BEFORE YOU BEGIN TO TRADE
1. Ensure that you deal with and through only SEBI registered intermediaries. You may check their SEBI registration certificate number from the list available on the Stock exchanges www.exchange.com and SEBI website www.sebi.gov.in.
2. Ensure that you fill the KYC form completely and strike off the blank fields in the KYC form.
3. Ensure that you have read all the mandatory documents viz. Rights and Obligations, Risk Disclosure Document, Policy and Procedure document of the stock broker.
4. Ensure to read, understand and then sign the voluntary clauses, if any, agreed between you and the stock broker. Note that the clauses as agreed between you and the stock broker cannot be changed without your consent.
5. Get a clear idea about all brokerage, commissions, fees and other charges levied by the broker on you for trading and the relevant provisions/ guidelines specified by SEBI/Stock exchanges.
6. Obtain a copy of all the documents executed by you from the stock broker free of charge.
7. In case you wish to execute Power of Attorney (POA) in favour of the Stock broker, authorizing it to operate your bank and demat account, please refer to the guidelines issued by SEBI/Exchanges in this regard.
TRANSACTIONS AND SETTLEMENTS
8. The stock broker may issue electronic contract notes (ECN) if specifically authorized by you in writing. You should provide your email id to the stock broker for the same. Don't opt for ECN if you are not familiar with computers.
9. Don't share your internet trading account's password with anyone.
10. Don't make any payment in cash to the stock broker.
11. Make the payments by account payee cheque in favour of the stock broker. Don't issue cheques in the name of sub-broker. Ensure that you have a documentary proof of your payment/deposit of securities with the stock broker, stating date, scrip, quantity, towards which bank/ demat account such money or securities deposited and from which bank/ demat account.
12. Note that facility of Trade Verification is available on stock exchanges' websites, where details of trade as mentioned in the contract note may be verified. Where trade details on the website do not tally with the details mentioned in the contract note, immediately get in touch with the Investors Grievance Cell of the relevant Stock exchange.
13. In case you have given specific authorization for maintaining running account, payout of funds or delivery of securities (as the case may be), may not be made to you within one working day from the receipt of payout from the Exchange. Thus, the stock broker shall maintain running account for you subject to the following conditions: a) Such authorization from you shall be dated, signed by you only and contains the clause that you may revoke the same at any time. b) The actual settlement of funds and securities shall be done by the stock broker, at least once in a calendar quarter or month, depending on your preference. While settling the account, the stock broker shall send to you a 'statement of accounts' containing an extract from the client ledger for funds and an extract from the register of securities displaying all the receipts/ deliveries of funds and securities. The statement shall also explain the retention of funds and securities and the details of the pledged shares, if any. c) On the date of settlement, the stock broker may retain the requisite securities/funds towards outstanding obligations and may also retain the funds expected to be required to meet derivatives margin obligations for next 5 trading days, calculated in the manner specified by the exchanges. In respect of cash market transactions, the stock broker may retain entire pay-in obligation of funds and securities due from clients as on date of settlement and for next day's business, he may retain funds/securities/margin to the extent of value of transactions executed on the day of such settlement in the cash market. d) You need to bring any dispute arising from the statement of account or settlement so made to the notice of the stock broker in writing preferably within 7 (seven) working days from the date of receipt of funds/securities or statement, as the case may be. In case of dispute, refer the matter in writing to the Investors Grievance Cell of the relevant Stock exchanges without delay.
14. In case you have not opted for maintaining running account and pay-out of funds/securities is not received on the next working day of the receipt of payout from the exchanges, please refer the matter to the stock broker. In case there is dispute, ensure that you lodge a complaint in writing immediately with the Investors Grievance Cell of the relevant Stock exchange.
15. Please register your mobile number and email id with the stock broker, to receive trade confirmation alerts/ details of the transactions through SMS or email, by the end of the trading day, from the stock exchanges. 9 IN CASE OF TERMINATION OF TRADING MEMBERSHIP
16. In case, a stock broker surrenders his membership, is expelled from membership or declared a defaulter; Stock exchanges gives a public notice inviting claims relating to only the "transactions executed on the trading system" of Stock exchange, from the investors. Ensure that you lodge a claim with the relevant Stock exchanges within the stipulated period and with the supporting documents.
17. Familiarize yourself with the protection accorded to the money and/or securities you may deposit with your stock broker, particularly in the event of a default or the stock broker's insolvency or bankruptcy and the extent to which you may recover such money and/or securities may be governed by the Bye-laws and Regulations of the relevant Stock exchange where the trade was executed and the scheme of the Investors' Protection Fund in force from time to time. DISPUTES/ COMPLAINTS
18. Please note that the details of the arbitration proceedings, penal action against the brokers and investor complaints against the stock brokers are displayed on the website of the relevant Stock exchange.
19. In case your issue/problem/grievance is not being sorted out by concerned stock broker/sub-broker then you may take up the matter with the concerned Stock exchange. If you are not satisfied with the resolution of your complaint then you can escalate the matter to SEBI.
20. Note that all the stock broker/sub-brokers have been mandated by SEBI to designate an e-mail ID of the grievance redressal division/compliance officer exclusively for the purpose of registering complaints.
