Demat Account: All you need to know about off-market transfer and how it functions

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demat account additions, mutual fund inflows, and a significant increase in their stakes in various stocks. As we all know, a demat account is essential for anyone venturing into the stock market (directly) for investing or trading. Similar to having multiple bank accounts, retail investors often open and operate multiple demat accounts.

This approach provides them with the advantage of exploring different services offered by various brokers and gaining access to diverse reports and trading calls. The buying and selling activity is facilitated by the exchanges and clearing corporations. When a retail investor buys and sells a stock, it typically goes through exchanges and the clearing corporation, both of which serve as intermediaries between buyers and sellers, ensuring smooth transaction flow.

Also Read: Can you link multiple trading accounts to your demat account? Exchanges provide the platform for trading securities, while the clearing corporation acts as the central counterparty, guaranteeing the settlement of trades and managing the associated risks. In addition to market trades, investors have the option to settle trades without involving the clearing corporation and exchange, known as an ‘off-market trade.’ In today's digital age, nearly all transactions occur online. However, in the past, transactions were conducted offline, typically through a form known as a delivery instruction slip (DIS).

This form was necessary for transferring shares from one demat account to another. In this article, we will know more about these off-market trades. Also Read: Demat: How does share transfer work in case account holder passes away? Off-market trades are those transactions not settled through the clearing corporation or