Upvest offers an API solution to facilitate the transfer of securities across custodians. This guide explains the processes, highlights the related benefits, and details the required API requests and responses for all security transfers.
In general, Upvest provide two types of securities transfers:
- Incoming security transfers: when moving securities into your account.
- Outgoing security transfers: when moving securities to an external custodian.
A transfer of securities is the process of moving securities from one custodian to another, generally for the same beneficial owner.
Change of ownership transfers (e.g., gifts, inheritance, charitable donations) are not supported at this time.
Our API solution supports the transfer of a position within a single ISIN. Transfers can also be initiated for an entire account or portfolio, and involves the transfer of multiple individual instrument positions. For this purpose, Upvest offers a separate Account Transfers API, which is covered in a dedicated user guide, depending on the client setup.
Only full units of securities can be transferred. Fractional shares are not supported due to technical limitations within the SWIFT network messaging system.
In Germany, specific regulations govern securities transfers:
- Timeline for Outgoing Transfers: There is a legal obligation to facilitate outgoing securities transfers to any other German investment services company within three (3) weeks of receiving notification from the end user.
- Tax Data Transmission: A critical part of any transfer is the obligation to transmit the securities' acquisition data and associated tax information to the receiving institution, as long as it is a German institute. This data, mostly sent via Taxbox, is essential for the new custodian to correctly calculate any future tax liabilities.
A securities transfer is a multi-stage process involving initiation, counterparty notification, the physical movement of assets, and the subsequent transfer of tax data.
There are multiple methods to initiate a incoming or outgoing securities transfer. This includes submitting an API request, automatically with allegements for incoming transfers, or manually via our Operations team.
Upvest provides the incoming transfers API as a convenience API. In general, market practice expects the counterbroker to initiate the (outgoing) transfer on their side and Upvest to be notified.
The stages of a securities transfer include:
Pre-Market Stage: Initiation
- Incoming Transfer: An end-user informs clients of their intent to transfer securities to their account. Clients verify that the ISIN is included in the enabled ISIN list and that the account is active. The client then sends the transfer request via API to Upvest.
- Outgoing Transfer: An end-user requests to transfer securities away from their account to an external custodian. The client validates the information and the signature in the form, and then sends the transfer request via API to Upvest.
Sender/Receiver Notification and Instruction
Once the transfer is initiated, the other custodian must be formally notified.
Incoming Transfer: The end-user / client notifies the counterparty that holds the securities of the instruction to transfer the assets to Upvest.
Outgoing Transfer: Upvest notifies the counterparty of the upcoming transfer and clarifies the delivery details including:
- the Standard Settlement Instructions (SSIs)
- the ISINs to be transferred
- the final beneficiary
Market Stage: Settlement
In this stage, the securities are physically moved. This process is generally the same for both incoming and outgoing transfers.
Once the instructions are validated (“matched”) by both custodians, the assets are transferred. This is executed as a free-of-payment (FoP) transfer, which settles through a Central Securities Depository (CSD) such as Clearstream.
Post-Market Stage: Tax Data Transfer
After the securities have been moved, the legally required tax information must follow. This applies only when both counterparties are within Germany.
- Incoming Transfer: The sending custodian fulfils its obligation by providing the historical tax data for the securities. This includes the first-in-first-out (FIFO) ledger and, where applicable, loss pot information. We then receive and process this data.
- Outgoing Transfer: Upvest fulfils our obligation by packaging and transmitting the relevant historical tax data for the transferred securities to the receiving custodian.
This data transfer is commonly facilitated by a specialised service called Taxbox.
This stage is relevant for Take-Our-License (TOL) / Bring-Your-Own-Licence (BYOL) Single Account setups with CPB integration.