Buying and Selling of Stocks

When you buy stocks, you are required to pay money to your broker or sub broker immediately upon getting the contract note/ confirmation memo for the purchase of stocks. The broker issues a contract note, whereas a sub broker issues a confirmation memo. Similarly, when you sell stocks you are required to give delivery of your stocks by transferring them to the demat account of your broker/ sub broker immediately upon getting the contract note or confirmation memo. When you buy stocks, then the stocks you have purchased will first come to the demat account of your broker/ sub broker. Once this happens, you can instruct your broker/ sub broker to transfer those stocks to your demat account. For receiving stocks in your demat account you will have to give your broker or sub broker the details regarding your demat account.

When you sell stocks you are required to give delivery of stocks from your demat account by instructing your DP to transfer the number of stocks that you have sold from your account to the demat account of your broker. In this regard, you will be required to include the details of the demat account of your broker in the instruction slip that you give to your DP. Your broker or sub broker will help you to fill in the delivery instructions. These instructions are of a technical nature and the delivery instruction forms and procedures differ from DP to DP.