Risk Disclosures
| Risk Disclosures on derivatives |
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Source:
SEBI study dated January 25, 2023 on “Analysis of Profit and Loss of Individual Traders dealing in equity Futures and Options (F&O) Segment”, wherein Aggregate Level findings are based on annual Proft/Loss incurred by individual traders in equity F&O during FY 2021-22.
Investor Charter - Stock Brokers
Vision
To follow highest standards of ethics and compilances 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
- To provide high quality and dependable service through innovation, capacity enhancement and use of technology.
- To establish and maintain a relationship of trust and ethics with the investors.
- To observe highest standard of compliances and transparency.
- To always keep ‘protection of investors’ interest’ as goal while providing service.
Services provided to Investors
- Execution of trades on behalf of investors.
- Issuance of Contract Notes.
- Issuance of intimations regarding margin due payments.
- Facilitate execution of early pay-in obligation instructions.
- Settlement of client’s funds.
- Intimation of securities held in Client Unpaid Securities Account (CUSA) Account.
- Issuance of retention statement of funds.
- Risk management systems to mitigate operational and market risk.
- Facilitate client profile changes in the system as instructed by the client.
- Information sharing with the client w.r.t. exchange circulars.
- Redressal of Investor’s grievances.
Rights of Investors
- Ask for and receive information from a firm about the work history and background of the person handling your account, as well as information about the firm itself.
- Receive complete information about the risks, obligations, and costs of any investment before investing.
- Receive recommendations consistent with your financial needs and investment objectives.
- Receive a copy of all completed account forms and agreements.
- Receive account statements that are accurate and understandable.
- Understand the terms and conditions of transactions you undertake
- Access your funds in a timely manner and receive information about any restrictionsor limitations on access.
- Receive complete information about maintenance or service charges, transaction or redemption fees, and penalties.
- Discuss your grievances with compliance officer of the firm and receive prompt attention to and fair consideration of your concerns.
Various activities of Stock Brokers with timelines
| S.No. | Activities | Expected Timelines |
|---|---|---|
| 1. | KYC entered into KRA System and CKYCR | 10 days of account opening |
| 2. | Client Onboarding | Immediate, but not later than one week |
| 3. | Order execution | Immediate on receipt of order, but not later than the same day |
| 4. | Allocation of Unique Client Code | Before trading |
| 5. | 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 |
| 6. | Issuance of contract notes | 24 hours of execution of trades |
| 7. | Collection of upfront margin from client | Before initiation of trade |
| 8. | Issuance of intimations regarding other margin due payments | At the end of the T day |
| 9. | Settlement of client funds | 30 days / 90 days for running account settlement (RAS) as per the preferenceof client. If consent not given for RAS - within 24 hours of pay-out |
| 10. | ‘Statement of Accounts’ for Funds, Securities and Commodities | Weekly basis (Within four trading days of Securities and Commodities following week) |
| 11. | Issuance of retention statement of funds/commodities | 5 days from the date of settlement |
| 12. | Issuance of Annual Global Statement | 30 days from the end of the financial year |
| 13. | Investor grievances redressal | 30 days from the receipt of the complaint |
DOs and DON’Ts for Investors
| S.No. | DOs | DON’Ts |
|---|---|---|
| 1. | Read all documents and conditions being agreed before signing the account opening Form. | Do not deal with unregistered stockbroker. |
| 2. | Receive a copy of KYC, copy of account opening documents and Unique Client Code. | Do not forget to strike off blanks in your account opening and KYC. |
| 3. | Read the product / operational framework / timelines related to various Trading and Clearing & Settlement processes. | Do not submit an incomplete account opening and KYC form. |
| 4. | Receive all information about brokerage, fees and other charges levied. | Do not forget to inform any change in information linked to trading account and obtain confirmation of updation in the system. |
| 5. | Register your mobile number and email ID in your trading, demat and bank accounts to get regular alerts on your transactions. | Do not transfer funds, for the purposes of trading to anyone other than a stock broker. No payment should be made in name of employee of stock broker. |
| 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. | Do not ignore any emails / SMSs received with regards to trades done, from the Stock Exchange and raise a concern, if discrepancy is observed. |
| 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. | Do not opt for digital contracts, if not familiar with computers. |
| 8. | Receive funds and securities / commodities on time within 24 hours from pay-out. | Do not share trading password. |
| 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. | Do not fall prey to fixed / guaranteed returns schemes. |
| 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 90days). | Do not fall prey to fraudsters sending emails and SMSs luring to trade in stocks / securities promising huge profits. |
