Annexure A
Investor Charter – Stock Brokers
👁️ 1. VISION
To follow highest standards of ethics and compliances while facilitating the trading by clients in securities in a fair and transparent manner, so as to contribute in creation of wealth for investors.
🎯 2. 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.
- To ensure confidentiality of information shared by investors unless required for legal obligations or with specific consent.
3. 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.
Periodic Settlement of client’s funds.
Issuance of retention statement of funds at the time of settlement.
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. relevant MII circulars.
Provide a copy of Rights & Obligations document to the client.
Communicating Most Important terms and Conditions (MITC) to the client.
Redressal of Investor’s grievances.
4. Rights of Investors
Investors have the right to:
- 1Ask 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.
- 2Receive complete information about the risks, obligations, and costs of any investment before investing.
- 3Receive a copy of all completed account forms and rights & obligation document.
- 4Receive a copy of ‘Most Important Terms & Conditions’ (MITC).
- 5Receive account statements that are accurate and understandable.
- 6Understand the terms and conditions of transactions you undertake.
- 7Access your funds in a prescribed manner and receive information about any restrictions or limitations on access.
- 8Receive complete information about maintenance or service charges, transaction or redemption fees, and penalties in form of tariff sheet.
- 9Discuss your grievances with compliance officer / compliance team / dedicated grievance redressal team of the firm and receive prompt attention and fair consideration.
- 10Close your zero balance accounts online with minimal documentation.
- 11Get the copies of all policies (including MITC) of the broker.
- 12Not be discriminated against in terms of services offered to equivalent clients.
- 13Get only those advertisement materials from the broker which adhere to Code of Advertisement norms.
- 14In case of broker defaults, be compensated from the Exchange Investor Protection Fund as per norms.
- 15Trade in derivatives after submission of relevant financial documents subject to due diligence.
- 16Get warnings on the trading systems while placing orders in securities where surveillance measures are in place.
- 17Get access to products and services in a suitable manner even if differently abled.
- 18Get access to educational materials of the MIIs and brokers.
- 19Get access to all the exchanges of a particular segment you wish to deal with unless opted out.
- 20Deal with one or more stockbrokers of your choice without compulsion of minimum business.
- 21Have access to the escalation matrix for communication with the broker.
- 22Not be bound by any clause prescribed by the Brokers which are contravening the Regulatory provisions.
5. Activities with Timelines
| Activity | Expected Timeline |
|---|---|
| KYC entered into KRA System and CKYCR | 3 working days of account opening |
| Client Onboarding | Immediate, but not later than one week |
| Order execution | Immediate on receipt of order, but not later than the same day |
| Allocation of Unique Client Code | Before trading |
| Copy of duly completed Client Registration Documents to clients | 7 days from the date of upload of UCC to the Exchange |
| Issuance of contract notes | 24 hours of execution of trades |
| Collection of upfront margin from client | Before initiation of trade |
| Issuance of intimations regarding other margin due payments | At the end of the T day |
| Settlement of client funds | First Friday/Saturday of the month / quarter as per Exchange schedule |
| ‘Statement of Accounts’ for Funds, Securities and Commodities | Monthly basis |
| Issuance of retention statement of funds/commodities | 5 days from the date of settlement |
| Issuance of Annual Global Statement | 30 days from the end of the financial year |
| Investor grievances redressal | 21 calendar days from the receipt of the complaint |
6. Risk disclosures 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
7. DOs and DON'Ts for Investors
✅ DOs
- •Read all documents and conditions being agreed before signing the account opening form.
- •Receive a copy of KYC, copy of account opening documents and Unique Client Code.
- •Read the product / operational framework / timelines related to various Trading and Clearing & Settlement processes.
- •Receive all information about brokerage, fees and other charges levied.
- •Register your mobile number and email ID in your trading, demat and bank accounts to get regular alerts.
- •If executed, receive a copy of Demat Debit and Pledge Instruction (DDPI). Carefully examine scope before granting.
- •Receive contract notes for trades executed within 24 hours.
- •Receive funds and securities/commodities on time.
- •Verify details of trades, contract notes and statement of account and approach relevant authority for discrepancies.
- •Receive statement of accounts periodically.
- •In case of grievances, approach stock broker or Stock Exchange or SEBI.
- •Retain documents for trading activity as it helps in resolving disputes.
❌ DON'Ts
- •Do not deal with unregistered stock broker.
- •Do not forget to strike off blanks in your account opening and KYC.
- •Do not submit an incomplete account opening and KYC form.
- •Do not forget to inform any change in information linked to trading account.
- •Do not transfer funds for trading to anyone other than a stock broker (no employee payments).
- •Do not ignore any emails / SMSs received with regards to trades done.
- •Do not opt for digital contracts if not familiar with computers.
- •Do not share trading password.
- •Do not fall prey to fixed / guaranteed returns schemes.
- •Do not fall prey to fraudsters sending emails/SMSs promising huge profits.
- •Do not follow herd mentality. Seek expert and professional advice.
Additionally, Investors may refer to Dos and Don’ts issued by MIIs on their respective websites from time to time.
8. Grievance Redressal Mechanism
Level 1: With Stock Broker
Investor can lodge complaint/grievance at the designated Investor Grievance e-mail ID of the stock broker.
Resolution Timeline: Immediately, but not later than 21 days.
Level 2: With Stock Exchanges
i. SCORES 2.0: (https://scores.sebi.gov.in)
- First review by Designated body/Exchange
- Second review by SEBI
ii. Emails: To designated email IDs of Exchange
Level 3: Online Dispute Resolution (ODR)
If unsatisfied with Market Participant resolution, file complaint on SMARTODR platform for Conciliation and Arbitration.
1Approach Market Participant first.
2If unsatisfied, escalate to SEBI SCORES or SMARTODR portal.
3SMARTODR: MII reviews and endeavors to resolve within 21 days.
4If unresolved, matter referred for Conciliation (21 days + 10 days extension).
5If conciliation fails, matter referred for Arbitration.
6Arbitration concluded within 30 days (+30 days extension).
9. In Case of Default of Trading Member (TM/CM)
Steps by Stock Exchange:
- Circular issued declaring Stock Broker as Defaulter.
- Information disseminated on Exchange website.
- Public Notice issued inviting claims.
- Intimation to clients via emails and SMS for lodging claims.
Information available on Exchange Website:
- Norms for eligibility of claims from IPF.
- Claim form and FAQs.
- Online status check of claim.
- SOP for handling claims.
- List of Defaulter/Expelled members.
