DO’S & DON’T’S

DO’s & DON’Ts WHILE DEALING WITH BROKERS & AUTHORIZED PERSON

DO’s

Transact only through SEBI-recognized stock exchanges. Deal only through SEBI- registered Brokers/Authorized Person. You may check their SEBI registration certificate number from the list available on the Stock exchanges www.nseindia.com/www.bseindia.com/ www.mcx-sx.com and SEBI website www.sebi.gov.in.

• State clearly who will be placing orders on your behalf and give clear and unambiguous instructions to your Broker/ Authorized Person. Never give an open authority to Broker/ Authorized Person for placing trades on your behalf.
• Insist on client registration form to be signed by the Broker before commencing operations.
• Ensure that you read the agreement and risk disclosure document carefully before signing.
• Make sure that you sign on all the pages of the agreement and ensure that the Broker or an authorized representative, signs on all the pages of the agreement. Also, the agreement should be signed by the witnesses by giving their name and address.
• Insist on a contract note for each transaction and verify details in the contract note, immediately on receipt. If in doubt, crosscheck details of your trade available with the details on the exchange’s website.
• Insist on a bill for every settlement.
• Ensure that the Broker’s name, trade time and number, transaction price and Brokerage are shown distinctly on the contract note.
• Insist on the periodical statement of accounts.
• Issue cheques/drafts only in the trade name of the Broker. Don’t make any payment in cash to the stockbroker / Authorized Person.
• Ensure receipt of payment/ deliveries within 48 hours of payout.
• In case of disputes, file a written complaint to intermediary/ stock exchange/SEBI within a reasonable time. In case of disputes with the Authorized Person, inform the main Broker immediately.
• Familiarize yourself with the rules, regulations, and circulars issued by stock exchanges /SEBI. Keep track of your portfolio in your Demat account on a regular basis.
• Ensure that you have margin money before you buy. Ensure that you are holding securities before you sell. While dealing in the derivatives segment: o Be aware of the risk associated with your positions in the market/margin calls. o Collect/pay mark to market margins on your futures position on a daily basis from/to TM

DON’T’s

• Don’t deal with unregistered Brokers / Authorized Persons or other unregistered intermediaries.
• Don’t execute any document with any intermediary without fully understanding its terms and conditions. Don't leave the custody of your Demat
  Transaction Slip book in the hands of any Broker/Authorized Person.
• Don’t forgo obtaining all documents of transactions even if the Broker/Authorized Person is well known to you.
• Don’t do any off-market transaction or payment of funds to Authorized persons. All securities and fund transactions should be done only in the Broker’s account.
• Don’t share your Trading Id and Password with Broker/Authorized Person
• Don’t believe and invest in any assured/fixed or guaranteed income schemes.

PRIMARY MARKET

DO’s

• Read the Prospectus/Abridged Prospectus carefully, with special attention to:
  • Risk factors
  • Background of promoters
  • Company history
  • Outstanding litigations and defaults
  • Financial statements
  • Object of the issue
  • Basis of Issue price
  • Instructions for making an application
• In case of any doubts/problems, contact the compliance officer named in the offer document.
• In case you do not receive, within due period, the credit to demat account or refund of application money, lodge a complaint with the compliance officer of the issuer company and with the post issue lead manager.

DON’Ts

• Don’t be influenced by any implicit/explicit promise made by the issuer or anyone else.
• Don’t invest only based on the prevailing bull run of the market index or of scrips of other companies in the same industry or scripts of the issuer company/group companies.
• Don’t expect the price of the shares of the issuer company to necessarily go up upon listing, and forever.

ADDITIONAL DO’s & DON’Ts FOR SECONDARY MARKET

DO’s

• Before investing, please check about the credentials of the company, its management, fundamentals and recent announcements made by them and other disclosures made under various regulations.
• Adopt trading/investment strategies commensurate with your risk-bearing capacity as all investments carry some risk.
• Assess the risk-return profile of the investment as well as the liquidity and safety aspects before making your investment decision.
• Ensure that you read all the mandatory documents viz. Rights and Obligations, Risk Disclosure Document, Policy and Procedure document of intermediaries.
• Ensure that you fill the KYC form completely and strike off the blank fields in the KYC form.
• Participate and vote in general meeting personally or through a proxy.
• Deliver the shares/depository slip in case of sale and pay the money in case of purchase within the prescribed time.
• Scrutinize both the transactions and the holding statements that you receive from your DP.
• Handle Delivery Instruction Slips (DIS) Book issued by the DP carefully. Insist that the DIS numbers are pre-printed and your account number (Client ID) is pre-stamped.
• In case you are not transacting frequently, make use of the freezing facility provided in your demat account.
• Keep copies of all investment documents. Ask all relevant questions and clear your doubts before transacting.
• Please register your mobile number and email id with the stockbroker, to receive trade confirmation alerts/details of the transactions through SMS or email, by the end of the trading day, from the stock exchanges and Depositories.

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