What Happens to Shares When the Owner Dies? Heir's Rights & CDS Transfer Process in Malaysia
Many investors in Bursa Malaysia hold shares in their CDS accounts - but have you ever wondered what happens to those shareholdings if the account owner passes away?
Shares in a CDS account are legally recognized estate assets under Malaysian law. They can be claimed and inherited by rightful heirs through a process called Transmission of Title (TOT) at Bursa Malaysia. Heirs have two options - either receive the shares into their own CDS account, or have the broker sell all holdings and receive the cash proceeds.
This process requires certain important documents and must be done at a broker's branch (such as M+, Maybank Investment Bank, RHB Investment Bank, and others). In this article, we explain step by step what heirs need to do.
What Is Transmission of Title (TOT)?
Transmission of Title, or TOT for short, is the official process under Bursa Malaysia Depository for transferring ownership of securities (shares, ETFs, warrants, etc.) from a deceased person's CDS account to their rightful heirs or personal representatives.
This process is governed by the Securities Industry (Central Depositories) Act 1991 (SICDA) - the same law that regulates CDS system operations in Malaysia.
It is important to understand that TOT is not just a single form. It is a comprehensive process involving document verification, fee payment, and approval from Bursa Malaysia Depository before any transfer can take place.
Who Can Claim a Deceased Person's Shares?
Not everyone can claim a deceased person's shares. According to Bursa Malaysia, only recognized Personal Representatives are authorized to deal with a deceased depositor's CDS account. There are two categories:
1. Executor or Administrator
These are individuals appointed by the court through:
- Grant of Probate (GOP) - if the deceased left a will
- Letter of Administration (LA) - if the deceased did not leave a will
Executors and Administrators have broader authority - they can transfer shares to any third party's CDS account, as long as the instruction is stated in Form A (Notification of Death of Depositor).
2. Beneficiary
These are individuals whose names are listed in:
- Distribution Order (Borang E) from the Small Estates Division (Bahagian Pesaka Kecil), Land Office
- Direction Letter (Surat Arahan) from Amanah Raya Berhad
Beneficiaries can only transfer shares to their own CDS account - not to a third party's account.
Important: Under the secrecy provisions of SICDA 1991, Bursa Malaysia cannot disclose any information about a deceased person's CDS account (such as share balances, account numbers, or any other details) to anyone who has not yet been legally appointed as a personal representative. This means you must obtain legal documentation first before you can find out what is in the deceased's CDS account.
Three Claim Pathways - Which One Is Right for You?
The pathway you need to take depends on the total value of the estate and legal status:
Pathway 1: Small Estate (Estate Value Below RM2 Million)
If the total value of the deceased's estate (including shares, property, savings, etc.) is RM2 million or less, you can apply through the Small Estates Division at the nearest Land Office.
- Document issued: Distribution Order (Borang E)
- Process: Easier and cheaper compared to court proceedings
- Estimated duration: 3-6 months
- You will need to provide a complete listing of all securities in the deceased's CDS account along with CDS statements as proof of ownership
This is the most commonly used pathway as the majority of retail investors have shareholdings valued at less than RM2 million.
Pathway 2: Large Estate (Estate Value Above RM2 Million)
If the estate value exceeds RM2 million, you need to go through the High Court to obtain:
- Grant of Probate (GOP) - if the deceased left a will
- Letter of Administration (LA) - if the deceased did not leave a will
This process requires a lawyer and can take 6-12 months or longer.
When applying for a GOP or LA, you do not need to list every share individually. Simply state "all securities maintained with Bursa Malaysia" in the application - this will cover all holdings across all of the deceased's CDS accounts.
Pathway 3: Through Amanah Raya Berhad
If you are unsure which pathway is appropriate, or if the deceased had appointed Amanah Raya as estate administrator, you can deal directly with Amanah Raya Berhad. They will issue a Direction Letter (Surat Arahan) that can be used for the TOT process.
Amanah Raya charges service fees based on a percentage of the estate value.
Documents to Bring to the Broker's Branch
Once you have obtained the relevant legal documents, you need to attend in person at a broker's branch (e.g., Malacca Securities/M+, Maybank IB, RHB IB, or any Authorized Depository Agent/ADA) with the following:
- Death Certificate of the deceased - original or certified true copy by a Notary Public or Advocate & Solicitor
- Legal documentation (original or certified true copy) - one of the following:
- Grant of Probate (GOP), OR
- Letter of Administration (LA), OR
- Distribution Order (Borang E), OR
- Direction Letter from Amanah Raya Berhad
- Identity Card (IC) or Passport - your original
- Form A (Notification of Death of Depositor) - this form will be provided by the broker when you attend
All document copies must be certified by a Notary Public, Advocate & Solicitor, or an authorized officer of the brokerage firm.