| 11. | In case of any grievances, approach stock broker or Stock Exchange or SEBI for getting the same resolved within prescribed timelines. | Do not follow herd mentality for investments. Seek expert and 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:
Timelines for complaint resolution process at Stock Exchanges against stock brokers
| S.No. | Type of Activity | Timelines for activity |
|---|---|---|
| 1. | Receipt of Complaint | Day of complaint (C Day). |
| 2. | Additional information sought from the investor, if any, and provisionally forwarded to stock broker. | C + 7 Working days. |
| 3. | Registration of the complaint and forwarding to the stock broker. | C+8 Working Days i.e. T day. |
| 4. | Amicable Resolution | T+15 Working Days. |
| 5. | Refer to Grievance Redressal Committee (GRC), in case of no amicable resolution. | T+16 Working Days. |
| 6. | Complete resolution process post GRC. | T + 30 Working Days. |
| 7. | In case where the GRC Member requires additional information, GRC order shall be completed within. | T + 45 Working Days. |
| 8. | Implementation of GRC Order. | 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. |
| 9. | In case the stock broker is aggrieved by the GRC order, will provide intention to avail arbitration | Within 7 days from receipt of order |
| 10. | If intention from stock broker is received and the GRC order amount is upto Rs.20 lakhs | 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 and Undertaking from the investor. |
| 11. | Stock Broker shall file for arbitration | Within 6 months from the date of GRC recommendation |
| 12. | In case the stock broker does not file for arbitration within 6 months | 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 stockbroker defaults:
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 systemof SEBI) @ https://scores.gov.in/scores/Welcome.html
INVESTOR CHARTER FOR DEPOSITORIES AND DEPOSITORY PARTICIPANTS (Annexure – A)
Vision
Towards making Indian Securities Market - Transparent, Efficient, & Investor friendly by providing safe, reliable, transparent and trusted record keeping platform for investors to hold and transfer securities in dematerialized form.
Mission
- To hold securities of investors in dematerialized form and facilitate its transfer, while ensuring safekeeping of securities and protecting interest of investors.
- To provide timely and accurate information to investors with regard to their holding and transfer of securities held by them.
- To provide the highest standards of investor education, investor awareness and timely services so as to enhance Investor Protection and create awareness about Investor Rights.
Details of business transacted by the Depository and Depository Participant (DP)
A Depository is an organization which holds securities of investors in electronic form. Depositories provide services to various market participants - Exchanges, Clearing Corporations, Depository Participants (DPs), Issuers and Investors in both primary as well as secondary markets. The depository carries out its activities through its agents which are known as Depository Participants (DP). Details available on the link.
Description of services provided by the Depository through Depository Participants (DPs) to investors
(1) Basic Services
| Sr. no. | Brief about the Activity / Service | Expected Timelines for processing by the DP after receipt of proper documents |
|---|---|---|
| 1. | Dematerialization of securities | 7 days |
| 2. | Rematerialization of securities | 7 days |
| 3. | Mutual Fund Conversion / Destatementization | 5 days |
| 4. | Re-conversion / Restatementisation of Mutual fund units | 7 days |
| 5. | Transmission of securities | 7 days |
| 6. | Registering pledge request | 15 days |
| 7. | Closure of demat account | 30 days |
| 8. | Settlement Instruction | Depositories to accept physical DIS for pay-in of securities up to 4 p.m. and DIS in electronic form up to 6 p.m. on T+1 day |
(2) Depositories provide special services like pledge, hypothecation, internet-based services etc. in addition to their core services and these include
| Sr. no. | Type of Activity / Service | Brief about the Activity / Service |
|---|---|---|
| 1. | Value Added Services | Depositories also provide value added services such as a. Basic Services Demat Account (BSDA) b. TPIN facility to authorise debits c. Transposition cum dematerialization link d. Distribution of cash and non-cash corporate benefits (Bonus, Rights, IPOs etc.), stock lending, demat of NSC / KVP, demat of warehouse receipts etc. |
| 2. | Consolidated Account statement (CAS) | CAS is issued 10 days from the end of the month (if there were transactions in the previous month) or half yearly (if no transactions). |
| 3. | Digitalization of services provided by the depositories | Depositories offer below technology solutions and e-facilities to their demat account holders through DPs: a. E-account opening: Details available on the link b. Online instructions for execution: Details available on the link - Easiest c. e-DIS / Demat Gateway: Details available on the link d. e-CAS facility: Details available on the link |
Details of Grievance Redressal Mechanism
(1) The Process of investor grievance redressal
| Sr. no. | Type of Activity / Service | Brief about the Activity / Service |
|---|---|---|
