What If Your DP Has Not Transferred Shares To Your Demat Account On T+2?

With the digitization of the trading process, people generally assume that the moment they click the button, shares and securities will be transferred to their Demat account. In reality, this is not the case. The settlement cycle for the transfer of purchased securities by the Depository Participant (DP) to the account of the buyer is T+2 days in the Indian stock market. The time here is the trading days, and any trading holiday is excluded from the equation. 

For example, you buy 100 shares of a company on Friday. The shares should get transferred to your Demat account by day end of Tuesday, or maximum by Wednesday morning since Saturday and Sunday are trading holidays. However, there are a few cases where the securities may not be transferred to your Demat account as per the T+2 timeline. Let’s discuss what these situations are, and what you should do in such cases. 

• If there are pending dues with the DP/ stockbroker

If you have opened the best Demat account in India with a reputed stockbroker, and have a long relationship with them, it is highly unlikely that the broker will stop the transfer of shares to your account for small dues. However, if you have dues in your trading account due to unpaid margins, or have unfunded MTM losses in it, the stockbroker may stop the transfer of shares to your Demat account. In other cases, your online mandate may have bounced or you may not have paid your annual maintenance charges on your Demat account. You DP may hold back the crediting of shares to your Demat account in all these cases. 

Solution: It is advisable to get in touch with your DP, and if there are no disputes on the charges, you can pay the dues, and the DP will transfer the shares to your account. 

• If there is a delivery shortfall of the shares bought

There may be a situation where you may purchase a particular number of shares of a company, but that number of shares may not be available for sale in the market in the said time frame. In the case of highly liquid shares, the possibility of this shortfall is very low, but it often happens in the case of illiquid small-cap and mid-cap shares. 

Solution: When such a shortfall arises, the stock in demand goes on auction. Depending on the result of the auction, either the shares will get credited to your Demat account within 5-6 days, or you will get the amount of the credit, including the profit from the auction. Your stockbroker will inform you of these proceedings through SMS and email, but to be safe, if you do not get the delivery of shares in the T+2 time, contact the broker immediately. 

• If you frequently indulge in BTST/ STBT trades

It is a regular practice for intraday traders to use the BTST (Buy Today, Sell Tomorrow) facility provided by the stockbroker.  Intraday trading meaning buying and selling stocks on the same trading day. Under the BTST facility, your stockbroker allows you to sell the stock on T+1 days, even though you will get the delivery of the stock on T+2 days. In such a case, where you have already sold the stock on T+1 day, before actually receiving it on the T+2 day, you will not receive any shares in your Demat account. It may also happen that you sell a particular stock on the T+1 model and that stock goes into auction. Your DP may put the delivery of other stocks to your Demat account on hold in this case. 

Solution: Once the auction is over, the DP will credit your purchased stocks to your account. 

You can keep a close watch on the daily ledger to address these issues promptly. If you do not receive the stocks in your account on T+2 days, it is advisable to get in touch with your DP without any delay to avoid further delay or possible fraud. You can visit the website of leading stockbrokers to know more about how to open Demat and Trading accounts and how to smoothly conduct buying and selling of stocks.