I. 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 Know Your Client (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 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 demat
account, please refer to the guidelines issued by SEBI/Exchanges in this
regard.
II. 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 payment 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 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 exchange without delay.
14. In case you have opted for maintaining
running account and pay-out of funds/securities is not received next working
day of the receipt of payout from the exchanges, please refer the matter to the
stock broker. If there is dispute,
ensure that you lodge a complaint in writing immediately with the Investors
Grievance Cell relevant Stock exchange.
15. Please register your mobile number and email
id with the stock broker, to receive confirmation alerts/details of the
transactions through SMS or email, by the end of the trading day, from the
exchanges.
III. IN CASE OF TERMINATION OF TRADING
MEMBERSHIP
16. In case, a stock broker surrenders his membership,
is expelled from membership or declares a defaulter; exchanges gives a public
notice inviting claims relating to only the “transactions executed on the
trading system Stock exchange, from the investors. Ensure that you lodge a claim with the
relevant Stock exchanges with 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 broker,
particularly in the event of a default or the stock broker’s insolvency or
bankruptcy and the extent to you may recover such money and/or securities may
be governed by the Bye-laws and regulations of the Stock exchange where the
trade was executed and the scheme of the Investors’ protection Fund in force
from time to time.
IV. DISPUTES/ COMPLAINTS
18. Please note that the details of the
arbitration proceedings, penal action against the brokers and investor complaint
against the stock brokers are displayed on the website of the relevant Stock
exchange.
19. In case your issue is not being sorted out by
concerned stock broker/sub-broker then you may take up the matter with
concerned Stock exchange. If you are not
satisfied with the resolution of your complaint then you can escalate matter to
SEBI.
20. Note that all the stock broker/sub-brokers
have been mandated by SEBI to designate an e-mail of the grievance redressal
division/compliance officer exclusively for the purpose of registering
complaints.
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