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Off-Market Transfers
WHAT IS AN OFF-MARKET TRANSFER?
An off-market transfer is a method for privately transferring shares between two shareholders without using the services of a share broking firm. Essentially, an off-market transfer is a change of ownership as the shares are not being publicly traded on the share market.
PURPOSE
An off-market transfer may be conducted for a variety of reasons, but is usually a method for two individuals (commonly family members) to privately transfer or “gift” shares between one another.
Being able to exchange ownership of shares by conducting an off-market transfer may be preferred by some shareholders as it involves minimal paperwork and avoids the brokerage fees that would be charged by a share broking firm.
Below are some of the common off-market transfer scenarios, where shares may be transferred between...
- husband and wife
- parent and child
- siblings
- grandparent and grandchild
- friends/acquaintances
- individual and company/family trust
- the Estate of a deceased family member and a surviving family member
METHOD
As discussed above, an off-market transfer is not conducted on the public share market – it is conducted privately between two shareholders. This removes the involvement of a share broking firm who would otherwise act as an intermediary between the shareholder and the public market.
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When an agreement has been made to conduct a transfer between two shareholders, both must complete and sign the relevant section of an “Off-Market Transfer Form” and send the form to the applicable share registry. |
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The transfer of shares is conducted by the applicable share registry who remove the allocated quantity of shares from the shareholder number of the “seller” and add the allocated quantity of shares to the shareholder number of the “buyer”. |
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The “selling” and “buying” shareholders both receive written notification from the share registry that the transfer has taken place and that the shares are now registered in the name of the “buying” shareholder. |
COST
Shareholders with New Zealand (NZX) shares do not currently have to pay an administration
fee to conduct an off-market transfer.
Shareholders with Australian (ASX) shares that are held on a Security
Reference Number (SRN) need to meet identification requirements and pay an
administration fee to the relevant Australian share registry. Read more on the
Computershare Australia website.
Shareholders with Australian (ASX) shares that are held under CHESS sponsorship
with E*Trade Australia, via Direct Broking, do not pay an off-market transfer
administration fee.
OFF-MARKET TRANSFER FORM
An off-market transfer form can be obtained from the applicable share registry or downloaded from the Direct Broking website.
An important note for Australian CHESS clients and US/UK Custodial clients: Please contact Direct Broking on 0800 805 777 if you wish to arrange for a transfer of shares.
Please feel free to contact Direct Broking if you would like assistance with an off-market transfer form or other trading matters.
> 0800 805 777
> help@directbroking.co.nz
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