How to change my Stock Broker and Transfer My Stocks from One Broker To Another?

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In this day and age there are multiple stock brokers in the Indian capital market. Therefore, it is essential to learn how to transfer stocks from one broker to another. Any investor may want to change his stock broker and transfer his stocks. 

There could be several reasons for doing so. For example, a new broking firm is offering lower brokerage than existing players. Or, a new broker has a much better online trading platform than other brokers in the market. 

Regardless of the reason, all investors and traders should know how to transfer stocks from one brokerage to another. This process depends upon the situation, which could be one of the below:

a) You want to transfer your securities from one demat account to another.

b)   You want to transfer your trading account; however, you have open positions.

c)  You have credits in your trading account, and you want to close it.

Let us explain the process for each of these situations one by one.

You want to transfer your securities from one demat account to another

This is a really simple transfer when all the shares you have purchased have already been credited to your demat account. It is even simpler if your current depository participant (DP) and new DP are both under the same depository (either CDSL or NSDL). If this is the case, you can first register and then transfer your shares to the new DP from the current DP online.

The process is slightly but not extremely complex if the DP you are currently with and your new DP are with different depositories. Suppose one is with NSDL and the other is with CDSL, or vice versa, then it is somewhat complex.

In that case, the first thing you should do is submit a debit instruction slip (DIS) to your current DP so that your securities can be transferred to your new DP. After the securities are transferred, you will have to apply to get your current demat account closed.

Additional Read: rokerage Calculator Comparison: Finding the Right Stock Broker for Your Needs

You want to transfer your trading account; however, you have open positions

In case you have open positions in shares of a company, then it is not a major problem to transfer such positions from one broker to another. However, if you have open positions in futures and options, then it can be quite difficult to transfer such positions.

If you have open positions in futures and options in your trading account, then you cannot transfer them from one broker to another. In such a case, you are required to first close such positions to zero and then your trading account can get closed.

Further, it is possible that your trading account has a debit balance or a credit balance. If you have a debit balance, your broker will not close your account unless you make good the debit to him. Once that is done, he can close your trading account.

That being said, you should not leave an unused trading account that is active with your broker because it can be misused. The best thing to do is request your broker to give you an acknowledgment of your credits or debits along with a ledger statement’s copy. And, when you are applying to get your trading account closed, you should  get a stamped acknowledgment of it from your broker.

You have credits in your trading account, and you want to close it

This is the trickiest situation when it comes to moving from one stock broker to another. Suppose you have bought shares of a company but you are yet to get them credited to your demat account. Or, you have sold the shares of a company but you are yet to get the proceeds of the sales in your bank account.

It could also happen that the profit you have made on selling those shares has not been credited to your bank account. In such a case, you should check with your current broker and ask him whether there are some debits in your account. If that is the case, you should allow him to adjust the debits against the money, which is supposed to get credited to your account.

Then, you should tell the broker to transfer whatever stocks you have in your current demat account to your new demat account. And in case you have a credit balance, tell him to transfer that to your bank account. After these things are done, you should close your account.

In the worst case, your current broker may not follow your instructions. What to do, then? In such a case, you should take the matter to the depositories (NSDL/CSDL) for delays in deliveries. For delays in payouts, you should escalate it to the stock exchanges (NSE/BSE).

Additional Read: What is sub broker

Conclusion

Whether you are opening a demat account for the first time or are a seasoned trader, you should know how to transfer stocks from one brokerage to another. When it comes to changing your broker and transferring your securities, you should always follow the process completely. Ideally speaking, you should not face too many hassles in this process. However, in case you face hassles and want to escalate the matter to the regulators, then it is important that you follow the process.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here https//bit.ly/3Tcsfuc

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