EXCHANGE DO AND DONTS

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GUIDANCE NOTE - DO’s AND DON’Ts FOR TRADING ON THE EXCHANGE(S) FOR
    INVESTORS

    BEFORE YOU BEGIN TO TRADE

•   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
    www.exchange.com and SEBI website www.sebi.gov.in
•   Ensure that you fill the KYC form completely and strike off the blank fields in the KYC form.
•   Ensure that you have read all the mandatory documents viz. Rights and Obligations, Risk Disclosure
    Document, Policy and Procedure document of the stock broker.
•   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 between you and the stock broker cannot be changed
    without your consent.
•   Get a clear idea about all brokerage, commissions, fees and other charges levied by the broker on
    you for trading and the relevant provisions/ guidelines specified by SEBI / Stock exchanges.
•   Obtain a copy of all the documents executed by you from the stock broker free of charge.
•   In case you wish to execute Power of Attorney (POA) in favour of the Stock broker, authorizing it to
    operate your bank and demat account, please refer to the guidelines issued by SEBI / Exchanges in
    this regard.

    TRANSACTIONS AND SETTLEMENTS

•   The stock broker may issue electronic contract notes (ECN) if specifically authorized by you in
    writing. You should provide your email id to the stock broker for the same. Don’t opt for ECN if you
    are not familiar with computers.
•   Don’t share your internet trading account’s password with anyone.
•   Don’t make any payment in cash to the stock broker.
•   Make the payments by account payee cheque in favour of the stock broker. Don’t issue cheques in
    the name of sub-broker. Ensure that you have a documentary proof of your payment / deposit of
    securities with the stock broker, stating date, scrip, quantity, towards which bank / demat account
    such money or securities deposited and from which bank / demat account.
•   Note that facility of Trade Verification is available on stock exchanges’ websites, where details of
    trade as mentioned in the contract note may be verified. Where trade details on the website do not
    tally with the details mentioned in the contract note, immediately get in touch with the Investors
    Grievance Cell of the relevant Stock exchange.
•   In case you have given specific authorization for maintaining running account, payout of funds or
    delivery of securities (as the case may be), may not be made to you within one working day from the
    receipt of payout from the Exchange. Thus, the stock broker shall maintain running account for you
    subject to the following conditions:
o   Such authorization from you shall be dated, signed by you only and contains the clause that you may
    revoke the same at any time.
o   The actual settlement of funds and securities shall be done by the stock broker, at least once in a
    calendar quarter or month, depending on your preference. While settling the account, the stock
    broker shall send to you a ‘statement of accounts’ containing an extract from the client ledger for
    funds and an extract from the register of securities displaying all the receipts / deliveries of funds and
    securities. The statement shall also explain the retention of funds and securities and the details of the
    pledged shares, if any.
o   On the date of settlement, the stock broker may retain the requisite securities / funds towards
    outstanding obligations and may also retain the funds expected to be required to meet derivatives
    margin obligations for next 5 trading days, calculated in the manner specified by the exchanges. In
    respect of cash market transactions, the stock broker may retain entire pay-in obligation of funds and
    securities due from clients as on date of settlement and for next day’s business, he may retain funds /
    securities / margin to the extent of value of transactions executed on the day of such settlement in the
    cash market.
o   You need to bring any dispute arising from the statement of account or settlement so made to the
    notice of the stock broker in writing preferably within 7 (seven) working days from the date of
    receipt of funds / securities or statement, as the case may be. In case of dispute, refer the matter in
    writing to the Investors Grievance Cell of the relevant Stock exchanges without delay.
•   In case you have not opted for maintaining running account and pay-out of funds / securities is not
    received on the next working day of the receipt of payout from the exchanges, please refer the matter
    to the stock broker. In case there is dispute, ensure that you lodge a complaint in writing immediately
    with the Investors Grievance Cell of the relevant Stock exchange.
•   Please register your mobile number and email id with the stock broker, to receive trade confirmation
    alerts / details of the transactions through SMS or email, by the end of the trading day, from the
    stock exchanges.

    IN CASE OF TERMINATION OF TRADING MEMBERSHIP

•   In case, a stock broker surrenders his membership, is expelled from membership or declared a
    defaulter; Stock exchanges gives a public notice inviting claims relating to only the "transactions
    executed on the trading system" of Stock exchange, from the investors. Ensure that you lodge a
    claim with the relevant Stock exchanges within the stipulated period and with the supporting
    documents.
•   Familiarize yourself with the protection accorded to the money and / or securities you may deposit
    with your stock broker, particularly in the event of a default or the stock broker’s insolvency or
    bankruptcy and the extent to which you may recover such money and / or securities may be
    governed by the Bye-laws and Regulations of the relevant Stock exchange where the trade was
    executed and the scheme of the Investors’ Protection Fund in force from time to time.

    DISPUTES / COMPLAINTS

•   Please note that the details of the arbitration proceedings, penal action against the brokers and
    investor complaints against the stock brokers are displayed on the website of the relevant Stock
    exchange.
•   In case your issue / problem / grievance is not being sorted out by concerned stock broker/sub-broker
    then you may take up the matter with the concerned Stock exchange. If you are not satisfied with the
    resolution of your complaint then you can escalate the matter to SEBI.
•   Note that all the stock broker / sub-brokers have been mandated by SEBI to designate an e-mail ID
    of the grievance redressal division / compliance officer exclusively for the purpose of registering
    complaints.