Important Notes
- You are not restricted to the deceased's broker only. You can submit a TOT application at any brokerage firm/ADA in Malaysia
- If you cannot attend in person, you may write to the broker to request a waiver of attendance
- If you reside outside Malaysia, the broker will guide you on alternative procedures
- If the GOP or LA was obtained from a Commonwealth jurisdiction outside Malaysia, it must be resealed at the High Court of Malaysia first
Step-by-Step Process at the Broker's Branch
Here is the actual process flow when heirs attend a broker's branch:
Step 1: Attend the Broker's Branch
Bring all required documents and attend in person. Inform the officer that you wish to make a Transmission of Title (TOT) application for a deceased person's CDS account.
Step 2: Document Verification
The broker's officer will review and verify all your documents. You will be asked to complete and sign Form A (Notification of Death of Depositor) before an authorized officer.
Step 3: Pay Fees
Two types of fees are payable via online banking:
- RM50.00 - processing fee (once per application)
- RM10.00 - transfer fee (per security/stock counter)
Example: If the deceased held 5 stock counters, total fees = RM50 + (5 x RM10) = RM100
Step 4: Processing by Bursa Malaysia
Once all documents are complete and fees are paid, the broker will submit the application to Bursa Malaysia Depository for approval. This process typically takes 5-14 working days.
Step 5: Transfer or Sale
Once approval is received, the heir chooses whether to receive the shares or liquidate them (see next section).
Heir's Options: Transfer Shares or Cash Out?
Once the TOT process is approved, heirs have two options:
Option 1: Receive the Shares (Transfer to Own CDS)
If the heir wishes to keep the shares as investments:
- The heir must have their own CDS account first
- If they don't have one yet, they need to open a CDS account at any broker
- The broker will transfer all shares from the deceased's CDS account to the heir's CDS account
- Once transferred, the heir can continue to hold, sell, or manage the shares as normal
This option is suitable if the heir understands stock investing and wishes to maintain the deceased's portfolio as a long-term asset.
Option 2: Cash Out Everything (Sell and Withdraw)
If the heir wants cash only:
- Shares cannot be sold directly from the deceased's CDS account - they MUST be transferred to the heir's CDS account first
- Once transferred, the heir can instruct the dealer/remisier to sell all holdings
- Sale proceeds will be credited to the heir's trading account
- The heir can then withdraw the funds to their own bank account
Note: Share prices fluctuate daily. The value of holdings at the time of sale may differ from their value when the TOT application was made.
What If the Shares Have Been Delisted?
If any shares in the deceased's CDS account have been delisted from Bursa Malaysia, those shares cannot be sold as they are no longer traded. Delisted shares can only be withdrawn from the CDS account. For procedures on withdrawing delisted shares, contact the CDS Department at the relevant broker.
Overall Fees and Costs
Here is an estimate of the costs involved in the entire process of claiming deceased person's shares:
| Item | Estimated Cost |
|---|---|
| TOT processing fee (Bursa Malaysia) | RM50 per application |
| Securities transfer fee | RM10 per stock counter |
| Death certificate (certified copy) | RM5 - RM20 |
| Grant of Probate / Letter of Administration | RM500 - RM5,000+ (lawyer fees) |
| Distribution Order / Borang E (Land Office) | Free - RM50 |
| Amanah Raya (if used) | 1% - 5% of estate value |
| Brokerage commission (if selling) | 0.1% - 0.7% of sale value |
The largest cost is typically the lawyer's fees for obtaining a GOP or LA at the High Court. For small estates below RM2 million, the Borang E route through the Land Office is significantly more affordable.
How Long Does the Entire Process Take?
The overall duration depends on the pathway chosen:
| Phase | Estimated Duration |
|---|---|
| Obtaining GOP / LA (High Court) | 6 - 12 months |
| Obtaining Borang E (Land Office) | 3 - 6 months |
| Amanah Raya Direction Letter | 2 - 6 months |
| TOT process at broker (after documents are complete) | 5 - 14 working days |
| Share sale and fund withdrawal | 3 - 5 working days |
The entire process from start to finish can take 3 months to over a year, depending on the complexity of the estate and the pathway chosen.
