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Do’s & Don’ts in Capital Market



  • 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, For BSE and For NSE and For SEBI
  • 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, commission, 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 documents executed by you from the stock broker free of charge.
  • in case you wish to execute the power of attorney (POA) in favor of the stock broker, authorizing it to operate your bank and demat account, please refer to the guidelines issued by SEBI / exchanges in these regard. TRANSACTIONS AND SETTLEMENTS.
  • The stock broker may issue electronic contract notes (ECN) if specifically authorised by you in writing. You should provide your e-mail 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 to the stock broker.
  • Make the payment 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/ demat account such a money or securities deposited and from which bank/demat account.
  • Note that facility of trade verification is available on the stock exchange’s website, where details of trade as mentioned in the contract note may be verified. Where trade details under website do not tally with the details mentioned in the contract note, immediately get in touch with the investor’s grievance cell of relevant stock exchange.
  • In case you have given specific authorization payout of funds or delivery of securities as the case may be, not be made to you within one working day of receipt from the exchange. Thus the stock broker may maintain a running account for the subject to following conditions:
    • Such authorization from you shall be dated, signed by you only and contains the clause that you may revoke the same at any time.
    • The actual settlement of funds and securities shall be done by the stock broker, atleast 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 account containing an extract from the client’s 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.
    • On the date of settlement, the stock broker may retain the requisite securities/ funds towards outstanding. Obligation may also retain the funds expected to be required to meet the derivatives margin obligation 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 of and for next day’s business, he may retain funds/securities/margin to the extent of values of transactions executed on the day of such a settlement in the cash market.
    • You need to bring any dispute arising from the statement of account or settlement so made to the notice of then stock broker in writing preferably within 7 working days from the date of receipt of 22 funds/securities or statement, as the case may be. In case of dispute, refer the matter in writing to Investors Grievance cell of the relevant Stock exchanges without delay
  • In case you have not opted for maintaining a running account and payout of funds/ securities is not received on the next working day of the receipt of payout f4rom 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’ grievances cell of the relevant stock exchange.
  • Please register your mobile no. and e-mail ID with the stock broker to receive trade confirmation alerts, details of the transaction through SMS or e-mail, by the end of the trading day for 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 ‘transaction executed on the trading system’ of stock exchange, from the investors. Ensure that you lodge a claim with relevant stock exchanges within the stipulate 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 default or the stock brokers’ insolvency or bankruptcy and the extent to which you may recover such money and/or securities may be governed by the bye-laws and the regulations of the relevant stock exchanges where the trade was executed and the scheme of investors’ protection fund in force from time to time. DISPUTES/COMPLAINTS.
  • Please note that the details of the arbitration processing, penal action against the broker and the investor complaints against the stock broker are displayed on the website of the relevant stock exchange.
  • In case your issue/problem/grievance is not being sorted out by concerned 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.

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