What is a share transfer and what kind of share transfers are available in the share market?
A share transfer is simply a movement of stocks between a broker and the Market - Central Depository System (CDS), between 1st degree relatives and between related party companies within the same group.
Share transfers are mainly of three fold, namely
- Stock Transfers
- Registry Transfers
- Family Transfers
What is a Stock Transfer?
It is a transfer of stocks from the market (CDS) to a brokerage firm. The client should submit a duly completed share transfer request form to the brokerage office for effecting the transfer. The stock transfer procedures vary in the two markets, Dubai Financial Market (DFM) and Abu Dhabi Securities Market (ADX). The stock transfer in DFM requires the client to submit an 'investor signature form' as well, along with share transfer request form.
What is a Registry Transfer?
Transfer of shares from the brokerage company to the market (CDS) is called a registry transfer. A fee of AED 10/- is payable to the market on each Registry Transfer request. Another form of Registry Transfer is available for DFM listed shares where DFM listed shares can be transferred from one broker to another broker direct. This will also involve a fee of AED 10/- per transfer. Similar to the stock transfer, the client should sign a duly completed registry transfer request form to affect a registry transfer. When submitting a broker-to-broker transfer form to DFM, it should be signed and stamped by both the transferor and the transferee, (two brokerage companies involved) and then forwarded to the market with the fees required for processing the application.
What is a Family transfer?
Family transfers are transfers of shares between related parties. In case of individuals, it can be done between 1st degree relatives namely, spouse, children, parents, brothers and sisters. In case of companies, transfers are possible between subsidiary and associate companies within the same group. A request for family transfer can be submitted to the market when the ownership of shares needs to be moved from one person to the other who are fallen within the category of 1st degree relatives and from one company to other which are within the same group.
The transfer form needs to be submitted signed by the parties involved, namely the transferor and transferee, along with documentary proof to establish the relationship and the fee payable. The market fee for family transfer is computed as per the formula below.
Transfer Fee = No. of shares x Closing market price of the share one day before the date the application is submitted x 0.2%
The documentary evidence could include copies of passports, a copy of the marriage certificate, family book, or any other additional supporting document.
General
All details in the share transfer application forms should be accurate & comprehensive and should be properly signed by the parties involved. In the event a Power of Attorney (POA) is involved, a valid POA copy should be forwarded along with the application. The attorney may sign on behalf of the customer in the manner provided for in the POA document.
Note: The above procedures are related to DFM and ADX markets, which may be subject to changes according to the respective market instructions.