What Happens to Dividends During the Claim Process?
A question many heirs wonder about - what happens to dividends, bonus shares, or rights issues announced while the TOT process is ongoing?
- Cash dividends: Dividends will continue to be credited to the deceased's CDS account. Once the TOT process is completed and shares are transferred, accumulated dividend balances will also be managed
- Bonus shares and rights issues: These corporate actions will be recorded in the deceased's CDS account. Heirs will receive these additional units together with the main share transfer
- The deceased's CDS account will not be closed automatically - it remains active until the TOT process is fully completed
This is why it is important to start the claim process as soon as possible - the longer you wait, the more complex the dividend and corporate action calculations become.
Preparation Tips for Investors (Before It Happens)
As an investor, you can make things easier for your family with some simple preparations:
- Inform your family about your CDS account - tell your spouse or children that you have a CDS account and which broker holds it
- Keep CDS statements in an accessible location - heirs will need a listing of holdings for the claim process
- Write a will - appointing an executor in a will significantly speeds up the process compared to applying for a Letter of Administration in court
- Consider hibah (Islamic gift) - for Muslims, gifting shares during your lifetime (hibah) can bypass the TOT process entirely
- Keep broker and remisier records - your broker's name, CDS account number, and remisier contact details will greatly help your heirs
Frequently Asked Questions (FAQ)
Can family members suspend (freeze) the deceased's CDS account?
Yes. An Executor, Administrator, or beneficiary can apply to suspend the deceased's CDS account by submitting a Suspension Request Form, a certified death certificate copy, the applicant's IC copy, and legal documentation (GOP/LA/Borang E/Direction Letter) to any broker. Suspension prevents any unauthorized transactions on the account.
Do heirs need to go to the deceased's broker specifically?
No. You can submit a TOT application at any brokerage firm or Authorized Depository Agent (ADA) in Malaysia. You are not restricted to the broker used by the deceased.
What if the deceased had CDS accounts at multiple brokers?
The deceased may have CDS accounts at more than one broker. You will need to check with each broker separately. However, one set of legal documents (GOP/LA/Borang E) can be used for all brokers - you do not need to apply for new documents for each broker.
How long does the TOT process take at the broker after documents are complete?
Once all documents are complete and fees are paid, the TOT process at Bursa Malaysia Depository typically takes 5-14 working days. However, obtaining the legal documentation (GOP/LA/Borang E) can take 3-12 months.
Do heirs need to pay tax on inherited shares?
Malaysia does not impose estate tax at this time. Share transfers through TOT are also not subject to income tax or capital gains tax. If heirs subsequently sell the inherited shares, gains from selling listed shares on Bursa Malaysia remain exempt from capital gains tax as of 2026. For more information, read our article on estate tax in Malaysia.
What happens if no one claims the deceased's shares?
If shares remain unclaimed for an extended period, they may be transferred to the Minister of Finance's securities account under the provisions of SICDA 1991. The Securities Commission Malaysia provides guidance for recovering shares that have been transferred this way.
Can heirs sell shares directly from the deceased's CDS account?
No. Shares in a deceased person's CDS account cannot be sold directly. They must first be transferred to the heir's CDS account through the TOT process before they can be sold.
What is the difference between Direct CDS and Nominee accounts in the context of TOT?
In a Direct CDS account, shares are registered in the investor's own name and the standard TOT process applies. In a Nominee account, shares are registered in the broker's name. For Nominee accounts, heirs need to deal directly with the broker for the transfer process - procedures may differ slightly but the legal documents required are the same.
Conclusion
Shares in a CDS account are legitimate estate assets that can be inherited. The Transmission of Title (TOT) process may seem complex at first glance, but with the right documents and your broker's assistance, it can be completed smoothly. Most importantly, start the process as soon as possible and ensure you obtain the legal documentation (GOP, LA, or Borang E) before visiting the broker.
If you or your family members are planning to invest in shares, make sure your family knows about your holdings and how to manage them should the unexpected occur.
To start investing in Bursa Malaysia as well as international stocks such as US and Hong Kong markets, you can open a CDS Trading Account through M+ here.
Also download our free Stock Market Basics Ebook to understand the fundamentals of stock investing from A to Z.