Other Regulatory Communication
“Attention Investors
………. Issued in the interest of Investors”
Advisory for Investors
1. Investors are advised not to blindly follow the unfounded rumours, tips given in social networks, SMS, WhatsApp, Blogs etc. and invest only after conducting an appropriate analysis of respective companies. Beware of fraudster entities operating throughout India and sending bulk messages on the pretext of providing investment tips and luring investors to invest with them in their bogus firms by promising hefty profits.
2. Beware of unauthorised collective investments/portfolio management/fixed/guaranteed/regular returns/ payments/capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
3. Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within the last 30 calendar days. Please note that in case of default of a Member, a claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.
4. Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of the declaration of the trading member as a defaulter, the claims of clients against such a defaulter member would be subject to norms for eligibility of claims or compensation from IPF to the clients of the defaulter member. These norms are available on the Exchange website at the following link: https://www.nseindia.com/invest/about-defaulter section & https://www.bseindia.com/static/investors/Claim_against_Defaulter.aspx
5. Brokers are not permitted to accept the transfer of securities as a margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.
6. Always keep your contact details viz. Mobile number/Email ID updated with the stock broker to prevent unauthorised transactions in your account. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records and to receive information of your transactions directly from Exchange on your email/mobile at the end of the day. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.
7. Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.
8. Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by the broker and immediately raise a concern to the exchange if you notice a discrepancy.
9. Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.
10. 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.
11. 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.”
Precautions for clients dealing in Options
With reference to the below-mentioned circulars on precautions for clients dealing in options, we would like to inform you that the exchange has advised us to create awareness amongst the clients/investors to sensitise and avoid practices like:
a. Sharing of trading credentials – login id & passwords including OTP’s.
b. Trading in leveraged products like options without proper understanding, which could lead to losses.
c. Writing/ selling options or trading in option strategies based on tips, without basic knowledge & understanding of the product and its risks.
d. Dealing in unsolicited tips through WhatsApp, Telegram, YouTube, Facebook, SMS, calls, etc.
e. Trading in “Options” based on recommendations from unauthorised / unregistered investment advisors and influencers.
