Investor Charter – Stock Broker
Vision
To follow highest standards of ethics and compliances while facilitating the trading by clients in securities in a fair and transparent manner, so as to contribute in creation of wealth for investors.
Mission
Services provided to Investors
Rights of Investors
Various activities of Stock Brokers with timelines
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Topic |
Expected Timelines |
KYC entered into KRA System and CKYCR |
10 days of account opening |
Client Onboarding |
Immediate, but not later than one week |
Order execution |
Immediate on receipt of order, but not later than the same day |
Allocation of Unique Client Code |
Before trading |
Copy of duly completed Client Registration Documents to clients |
7 days from the date of upload of Unique Client Code to the Exchange by the trading member |
Issuance of contract notes |
24 hours of execution of trades |
Collection of upfront margin from client |
Before initiation of trade |
Issuance of intimations regarding other margin due payments |
At the end of the Today |
Settlement of client funds |
30 days / 90 days for running account settlement (RAS) as per the preference of client. If consent not given for RAS – within 24 hours of pay-out |
Statement of Accounts for Funds,Securities and Commodities |
Weekly basis (Within four trading days of following week) |
Issuance of retention statement of funds/commodities |
5 days from the date of settlement |
Issuance of Annual Global Statement |
30 days from the end of the financial year |
Investor grievances redressal |
30 days from the receipt of the complaint |
DOs and DON’Ts for Investors
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DOs |
Don'ts |
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1. Read all documents and conditions being agreed before signing the account opening form. |
1. Do not deal with unregistered stock broker. |
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2. Receive a copy of KYC, copy of account opening documents and Unique Client Code |
2. Do not forget to strike off blanks in your account opening and KYC. |
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3. Read the product / operational framework / time lines related to various Trading and Clearing & Settlement processes. |
3. Do not submit an incomplete account opening and KYCform. |
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4. Receive all information about brokerage, fees and other charges levied. |
4. Do not forget to inform anychange in information linked to trading account and obtain confirmation of updation in the system. |
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5. Register your mobile number and email-ID in your trading, demat and bank accounts to get regular alerts on your transactions |
5. Do not transfer funds, for thepurposes of trading to any one other than a stock broker. Nopayment should be made in name of employee of stock broker. |
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6. If executed, receive a copy of Power of Attorney. However, Power of Attorney is not a mandatory requirement as per SEBI / Stock Exchanges. Before granting Power of Attorney, carefully examine the scope and implications of powers being granted. |
6. Do not ignore any emails / SMS received with regards to trades done, from the Stock Exchange and raise a concern, if discrepancy is observed. |
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7. Receive contract notes for trades executed, showing transaction price, brokerage, GST and STT etc. as applicable, separately, within 24 hours of execution of trades. |
7. Do not opt for digital contracts, if not familiar with computers. |
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8. Receive funds and securities / commodities on time within 24 hours from pay-out. |
8. Do not share trading password. |
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9. Verify details of trades, contract notes and statement of account and approach relevant authority for any discrepancies. Verify trade details on the Exchange websites from the trade verification facility provided by the Exchanges. |
9. Do not fall prey to fixed / guaranteed returns schemes. |
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10. Receive statement of accounts periodically. If opted for running account settlement, account has to be settled by the stock broker as per the option given by the client (30 or 90 days). |
10. Do not fall prey to fraudsters sending emails and SMS sluring to trade in stocks /securities promising huge profits. |
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11. In case of any grievances, approach stock broker or Stock Exchange or SEBI for getting the same resolved within prescribed time lines. |
11. Do not follow herd mentalityfor investments. Seek expertand professional advice for your investments. |
Grievance Redressal Mechanism
Level 1 - Approach the Stock Broker at the designated Investor Grievance e-mail ID of the stock broker. The Stock Broker will strive to redress the grievance immediately, but not later than 30 days of the receipt of the grievance.
Level 2- Approach the Stock Exchange using the grievance mechanism mentioned at the website of the respective exchange. Complaints Resolution Process at Stock Exchange explained graphically:
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Type of Activity |
Timelines for activity |
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1. Receipt of Complaint |
1. Day of complaint (C Day). |
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2. Additional information sought from the investor, if any, and provisionally forwarded to stock broker. |
2. C + 7 Working days. |
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3. Registration of the complaint and forwarding to the stock broker. |
3. C + 8 Working Days i.e. T day. |
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4. Amicable Resolution. |
4. T + 15 Working Days. |
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5. Refer to Grievance Redressal Committee (GRC), in case of no amicable resolution. |
5. T + 16 Working Days. |
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6. Complete resolution process post GRC. |
6. T + 30 Working Days. |
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7. In case where the GRC Member requires additional information, GRC order shall be completed within. |
7. T + 45 Working Days. |
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8. Implementation of GRC Order. |
8. On receipt of GRC Order, if the order is in favour of the investor, debit the funds of the stock broker. Order for debit is issued immediately or as per the directions given in GRC order. |
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9. In case the stock broker is aggrieved by the GRC order, will provide intention to avail arbitration |
9. Within 7 days from receipt of order |
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10. If intention from stock broker is received and the GRC order amount is upto Rs.20 lakhs |
10. Investor is eligible for interim relief from Investor Protection Fund (IPF).The interim relief will be 50% of the GRC order amount or Rs.2 lakhs whichever is less. The same shall be provided after obtaining an Undertaking from the investor. |
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11. Stock Broker shall file for arbitration |
11. Within 6 months from the date of GRC recommendation |
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12. In case the stock broker does not file for arbitration within 6 months |
12. The GRC order amount shall be released to the investor after adjusting the amount released as interim relief, if any. |
Handling of Investor’s claims / complaints in case of default of a Trading Member / Clearing Member (TM/CM)
Default of TM/CM
Following steps are carried out by Stock Exchange for benefit of investor, in case stock broker defaults:
• Circular is issued to inform about declaration of Stock Broker as Defaulter.• Information of defaulter stock broker is disseminated on Stock Exchange website.
• Public Notice is issued informing declaration of a stock broker as defaulter and inviting claims within specified period.
• Intimation to clients of defaulter stock brokers via emails and SMS for facilitating lodging of claims within the specified period.
Following information is available on Stock Exchange website for information of investors:
• Norms for eligibility of claims for compensation from IPF.• Claim form for lodging claim against defaulter stock broker.
• FAQ on processing of investors’ claims against Defaulter stock broker
• Provision to check online status of client’s claim.
Level 3 The complaint not redressed at Stock Broker / Stock Exchange level, may be lodged with SEBI on SCORES (a web based centralized grievance redressal system of SEBI)
https://scores.sebi.gov.inAnnexure B- Investor Complaints Data - Stock Broker
Beware of fixed/guaranteed/regular returns/ 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. 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 last 30 calendar days. Please note that in case of default of a Member, 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. 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 declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link: https://www.nseindia.com/invest/about-defaulter-section. Brokers are not permitted to accept transfer of securities as 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. Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly. 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. 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 broker and immediately raise a concern to the exchange if you notice a discrepancy.