Do’s and Don’ts


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 and SEBI website
  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 stockbroker.
  4. Ensure to read, understand and then sign the voluntary clauses, if any, agreed between you and the stockbroker. Note that the clauses as agreed between you and the stockbroker 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 stockbroker free of charge.
  7. In case you wish to execute Power of Attorney (POA) in favor of the Stockbroker, authorizing it to operate your bank and Demat account, please refer to the guidelines issued by SEBI/Exchanges in this regard.

Transactions and Settlements

  1. The stock broker may issue electronic contract notes (ECN) if specifically authorized by you in writing. You should provide your email id to the stockbroker for the same. Don’t opt for ECN if you are not familiar with computers.
  2. Don’t share your internet trading account’s password with anyone.
  3. Don’t make any payment in cash to the stockbroker.
  4. 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 the date, scrip, quantity, towards which bank/Demat account such money or securities deposited, and from which bank/Demat account.
  5. Note that the 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.
  6. 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 stockbroker shall maintain a running account for you subject to the following conditions:
    1. Such authorization from you shall be dated, signed by you only and contains the clause that you may revoke the same at any time.
    2. 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.
    3. 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.
    4. 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.
  7. 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
  8. 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.

In Case of Termination of Trading Memberships

  1. 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.
  2. 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

  1. Please note that the details of the arbitration proceedings, penal action against the brokers, and investor complaints against the stockbrokers are displayed on the website of the relevant Stock exchange.
  2. In case your issue/problem/grievance is not being sorted out by the 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.
  3. Note that all the stock broker/sub-brokers has been mandated by SEBI to designate an e-mail ID of the grievance redressal division/ Compliance officer exclusively for the purpose of registering complaints.
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Investor Awareness

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange’s Frequently Asked Questions (FAQs) issued vide BSE notice no. 20200731-7 dated July 31, 2020 and 20200831-45 dated August 31, 2020 and NSE circular no. NSE/INSP/45191 dated July 31, 2020 and NSE/INSP/45534 dated August 31, 2020 other guidelines issued from time to time in this regard.

5. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.

Attention Investors

Prevent Unauthorized Transactions in your trading and/or demat account – Update your
Mobile Number and / or email IDs with your Stock Broker and / or Depository Participant. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat account directly from CDSL on the same day / information of your transactions directly from Exchange on your mobile/email at the end of the day………………….issued in the interest of investors.

“KYC is one time exercise while dealing in securities markets – once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.”

No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor’s account.”