to family members, it is important to understand how shares are transferred. In this article, we will discuss the process of transferring shares between demat accounts step by step.
Understanding Demat Account Transfers
Demat account transfer is the transfer of securities from one demat account (called “source account”) to another (called “destination account”). Check more on demat account kya hai?
Step-by-step process
Initiate a transfer request: The process begins when the account holder (transferor) submits a transfer request. The account holder is required to fill the Demat Account Transfer Form, also known as Delivery Instruction Confirmation (DIS), which is provided by the Depository Participant (DP) of the originating account. Any best mutual fund app can help you.
Complete the transfer details: In the DIS, the account holder must provide information about the securities to be transferred, including security name, ISIN (International Securities Identification Number), quantity and other necessary information.
Sign and send the DIS: The account holder must sign the DIS and submit it to the DP of the source account. The data provider checks the information and processes the transfer request accordingly. Check more on demat account kya hai?
Review and approval: DP of the originating account verifies the transfer details and obtains transfer approval from the account holder. This authorization can be done using a physical signature, a digital signature, or a secure authentication method in accordance with the data provider’s policies. Any best mutual fund app can help you.
Submission of a transfer request: After approval, the DP of the originating account submits the transfer request to the central management system “CDSL or NSDL”. for further processing. Check more on demat account kya hai?
Centralized administrative procedures: The central depository processes the request and ensures that the shares in the originating account are available for transfer.
Transfer to the target account: After review and approval, the shares are debited from the source account and credited to the destination account. Check more on demat account kya hai?
Confirmation of transfer
The source and destination DPs send a confirmation of the transfer of shares to the respective account holders. Important information Fees apply: Fees may apply for the transfer of shares. Please check with the relevant DP partners for applicable transfer fees. Check more on demat account kya hai?
Over-the-counter transfer: Shares can be transferred either on-exchange (via an exchange) or over-the-counter (directly between accounts). The process described above applies primarily to over-the-counter transfers. Any best mutual fund app can help you.
Tax consequences: The transfer of shares can have tax consequences. It is always a good idea to consult a tax professional. Any best mutual fund app can help you.
Time: The time required for the transfer process may vary depending on factors such as the custodian, the data providers involved and any additional verification requirements. Check more on demat account kya hai?
