DO'S AND DON'TS
DO’S
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 respective websites and SEBI website www.sebi.gov.in.
Ensure that you fill the KYC form completely and affix the signature in all the blank fields in the KYC form and obtain a copy of all the documents executed by you from the Stock Broker/Depository Participant and charge slip, free of charge.
Give clear and unambiguous instructions to your Stock Broker/Authorized Person/Depository Participant.
Be careful while executing the POA (Power of Attorney) – specify all the rights that the stock broker can exercise and time frame for which POA is valid. It may be noted that POA is not a mandatory requirement as per SEBI/Exchanges. Register for online applications viz. speed-e and Easiest provided by depository for online delivery of securities as an alternative to POA.
Ensure that you receive contract note within 24 hours of your trades and statement of account at least once in a quarter/month from your stock broker.
If you have opted for running account, please ensure that the stock broker settles your account regularly and in any case not later than 90 days (or 30 days if you have opted for 3 days settlement).
Ensure that you have read the mandatory documents viz. Rights and Obligations, Risk Disclosure Document, Policy and Procedure document of the stock broker and Rights and Obligations of the Depository Participant.
If you observe any discrepancies in your account or settlements, immediately take up the same with your stock broker in writing within seven working days from date of receipt of the statement. If the stock broker does not respond, take up the matter with the Exchanges/Depositories.
Attend various Investor Awareness Programs held by SEBI/Exchanges/Depositories for awareness of various changes in the markets.
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 are binding on both of you and the stock broker.
Get a clear idea about the brokerage, fees and other charges levied by the broker/depository participant on you for your Trading Account/Demat Account and the relevant provisions/guidelines prescribed by the SEBI/Stock Exchanges/Depository. Refer to the guidelines issued by SEBI/Exchanges in this regard.
Ensure to keep your contact details updated with the Stock Broker, authorizing it to operate your Bank and Demat Account, please refer to the guidelines issued by SEBI/Exchanges in this regard.
Do not forget to match your trades with the contract notes and bills received from your stock broker.
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.
Be cautious about stocks which show a sudden spurt in price or trading activities, especially low-price stocks.
Always keep copies of the investment documents, receipts of investments made, contract notes, acknowledgement slips, contract notes etc.
Send important documents by reliable mode (preferably through Speed Post) to avoid non-receipt/loss in transit.
Ensure that you have a payment account in favour of the Stock Broker.
Ensure that you have the securities in your demat holding before giving for sell of the securities.
Verify the trade facility of Trade Verification available on the Stock Exchange website.
In case you are unable to resolve grievances, you may take up the matter with the concerned Stock Exchange.
Lodge your Arbitration Application against the Trading Member at the Investor Service Cell (of the Stock Exchange).
Always deal with a SEBI registered Depository Participant for opening a demat account.
Read all the documents carefully before signing them.
Before granting Power of Attorney to operate your demat account to an intermediary like Stock Broker, Portfolio Management Services (PMS) etc., carefully examine the scope and implications of powers being granted.
Always make payments to registered intermediary using banking channels. No payment should be made in name of employee of intermediary.
Accept the Delivery Instruction Slip (DIS) book from your DP only (pre-printed with a serial number along with your Client ID) and keep it in safe custody and do not sign or issue blank or partially filled DIS slips.
Always mention the details like ISIN, number of securities accurately. In case of any queries, please contact your DP or broker and it should be signed by all demat account holders.
Strike out any blank space on the slip and cancellations or corrections on the DIS should be initialed or signed by all the account holder(s).
Inform any change in your Personal Information (for example address or Bank Account details, email ID, Mobile number) linked to your demat account in the prescribed format and obtain confirmation of updation in system.
Mention your Mobile Number and email ID in account opening form to receive SMS alerts and regular updates directly from depository.
Always ensure that the mobile number and email ID linked to your demat account are the same as provided at the time of account opening/updation.
If you have any grievance in respect of your demat account, please write to designated email IDs of depositories or you may lodge the same with SEBI online at https://scores.gov.in/scores/Welcome.html
Keep a record of documents signed, DIS issued and account statements received.
As Investors you are required to verify the transaction statement carefully for all debits and credits in your account. In case of any unauthorized debit or credit, inform the DP or your respective Depository.
Appoint a nominee to facilitate your heirs in obtaining the securities in your demat account, on completion of the necessary procedures.
Register for Depository’s internet-based facility or download mobile app of the depository to monitor your holdings.
Ensure that both your holding and transaction statements are received periodically as instructed to your DP. You are entitled to receive a transaction statement every month if you have any transactions.
Do not follow herd mentality for investments. Seek expert and professional advice for your investments.
Beware of assured/fixed returns.
Do not transfer Securities to your stock broker for the purpose of margin. They remain in your account only and you need to pledge them to your stock broker through the pledge mechanism.
Don’t ignore any emails/SMS received with regards to trades done by you from the exchange.
Do not keep funds/securities idle with the stock Broker.
Don’t hesitate to approach persons and then the appropriate authorities.
DON’Ts
Don’t execute any documents with any Intermediaries without fully understanding its Terms & Conditions.
Don’t share your internet trading account’s user ID/Password and do not leave it written anywhere.
Don’t transfer your securities/funds to the account of the Authorized Person.
Don’t deal in any scrips for which unsolicited messages are circulated.
Don’t blindly follow investment tips or rely on information provided by unverified sources.
Don’t be misled by companies showing approvals from Government Agencies as the approval could be for purposes other than investments.
Don’t be carried away with advertisements about the financial performance of companies as they could be misleading.
Don’t blindly follow media reports or unverified online discussions on stocks.
Don’t blindly follow media reports or unverified online discussions on stocks.
Don’t forget to obtain all documents of transactions, in good faith even from people you know.
Don’t forget to take note of the risks involved in an investment.
Do not leave your instruction slip book with anyone else.
Do not sign blank DIS as it is equivalent to a bearer cheque.
Do not share password of your online trading and demat account with anyone.
Do not share One Time Password (OTP) received from banks, brokers, etc. These are meant to be used by you only.
Do not share login credentials of e-facilities provided by the depositories such as eDIS/demat gateway, SPEED-e/easiest etc. with anyone else.
Demat is mandatory for any transfer of securities of Listed public limited companies with few exceptions.