Share transfer procedure governed by the depositories system

In case a company wants to transfer shares through a depository, it should convey the allotment details about all aspects to the concerned depositories. Once the intention of making the transfer has been effectively communicated, the seller is expected to provide the Depository Participant 1 with the necessary instructions. The concerned securities are also expected to be given to the first clearing member's pool account with the DP1. After the transfer of securities, the Clearing Member 1 forwards the delivery to the Clearing Corporation and the related instructions are given to the DP1so that the latter can debit his or her pool account while crediting the clearing member 1 automatic transfers to the Clearing Member 2. The process of security transfer also gets repeated in this case. After that, the Clearing Member 2 provides deliver instructions to DP2 for debiting the respective pool account and also for updating the credit buying client account with DP2. Ultimately, the buyer would give a parallel receipt instruction to DP 2 so that the concerned account securities can be accepted in the desired account. The entire process of share transfer under the depositories system has to be carried out with utmost caution so that there are no problems at a later stage.