INVES 21

Investor Advisory

Important to Investors

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 NSE 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 are mandatory and you must provide the same to your broker for updating 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
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.

Risk disclosures on derivatives

9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
On an average, loss makers registered net trading loss close to ₹50,000.
Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.

Precautions for clients dealing in Options

Do not share your trading credentials - login id & passwords including OTP's.
Trading in leveraged products like options without proper understanding could lead to losses.
Do not write / sell options or trade in option strategies based on tips, without basic knowledge & understanding of the product and its risk.
Be cautious while dealing in unsolicited tips through WhatsApp, Telegram, YouTube, Facebook, SMS, calls, etc.
Do no trade in "Options" based on recommendations from unauthorised / unregistered investment advisors and influencers.

Advisory – UCC Compliance

All investors are requested to take note that 6 KYC attributes, i.e., Name, PAN, Address, Mobile Number, Email id, and Income Range, have been made mandatory. Investors availing of custodian services will additionally be required to update the custodian details.
The last date to update KYC is on or before March 31, 2022.
Thereafter non-compliant trading accounts will be blocked for trading by the Exchange.
The non-compliant demat accounts will be frozen for debits by Depository Participant or Depository.
On submission of the necessary information to the stockbroker and updating of the same by the stockbroker in the Exchange systems and approval by the Exchange, the blocked trading accounts shall be unblocked by the Exchange on T+1 trading day.
The demat account shall be unfreeze once the investor submits the deficient KYC details and the same is captured by the depository participant in the depository system.
To ensure smooth settlement of trades, the investors are requested to ensure that both the trading and demat accounts are compliant with respect to the KYC requirement.
The investors are hereby requested to comply with the regulatory guidelines issued by Exchanges and Depositories from time to time with regard to KYC compliance and related requirements.

Note: The above information is pursuant to NSE circular number NSE/ISC/51035.