Off-market trades validity?

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Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2012 Hello, Is Off-market trades of shares legal and valid?? If I purchase someone's shares in my code and then sell it to them(without any monetary gain) and receive cheque from them in my account...is this legal and valid?

also, what if I add some commission/monetary gain(as a charge) of using my code....then will this be legal and valid?

VIVEK SHARMA

VIVEK SHARMA (Expert)
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03 April 2012 Off market trades of shares is completely valid. When you buy shares in your account from stock market, it will be treated as one trade and you will have to pay STT on this.

When you transfer these shares in somebody's else account it will be treated as an off market transfer and will be subject to LTCG/STCG.

Only brokers and sub-brokers can buy shares on behalf of others to avoid the process mentioned above.

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Querist : Anonymous

Querist : Anonymous (Querist)

03 April 2012 Thanks, Still please rectify me if I m wrong....so you want to say...I purchase 100 ITC shares in a sub-broker code and (not in my code) let these shares remain with sub-broker in his DP........now is this valid? Can this be done with authorized person also? As well there is no case of LT ST as i'm not directly doing trades....doing using others codes(whether buy or sell)!!

VIVEK SHARMA

VIVEK SHARMA (Expert)
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03 April 2012 Please note that as a sub-broker,you can only place orders on behalf of your clients. The shares are received by broker after pay out and transferred into sub-broker's account. So any transfer from sub-brokers demat account will be off market transfer because it is not a pool account.

An authorised person can only buy shares as representative of broker. Any transfer from broker's account to the client's account and vice versa is not off market. Authorised person do not have these benefit.

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Querist : Anonymous

Querist : Anonymous (Querist)

05 April 2012 Now a days....no Sub-Broker can open client account with him...he has to open client account directly with Broker....He just have to look after trades and payments.....and not the DP.....