| 1. | Investor Complaint/Grievances | Investor can lodge complaint/ grievance against the Depository/DP in the following ways: a. Electronic mode - (i) SCORES (a web based centralized grievance redressal system of SEBI) (ii) Respective Depository’s web portal dedicated for the filing of compliant [link] (iii) Emails to designated email IDs of Depository [link] b. Offline mode The complaints/ grievances lodged directly with the Depository shall be resolved within 30 days. |
| 2. | Investor Grievance Redressal Committee of Depository | If no amicable resolution is arrived, then the Investor has the option to refer the complaint/ grievance to the Grievance Redressal Committee (GRC) of the Depository. Upon receipt of reference, the GRC will endeavor to resolve the complaint/ grievance by hearing the parties and examining the necessary information and documents. |
| 3. | Arbitration proceedings | The Investor may also avail the arbitration mechanism set out in the Byelaws and Business Rules/Operating Instructions of the Depository in relation to any grievance, or dispute relating to depository services. The arbitration reference shall be concluded by way of issue of an arbitral award within 4 months from the date of appointment of arbitrator(s). |
(2) For the Multi-level complaint resolution mechanism available at the Depositories please refer to [link]
Guidance pertaining to special circumstances related to market activities: Termination of the Depository Participant
| Sr. no. | Type of special circumstances | Timelines for the Activity/ Service |
|---|---|---|
| 1. | ▪ Depositories to terminate the participation in case a participant no longer meets the eligibility criteria and/or any other grounds as mentioned in the bye laws like suspension of trading member by the Stock Exchanges. ▪ Participant surrenders the participation by its own wish. |
Client will have a right to transfer all its securities to any other Participant of its choice without any charges for the transfer within 30 days from the date of intimation by way of letter/email. |
Dos and Don’ts for Investors
For Do’s and Don’ts please refer to the link
Rights of investors
For rights, please refer to the link
Responsibilities of Investors
For responsibilities, please refer to the link
INVESTOR CHARTER FOR RESEARCH ANALYST
Vision
Invest with knowledge & safety.
Mission
Every investor should be able to invest in right investment products based on their needs, manage and monitor them to meet their goals, access reports and enjoy financial wellness.
Details of business transacted by the Research Analyst with respect to the investors.
- To publish research report based on the research activities of the RA.
- To provide an independent unbiased view on securities.
- To offer unbiased recommendation, disclosing the financial interests in recommended securities.
- To provide research recommendation, based on analysis of publicly available information and known observations.
- To conduct audit annually.
Details of services provided to investors (No Indicative Timelines)
- Onboarding of Clients.
- Disclosure to Clients
- To distribute research reports and recommendations to the clients without discrimination.
- To maintain confidentiality w.r.t publication of the research report until made available in the public domain.
Details of grievance redressal mechanism and how to access it
In case of any grievance / complaint, an investor should approach the concerned research analyst and shall ensure that the grievance is resolved within 30 days.
If the investor’s complaint is not redressed satisfactorily, one may lodge a complaint with SEBI on SEBI’s SCORES portal which is a centralized web based complaints redressal system. SEBI takes up the complaints registered via SCORES with the concerned intermediary for timely redressal. SCORES facilitates tracking the status of the complaint.
With regard to physical complaints, investors may send their complaints to: Office of Investor Assistance and Education, Securities and Exchange Board of India, SEBI Bhavan. Plot No. C4-A, ‘G’ Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051.
Expectations from the investors (Responsibilities of investors)
| Do’s | Don’ts |
|---|---|
| Always deal with SEBI registered Research Analyst. | Do not provide funds for investment to the Research Analyst. |
| Ensure that the Research Analyst has a valid registration certificate. | Don’t fall prey to luring advertisements or market rumours. |
| Check for SEBI registration number. | Do not get attracted to limited period discount or other incentive, gifts, etc. offered by Research Analyst. |
| Please refer to the list of all SEBI registered Research Analysts which is available on SEBI website in the following link: (https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes &intmId=14) | Do not get attracted to limited period discount or other incentive, gifts, etc. offered by Research Analyst. |
| Always pay attention towards disclosures made in the research reports before investing. | |
| Pay your Research Analyst through banking channels only and maintain duly signed receipts mentioning the details of your payments. | |
| Before buying securities or applying in public offer, check for the research recommendation provided by your research Analyst. | |
| Ask all relevant questions and clear your doubts with your Research Analyst before acting on the recommendation. | |
| Inform SEBI about Research Analyst offering assured or guaranteed returns. |
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