How can I transfer shares from one broker to another? 

Want to switch brokers to get better pricing and services? Whether you want lower costs, enhanced features or a smoother trading experience, switching to a different broker to align with your changing needs is the right step.

Transferring your shares to a top share broker may seem overwhelming, but the process is straightforward and available both online and offline to suit your preferences.

With modern digital systems in place, you can switch to a different broker fairly quickly, provided you understand the process and have the necessary documentation. 

What are the different types of share transfers based on depository participants? 

First, let us figure out the type of transfer you need to do. Moving your investments from one trading account to another depends on the depository that your current stock broker and your new stock broker are registered with.

In India, there are two depositories: the Central Depository Services Limited (CDSL) and the National Securities Depository Limited (NSDL). The speed and ease of your transfer process depend solely on whether your old and new brokers are registered with the same depository or different depositories.

• Intra-depository transfer: This is typically faster! An intra-depository transfer happens when you move shares between two brokers under the same depository, either CDSL or NSDL.
• Inter-depository transfer: An inter-depository transfer happens when you move shares between brokers under different depositories. As this process involves transferring securities between two systems, it can take longer.

What are the methods to transfer shares? 

When it comes to transferring your shares, you basically have two options, including - 

Online method 

Transferring shares online ensures speed and convenience while eliminating the need for extensive paperwork. You can complete the transfer using the digital portals offered by the depositories that hold your shares electronically. 

With CDSL, you get the Easiest facility (Electronic Access to Securities Information and Execution of Secured Transactions), and with NSDL, you get the Speed-e platform.

Once you know your broker’s depository, you can follow these steps to transfer your shares - 

• Register on the respective depository’s portal.
• Enter your Demat account details, including the 16-digit Demat Account Number (DP ID + BO ID), PAN, contact information and other required details.
• Once your registration is successful and your current broker approves it, your share transfer will be complete.

Charges - The primary cost is the mandatory Depository Participant (DP) charge. Brokers charge this fee for every ‘sell’ or ‘buy’ transaction from your Demat account, even when the transfer is a non-monetary move between your own accounts. For instance, for each transfer instruction, m.Stock charges ₹18 plus GST. 

If you are closing your old Demat account and transferring all holdings, many trading platforms waive this fee, making the process free. Always check your old broker's terms and conditions for the account-closure transfer fee, if any.

Duration - Transfers typically complete within 1-2 working days for intra-depository transfers and 3-5 working days for inter-depository transfers.

Offline method 

The traditional offline method requires the use of a physical document called the Delivery Instruction Slip (DIS), which your current broker provides. You must fill out the slip carefully, providing all important details, such as:

• Your name
• Name of the shares
• Corresponding International Securities Identification Number (ISIN) for each share
• Exact number of shares
• Type of transfer (Inter-depository or intra-depository)
• Reason for the transfer (e.g., account closure, transfer to own account)
• The complete 16-digit Demat account number of the broker receiving the shares.

Submit the signed DIS slip to your new broker, who will then verify the signature and details before forwarding the request to the respective depository.

Charges - Similar to the online method, you have to pay the DP debit charge of ₹18 plus 18% GST per share.

Duration - The offline method requires physical submission and verification of documents. Transfers typically take 3 to 6 working days, but the time may vary depending on the transfer's complexity.

What are the things to remember during a share transfer? 

Here are the must-do checks to ensure a smooth switch:

Required documents 

For the offline method, the Delivery Instruction Slip (DIS) is the only physical document you need. For the online method, you don’t need any physical documents. However, you must remember your Know Your Customer (KYC) details, such as name and address, and ensure they are identical across both the transferring and receiving Demat accounts.

Associated charges 

Always confirm the brokerage charges beforehand. Your current DP charges a fee for processing the transfer, often called the DP charge. For instance, this flat fee is ₹18 per share (plus GST) at m.Stock. Transferring shares between two accounts with the same DP often incurs no fee.

Correct transfer type 

Confirm that you select the Off-Market transfer type when filling out the DIS slip or the online form. Choosing On-Market is incorrect because it assumes you are selling the shares through an exchange.

No pending dues 

You must settle any outstanding ledger debits or dues you have with your existing stock brokerage before initiating the transfer. Your broker may pause your account closing process or transfer if you have pending debit balances or annual maintenance charges (AMC).

No locked or pledged shares 

If your shares are pledged for an MTF or locked due to corporate actions, you cannot transfer them to a new broker. You must first unpledge the securities or wait until the lock-in period ends before the DP can initiate the transfer process.

Conclusion 

Transferring your shares between brokers is a straightforward process once you understand which depository your broker is registered with and the method you want to use. Whether you choose the online route through CDSL Easiest or NSDL Speed-e or prefer the traditional offline method, both processes are very straightforward.

By providing accurate details, completing the required steps and ensuring all your shares are free to transfer, switching brokers becomes a convenient part of managing your investments in the online share market.

Also Read: https://www.mstock.com/articles/share-market