Dear Professionals/Investors

There are some Rights, Do’s and Don’ts of investors while dealing in security markets.

Rights of Investors

1. To receive all benefits/ material information declared for the investors by the Company.

2. Prompt services from the Company such as transfers, Sub-divisions and consolidation of holdings in the Company.

3. As an equity holder have a right to subscribe to further issue of capital by the Company.

4. Shares and /or Debentures of Joint 0.25 per stock companies share/ debenture or 2.5% of the contract price per share/ Debenture whichever is higher.

5. Receipt of the Contract Note from the broker in the specified format showing transaction price, brokerage, Service Tax and STT, separately

6. Expect delivery of shares purchased/value of shares sold within 24 hours from pay-out.

Approach nearest Regional Investor Service Centers of BSE/NSE.

The Complaint against trading members of the Exchange or Applications for Arbitration should be filed at the nearest Regional Investor Service Centre referred, within which the most recent address / registered office address of the constituent, as duly communicated in writing to the trading member in accordance with law, is located. The hearings shall be held in the concerned Regional Investor Service Centre in which the Applicant had duly filed the Complaints / Application for Arbitration.

Do’s

1. Always deal with the market intermediaries registered with SEBI / stock exchanges.

2. Collect photocopies of all documents executed for registration as a client, immediately on its execution. Ensure that the documents or forms for registration as Client are fully filled in.

3. Give clear and unambiguous instructions to your broker / agent / depository participant.

4. Always insist on contract notes from your broker. In case of doubt in respect of the transactions, verify the genuineness of the same on the BSE/NSE website.

5. Always settle the dues through the normal banking channels with the market intermediaries.

6. Before placing an order with the market intermediaries, please check about the credentials of the companies, its management, fundamentals and recent announcements made by them and various other disclosures made under various regulations. The sources of information are the websites of Exchanges and companies, databases of data vendor, business magazines etc.

7. Adopt trading / investment strategies commensurate with your risk-bearing capacity as all investments carry some risk, the degree of which varies according to the investment strategy adopted.

8. Carry out due diligence before registering as client with any intermediary. Carefully read and understand the contents stated in the Risk Disclosure Document, which forms part of the investor registration requirement for dealing through brokers.

9. Be cautious about stocks which show a sudden spurt in price or trading activity, especially low price stocks.

10. There are no guaranteed returns on investment in the stock market .

11. Always keep copies of all investment documentation (e.g. application forms, acknowledgements slips, contract notes).

12. Always keep copies of documents you are sending to companies, Trading Member, Registrar and Transfer Agent, etc.

12. Send important documents by a reliable mode (preferably through registered post) to ensure delivery.

13. Ensure that you have money before you buy.

14. Ensure that you are holding securities before you sell.

15. Follow up diligently and promptly e.g. If you do not receive the required documentation within a reasonable time, contact the concerned person; i.e. the Trading Member, company etc., immediately.

16. Mention clearly whether you want to transact in physical mode or in demat mode.

17. Lodge your Arbitration Application against the Trading Member, at the concerned Regional Investor Service Centre, by confirming geographical jurisdiction. Please use for the purpose, your address as intimated to your Trading Member by following due process of law. The details of geographical jurisdiction of each Regional Investor Service Centre are also available on the Contract Note. The period consumed in redressal of complaint thru IGRC services will not be considered while measuring period of ‘limitation’ in filing arbitration application provided the complaint and / or arbitration application is / are filed at the concerned Regional Investor Service Centre.

18. Lodge your complaint against a company listed on BSE/NSE, at the concerned Regional Investor Service Centre, by confirming geographical jurisdiction. Please use your address for deciding the geographical jurisdiction. This will enable to process the complaint expeditiously.

Don’ts :

1. Don’t deal with unregistered brokers / sub – brokers, or other unregistered intermediaries.

2. Don’t execute any documents with any intermediary without fully understanding its terms and conditions.

3. Don’t file your arbitration application against trading member, in the Regional Investor Service Centre having no geographical jurisdiction over the matter. Please use for the purpose, your address as intimated to your Trading Member by following due process of law

4. The Exchange redresses investors’ complaints thru arbitration and IGRC mechanism, which are quasi-judicial in nature. The period consumed in redressal of complaint thru IGRC will not be considered while measuring period of ‘limitation’ in filing arbitration application provided the complaint is filed at the concerned Regional Investor Service Centre.

5. Don’t file your grievance /s against companies listed on BSE, in the Regional Investor Service Centre having no geographical jurisdiction over the matter, for its expeditious redressal.Please use your address for deciding the geographical jurisdiction.

6. Don’t deal based on rumours or ‘tips’.

7. Don’t fall prey to promises of guaranteed returns.

8. Don’t get misled by companies showing approvals / registrations from Government agencies as the approvals could be for certain other purposes and not for the securities you are buying.

9. Don’t leave the custody of your Demat Transaction slip book in the hands of any intermediary.

10. Don’t get carried away with advertisements about the financial performance of companies in print and electronic media.

11. Don’t blindly follow media reports on corporate developments, as some of these could be misleading.

12. Don’t blindly imitate investment decisions of others who may have profited from their investment decisions.

13. Don’t forgo obtaining all documents of transactions, in good faith even from people whom you know.

14. Don’t forget to take note of the risks involved in an investment.

15. Don’t get misled by guarantees of repayment of your investments through post-dated cheques.

16. Don’t hesitate to approach concerned persons and then the appropriate authorities.

17. Don’t get swayed by promises of high returns.

Author Bio

Qualification: CS
Company: N/A
Location: Jaipur, Rajasthan, IN
Member Since: 26 Sep 2017 | Total Posts: 25
CS Annu Sharma is a Commerce Graduate and an Associate Member of the Institute of Company Secretaries of India (ICSI). She has cumulative experience of more than 3 years with Listed Company, CA and CS firms. She authored various articles on the topics of Corporate Laws, Securities Laws, DGFT, I View Full Profile

My Published Posts

More Under SEBI

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

June 2021
M T W T F S S
 123456
78910111213
14151617181920
21222324252627
282930