Rights of Investors
1. To receive all benefits/ material information declared for the investors by the Company.
2. Prompt services from the Company such as transfers, Sub-divisions and consolidation of holdings in the Company.
3. As an equity holder have a right to subscribe to further issue of capital by the Company.
4. Shares and /or Debentures of Joint 0.25 per stock companies share/ debenture or 2.5% of the contract price per share/ Debenture whichever is higher.
5. Receipt of the Contract Note from the broker in the specified format showing transaction price, brokerage, Service Tax and STT, separately
6. Expect delivery of shares purchased/value of shares sold within 24 hours from pay-out.
Approach nearest Regional Investor Service Centers of BSE/NSE.
The Complaint against trading members of the Exchange or Applications for Arbitration should be filed at the nearest Regional Investor Service Centre referred, within which the most recent address / registered office address of the constituent, as duly communicated in writing to the trading member in accordance with law, is located. The hearings shall be held in the concerned Regional Investor Service Centre in which the Applicant had duly filed the Complaints / Application for Arbitration.
1. Always deal with the market intermediaries registered with SEBI / stock exchanges.
2. Collect photocopies of all documents executed for registration as a client, immediately on its execution. Ensure that the documents or forms for registration as Client are fully filled in.
3. Give clear and unambiguous instructions to your broker / agent / depository participant.
4. Always insist on contract notes from your broker. In case of doubt in respect of the transactions, verify the genuineness of the same on the BSE/NSE website.
5. Always settle the dues through the normal banking channels with the market intermediaries.
6. Before placing an order with the market intermediaries, please check about the credentials of the companies, its management, fundamentals and recent announcements made by them and various other disclosures made under various regulations. The sources of information are the websites of Exchanges and companies, databases of data vendor, business magazines etc.
7. Adopt trading / investment strategies commensurate with your risk-bearing capacity as all investments carry some risk, the degree of which varies according to the investment strategy adopted.
8. Carry out due diligence before registering as client with any intermediary. Carefully read and understand the contents stated in the Risk Disclosure Document, which forms part of the investor registration requirement for dealing through brokers.
9. Be cautious about stocks which show a sudden spurt in price or trading activity, especially low price stocks.
10. There are no guaranteed returns on investment in the stock market .
11. Always keep copies of all investment documentation (e.g. application forms, acknowledgements slips, contract notes).
12. Always keep copies of documents you are sending to companies, Trading Member, Registrar and Transfer Agent, etc.
12. Send important documents by a reliable mode (preferably through registered post) to ensure delivery.
13. Ensure that you have money before you buy.
14. Ensure that you are holding securities before you sell.
15. Follow up diligently and promptly e.g. If you do not receive the required documentation within a reasonable time, contact the concerned person; i.e. the Trading Member, company etc., immediately.
16. Mention clearly whether you want to transact in physical mode or in demat mode.
17. Lodge your Arbitration Application against the Trading Member, at the concerned Regional Investor Service Centre, by confirming geographical jurisdiction. Please use for the purpose, your address as intimated to your Trading Member by following due process of law. The details of geographical jurisdiction of each Regional Investor Service Centre are also available on the Contract Note. The period consumed in redressal of complaint thru IGRC services will not be considered while measuring period of ‘limitation’ in filing arbitration application provided the complaint and / or arbitration application is / are filed at the concerned Regional Investor Service Centre.
18. Lodge your complaint against a company listed on BSE/NSE, at the concerned Regional Investor Service Centre, by confirming geographical jurisdiction. Please use your address for deciding the geographical jurisdiction. This will enable to process the complaint expeditiously.
1. Don’t deal with unregistered brokers / sub – brokers, or other unregistered intermediaries.
2. Don’t execute any documents with any intermediary without fully understanding its terms and conditions.
3. Don’t file your arbitration application against trading member, in the Regional Investor Service Centre having no geographical jurisdiction over the matter. Please use for the purpose, your address as intimated to your Trading Member by following due process of law
4. The Exchange redresses investors’ complaints thru arbitration and IGRC mechanism, which are quasi-judicial in nature. The period consumed in redressal of complaint thru IGRC will not be considered while measuring period of ‘limitation’ in filing arbitration application provided the complaint is filed at the concerned Regional Investor Service Centre.
5. Don’t file your grievance /s against companies listed on BSE, in the Regional Investor Service Centre having no geographical jurisdiction over the matter, for its expeditious redressal.Please use your address for deciding the geographical jurisdiction.
6. Don’t deal based on rumours or ‘tips’.
7. Don’t fall prey to promises of guaranteed returns.
8. Don’t get misled by companies showing approvals / registrations from Government agencies as the approvals could be for certain other purposes and not for the securities you are buying.
9. Don’t leave the custody of your Demat Transaction slip book in the hands of any intermediary.
10. Don’t get carried away with advertisements about the financial performance of companies in print and electronic media.
11. Don’t blindly follow media reports on corporate developments, as some of these could be misleading.
12. Don’t blindly imitate investment decisions of others who may have profited from their investment decisions.
13. Don’t forgo obtaining all documents of transactions, in good faith even from people whom you know.
14. Don’t forget to take note of the risks involved in an investment.
15. Don’t get misled by guarantees of repayment of your investments through post-dated cheques.
16. Don’t hesitate to approach concerned persons and then the appropriate authorities.
17. Don’t get swayed by promises of high returns.