Dos

  1. a) a) Before entering into a contract with a broker, ensure that he is registered with SEBI.
  2. b)b) Satisfy oneself about the credentials of the broker by asking for information/documents supporting his claims.
  3. c) c) Read all documents and conditions being agreed upon before signing the account opening form.
  4. d)d) Ensure that a copy of KYC, copy of account opening documents and UCC code are received.
  5. e)e) Ensure to receive all information about brokerage, fees and other charges levied.
  6. f) f) Furnish required details in full.
  7. g) g) Ensure that a contract note is issued by the broker which contains complete records of every transaction within 24hrs of the execution of the contract.
  8. h) h) In case pay-out of money and / or securities is not received on the next working day after date of pay-out, follow up with the concerned broker for its release. On nonreceipt of satisfactory reply / funds and securities, ensure to lodge a complaint immediately on SEBI Complaint Redress System (SCORES) or with the investors’ grievance cell of the stock exchange.
  9. i) i) Ensure that a copy of DDPI/PoA, if executed, is received. Note that PoA and DDPI are not mandatory requirements as per SEBI / stock exchanges and PoA is no longer to be executed for the purposes specified in FAQ no. 12. Before granting PoA/DDPI, carefully examine the scope and implications of powers being granted.
  10. j) j) Ensure to receive a complete ‘Statement of Accounts’ for both funds and securities settlements weekly as well as on quarterly/monthly basis, as per preference in case of running account of settlement of funds.
  11. k) k) Register mobile number and email ID in trading, demat, and bank accounts to get regular alerts on your transactions. Regularly check messages received on registered mobile no/ email ID with regard to trading activity.
  12. l) Beware of fixed/guaranteed returns schemes. Brokers or any of their representatives are not authorized to offer fixed/guaranteed returns on your investment or enter into any loan agreement to pay interest on the funds/securities/commodities offered by you.
  13. m)m) Check messages sent by stock exchanges on a weekly basis regarding funds / securities / commodities balances reported by the stock broker and immediately raise concern, if you notice a discrepancy.
  14. n) n) Attend various investor awareness programs held by SEBI / stock exchanges / depositories.

Don’ts

  1. a) a) Do not share account details i.e. username and password (internet account) with anyone.
  2. b) b) Do not share OTPs received in connection with trading and demat account transactions.
  3. c) c) Do not transfer securities to your stock broker for the purpose of margin. Under the pledge-repledge mechanism, securities remain in client’s account only and the same are pledged to stock broker for margin purpose
  4. d) d) Do not fall prey to fraudsters sending emails and SMSs luring to trade in securities promising huge profits
  5. e) e) Ensure to go through the investor charter for stock brokers.