Understanding the Brokerage account transfer process

The stock exchange offers a convenient method to transact with demat accounts. You can purchase or sell shares and invest in other financial tools with a click. Stockbrokers, who act as intermediaries between the stock exchanges NSE or BSE, enable trading with demat accounts. Different brokers offer different online trading platforms that have their own interfaces and features. This allows traders to analyze and study the markets before they trade. Brokers charge fees for their service. The fees vary for different brokers. It is common for users to transfer share between brokers because they feel the services offered by another broker are better or that the fees being levied are less expensive. The process of transferring brokerage accounts in India is more complicated than in other countries. Continue reading to learn more about how to transfer shares among brokers.

Transferring Shares from One Broker to Another

Understanding the architecture of the financial system, which allows for dematerialized transactions, will help you better understand how brokerage accounts are transferred. Register your broker or participant in the depository with a central depositories - the NSDL and the CSDL. The depository is where all stocks are kept in dematerialized form. Depository participants, or DPs, are intermediaries that depositories use to manage large stocks. Often, the DP and your broker are the same. Each DP and broker are registered with one of two central depositories NSDL/CSDL. The process of transferring brokerage accounts is much easier when two brokers are registered with the same depositories than when they are registered with different ones. We will now examine the different scenarios you might encounter when you transfer shares between brokers and how they can be complicated.

1 . Transfer between the Same Depository, and No Credits Due

This is a simple case. If you have any outstanding credit or debits on your brokerage account, and you want to transfer it to another broker from the same central deposit, you can do this yourself. There are no additional permissions.

2. Transfer between Different Depositories

If you're transferring shares to a broker with a different broker than your current broker, you will need to send a Debit Instruction Slip to your broker to allow them to transfer the shares. This can take up two business days. After this is completed, you can close your demat account and open a new trading account. Your old broker should provide a stamped acknowledgment that your demat account has been closed.

3. Transferring account with open positions in the Market

This is a common situation as it's not always possible for one to simultaneously transfer their brokerage account and exit open market positions. Equities are relatively straightforward and easy to handle. All open positions are transferred into your new account. This may not be possible for Futures or Options (F&O), positions. It is recommended that you close all F&O positions prior to transferring your account. If you have any outstanding debits or credit in your account, they must be cleared first. Credits are the amount due to the broker. Debits refer to any charges that you have to pay the broker. To avoid future problems, make sure to get acknowledgment from the broker of cleared debits/credits.

4. Using Credits

This is the most complicated scenario in the brokerage account transfer procedure. Credit can refer to anything you owe. This could be shares you have bought but not yet credited to your demat bank account. It could also mean that certain shares have been sold and not yet been credited into your demat account. Each case means that you owe the broker something during the brokerage transfer process. These have been withheld by the broker. You can use a three-step approach to deal with this situation.

1. You should check to see if any outstanding debts have been incurred by your broker. These dues may have caused your broker to hold back your credit. Your broker can deduct these dues from credit if this is the case.

2. If the above steps fail to resolve the issue, you can immediately write to your broker for credit to any amounts or equities that you owe. Most brokers will transfer your credit within one week. After this, you can close your demat account.

3. If your credit has not been processed by your broker, you may escalate the matter by writing to the depository (NSDL/CSDL), to which your broker is affiliated, and the relevant stock exchange. (NSE/BSE). As a last resort, you can file a complaint to the SEBI.


Follow the process and get the clearances required to transfer shares from one broker. Transferring shares from one broker to another is easy if there are no credit due. The transfer of brokerage accounts can be complicated if you have owed credit to the broker. This could be in the form credits to your bank account for shares you sell or equities that are to be credited into your demat account. You can transfer shares easily between brokers if you follow the steps.

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