Off-Market Transfer refers to the transfer of securities directly between two Demat accounts without using the stock exchange platform. Unlike regular market transactions, where trades are executed through brokers at market prices, off-market transfers occur privately and are typically initiated for non-trading purposes such as gifting shares, transferring holdings to family members, or reorganizing an individualís investment portfolio.

In an off-market transaction, both the transferor (seller or donor) and transferee (buyer or recipient) must hold Demat accounts with a Depository Participant (DP) registered under either NSDL or CDSL. The transferor is required to fill a Delivery Instruction Slip (DIS), specifying the ISIN (International Securities Identification Number), quantity of shares, and transfereeís Demat account details. Once submitted to the DP, the ownership of securities is electronically transferred to the recipientís account after verification.

These transfers are governed by SEBI and depository regulations to ensure transparency and prevent misuse such as benami transactions or off-record settlements. While no brokerage is charged, stamp duty may be applicable depending on the nature and value of the transaction. Investors are also advised to maintain proper documentation, including signed transfer instructions, acknowledgment receipts, and communication records for audit and tax compliance.

Common use cases for off-market transfers include inter-family share transfers, consolidation of multiple Demat accounts, transmission of shares due to inheritance, and movement of securities between self-owned accounts for restructuring. However, these transfers should not be used for speculative trading or unreported settlements, as they may attract regulatory scrutiny.

Understanding off-market transfers helps investors manage their holdings efficiently, ensuring compliance with SEBIís disclosure and transparency norms while enabling legitimate and convenient reallocation of assets within the Demat system.