BEFORE YOU BEGIN TO TRADE
- 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.
- Ensure that you fill the KYC form completely and strike off the blank fields in
the KYC form.
- Ensure that you have read all the mandatory documents viz. Rights and Obligations,
Risk Disclosure Document, Policy and Procedure document of the stock broker.
- 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.
- 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.
- Obtain a copy of all the documents executed by you from the stock broker free of
- 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
- 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.
- Don't share your internet trading account's password with anyone.
- Don't make any payment in cash to the stock broker.
- Make the payments by account payee cheque in favour of the stock broker. Don't issue
cheques in the name of subbroker. 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.
- 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
- 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.
- 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.
- 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 MEMBERSHIP
- 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.
- 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.
- The client shall give any order for buy or sell of a security/derivatives contract
in writing or in such form or manner,as may be mutually agreed between the client
and the stock broker. The stock broker shall ensure to place orders and execute
the trades of the client, only in the Unique Client Code assigned to that client.
- The stock broker shall inform the client and keep him appr i s ed about t r ading/
s e t t l ement cycl e s , delivery/payment schedules, any changes therein from
time to time, and it shall be the responsibility in turn of the client to comply
with such schedules/procedures of the relevant stock exchange where the trade is
- The stock broker shall ensure that the money/securities deposited by the client
shall be kept in a separate account, distinct from his/its own account or account
of any other client and shall not be used by the stock broker for himself/itself
or for any other client or for any purpose other than the purposes mentioned in
Rules, Regulations, circulars, notices, guidelines of SEBI and/or Rules, Regulations,
Bye-laws, circulars and notices of Exchange.
- Where the Exchange(s) cancels trade(s) suo moto all such trades including the trade/s
done on behalf of the client shall ipso facto stand cancelled, stock broker shall
be entitled to cancel the respective contract(s) with client(s).
- The transactions executed on the Exchange are subject to Rules, Byelaws and Regulations
and circulars/notices issued thereunder of the Exchanges where the trade is executed
and all parties to such trade shall have submitted to the jurisdiction of such court
as may be specified by the Byelaws and Regulations of the Exchanges where the trade
is executed for the purpose of giving effect to the provisions of the Rules, Byelaws
and Regulations of the Exchanges and the circulars/notices issued thereunder.