Indian investors holding US stocks on Fidelity often find that their account has been moved to "sell-only" mode after returning to India, as Fidelity restricts full trading access for non-US residents.
Once the account is restricted, Fidelity only allows you to close existing positions.
Many Indians wrongly assume that selling everything, paying capital gains tax, and starting over with another broker is the only way forward.
However, you can transfer your holdings to another broker without selling, avoiding tax liabilities and preserving your cost basis.
This guide explains how to move your Fidelity holdings to another broker in-kind, what assets can transfer, what cannot, and what the process looks like for an Indian investor.
Table of contents
- How can I move my Fidelity holdings without selling?
- Why this matters for Indian investors specifically
- How the transfer works
- What can and cannot transfer from Fidelity
- What does it cost?
- How long does it take?
- Will I owe Indian capital gains tax on the transfer?
- Transferring your Fidelity holdings to Paasa
- Common questions
- About Paasa
How can I move my Fidelity holdings without selling?
Fidelity supports outgoing transfers through ACATS (Automated Customer Account Transfer Service), the standardised US system for moving brokerage assets between firms. Your shares move from Fidelity to the new broker as-is, without being sold, with your purchase price and holding period intact.
Selling everything to switch is not necessary. Selling triggers a capital gains event in India on every appreciated position and resets your holding period. An in-kind transfer avoids this.
Why this matters for Indian investors specifically
Fidelity does not immediately close accounts when you return to India. Instead, your account is typically moved to "sell-only" mode, meaning you can exit existing positions but cannot make new investments or buy additional shares.
This gives you more time to plan your move. But staying in sell-only mode indefinitely is not a solution. You can't add to your portfolio, you lose access to global markets, and you're left with a platform that doesn't support your Indian tax reporting or FEMA compliance needs.
At that point, your options are:
- Sell everything and remit cash to India under inward remittance, paying Indian capital gains tax on every appreciated position
- Transfer your holdings in-kind to a broker that supports Indian residents, with no capital gains event
How the transfer works
The transfer is initiated by your new broker, not by Fidelity. Here is the standard process:
- You open an account at the new broker
- You provide the new broker with your Fidelity account details, statements, and identification documents
- The new broker submits the transfer request through ACATS, which notifies Fidelity
- Fidelity validates the request within 1 business day and delivers the assets within 3 business days
- Your shares appear in the new account, with cost basis and purchase date preserved
You don't need to call Fidelity or notify them in advance. They are legally required to cooperate once the transfer request is submitted.
Note for Fidelity Stock Plan Services (NetBenefits) account holders: If your Fidelity account is a stock plan account holding RSUs or ESPPs from your US employer, the transfer process is different.
What can and cannot transfer from Fidelity
These assets transfer in-kind:
- Whole shares of US-listed stocks
- Whole shares of US-listed ETFs
- US Treasuries and bonds
- Settled cash
These cannot transfer in-kind from Fidelity:
- Fidelity proprietary mutual funds: Funds like Fidelity Contrafund, Fidelity 500 Index Fund, and other Fidelity-branded funds cannot be held at another broker; these will need to be sold before or during the transfer.
- Fractional shares (liquidated automatically; cash proceeds transfer separately)
- Unsettled trades
- Margin positions
If you hold Fidelity proprietary mutual funds, the rest of your portfolio (stocks, ETFs, non-Fidelity funds) can still transfer in-kind. The proprietary funds will be sold, which creates a taxable event on those specific positions only.
What does it cost?
Fidelity charges $0 outgoing ACATS fee, making it one of the most cost-friendly brokers to transfer out of. The receiving broker also does not charge anything for an incoming transfer.
How long does it take?
An ACATS transfer of US stocks and ETFs from Fidelity typically completes in 5 to 7 business days end-to-end.
This includes:
- 1 business day for validation
- 3 business days for delivery
- Additional time for residual transfers (pending dividends, proceeds from liquidated proprietary funds), which can take up to 30 days after the main transfer settles
Note: your Fidelity account is frozen during the transfer. You cannot place trades, modify positions, or withdraw cash until settlement completes.
Will I owe Indian capital gains tax on the transfer?
No.
Under Section 5 of the Income Tax Act, 2025, Indian capital gains tax applies when you sell a capital asset. Moving shares between two brokers is a custody change, not a sale. There is no realised gain, so there is nothing to tax. Your original purchase date and purchase price carry over to the new broker.
The exception is any Fidelity proprietary mutual funds that get liquidated during transfer, any fractional shares, and anything else that the new broker does not support. These create a taxable event on those specific positions only.
Transferring your Fidelity holdings to Paasa
Paasa is a global investing platform built for Indian residents and HNIs. It runs on Interactive Brokers infrastructure, which is an NSCC member, so Fidelity holdings can transfer directly to Paasa via ACATS.
Step-by-step transfer instructions for Fidelity are available in the Paasa app. Simply download the app, complete your sign-up, and follow the in-app guide to initiate your in-kind transfer.
The Paasa team can also help with the ACATS transfer if needed. Once you upload the required details, Paasa initiates the transfer. ACATS transfers are always initiated by the receiving broker, so you don't need to contact Fidelity directly.
Important: Paasa supports full transfers, not partial transfers, from Fidelity. Any Fidelity proprietary mutual funds, fractional shares, or unsettled trades need to be addressed before initiating. The Paasa team can guide you on the right approach during onboarding.
After your holdings arrive at Paasa, you have access to:
- US, UK, Swiss, European, Hong Kong, and Japanese exchanges in addition to your existing US holdings
- UCITS ETFs domiciled in Ireland and Luxembourg (which structurally avoid US estate tax exposure that US-domiciled ETFs carry)
- India-specific tax reporting aligned to the financial year, with INR conversion at RBI rates and capital gains pre-classified as STCG or LTCG
- LRS, FEMA, and Schedule FA support built into the platform
Common questions
Will the transfer affect my LRS limit for the year?
No. ACATS moves assets that are already held in the US. There is no INR-to-USD conversion and no fresh remittance involved. Your $250,000 annual LRS limit is untouched.
Do I need to report the transfer in my ITR?
No separate disclosure is required for a custody change between brokers. There is no capital gain to report because nothing has been sold. Your Schedule FA disclosure (if you are an ROR filer) reports holdings as of 31 December of the financial year, regardless of which broker holds them on that date.
My Fidelity account is in sell-only mode. Can I still initiate a transfer?
Yes. A sell-only restriction prevents new purchases but does not block an outgoing ACATS transfer. You can initiate the transfer from Paasa's side in the normal way.
I have both a Fidelity brokerage account and a NetBenefits stock plan account. Do both transfer via ACATS?
No. Your standard Fidelity brokerage account transfers via ACATS. Your NetBenefits stock plan account (holding RSUs or ESPP shares) typically uses a DTC Free of Payment transfer, which is a different process. Unvested RSUs cannot be transferred at all and remain with the plan until vesting.
About Paasa
Paasa is a global investing platform built for Indian HNIs, family offices, and institutions. We provide direct access to markets across the US, UK, Europe, Switzerland, and Asia, with an India-facing compliance layer built in from the ground up.
What that means in practice:
- FEMA and LRS compliance embedded into every transaction
- Tax reporting and analytics calibrated for Indian investors, covering LTCG, STCG, dividend withholding, and TCS tracking
- End-to-end support for remittance structuring, cost basis reconciliation, and Schedule FA disclosure
- In-app transfer guides for every major US broker, including Fidelity, so you can move your existing holdings without selling
