Investor Grievance

Annexure A

 

  1. Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
  2. Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.
  3. Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link:https://www.nseindia.com/invest/about-defaulter-section.
  4. Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.
  5. Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.
  6. Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.
  7. Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.
  8. Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.”
Issued in the interest of Investors 

 

 
a) Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.
 
b) Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.
 
c) Pay 20% upfront margin of the transaction value to trade in cash market segment.
 
d) Investors may please refer to the Exchange’s Frequently Asked Questions (FAQs) issued vide circular reference NSE/INSP/45191 dated July 31, 2020 and NSE/INSP/45534 dated August 31, 2020 and other guidelines issued from time to time in this regard.
 
e) Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month (in case of transactions in the previous month) or every 6 months (in case there are no transactions), as the case may be.
 
d) “No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor’s account.”
 
Issued in the interest of Investors
 
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.

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.
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.
  • Settlement of client’s funds.
  • Intimation of securities held in Client Unpaid Securities Account (CUSA) Account.
  • Issuance of retention statement of funds.
  • 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. exchange circulars.
  • Redressal of Investor’s grievances.
Rights of Investors

 

  • Ask 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.
  • Receive complete information about the risks, obligations, and costs of any investment before investing.
  • Receive recommendations consistent with your financial needs and investment objectives.
  • Receive a copy of all completed account forms and agreements.
  • Receive account statements that are accurate and understandable.
  • Understand the terms and conditions of transactions you undertake.
  • Access your funds in a timely manner and receive information about any restrictions or limitations on access.
  • Receive complete information about maintenance or service charges, transaction or redemption fees, and penalties.
  • Discuss your grievances with compliance officer of the firm and receive prompt attention to and fair consideration of your concerns.
Various activities of Stock Brokers with timelines
S.No.ActivitiesExpected Timelines
1KYC entered into KRA System and CKYCR10 days of account opening
2Client OnboardingImmediate, but not later than one week
3Order executionImmediate on receipt of order, but not later than the same day
4Allocation of Unique Client CodeBefore trading
5Copy of duly completed Client Registration Documents to clients7 days from the date of upload of Unique Client Code to the Exchange by the trading member
6Issuance of contract notes24 hours of execution of trades
7Collection of upfront margin from clientBefore initiation of trade
8Issuance of intimations regarding other margin due paymentsAt the end of the T day
9Settlement of client funds30 days / 90 days for running account settlement (RAS) as per the preference of client.If consent not given for RAS – within 24 hours of pay-out
10‘Statement of Accounts’ for Funds, Securities and CommoditiesWeekly basis (Within four trading days of following week)
11Issuance of retention statement of funds/commodities5 days from the date of settlement
12Issuance of Annual Global Statement30 days from the end of the financial year
13Investor grievances redressal30 days from the receipt of the complaint
DOs and DON’Ts for Investors
S.No.DOsDON’Ts
1Read all documents and conditions being agreed before signing the account opening form.Do not deal with unregistered stock broker.
2Receive a copy of KYC, copy of account opening documents and Unique Client Code.Do not forget to strike off blanks in your account opening and KYC.
3Read the product / operational framework / timelines related to various Trading and Clearing & Settlement processes.Do not submit an incomplete account opening and KYC form.
4Receive all information about brokerage, fees and other charges levied.Do not forget to inform any change in information linked to trading account and obtain confirmation of updation in the system.
5Register your mobile number and email ID in your trading, demat and bank accounts to get regular alerts on your transactions.Do not transfer funds, for the purposes of trading to anyone other than a stock broker. No payment should be made in name of employee of stock broker.
6If executed, receive a copy of Power of Attorney. However, Power of Attorney is not a mandatory requirement as per SEBI / Stock Exchanges. Before granting Power of Attorney, carefully examine the scope and implications of powers being granted.Do not ignore any emails / SMSs received with regards to trades done, from the Stock Exchange and raise a concern, if discrepancy is observed.
7Receive contract notes for trades executed, showing transaction price, brokerage, GST and STT etc. as applicable, separately, within 24 hours of execution of trades.Do not ignore any emails / SMSs received with regards to trades done, from the Stock Exchange and raise a concern, if discrepancy is observed.
8Receive funds and securities / commodities on time within 24 hours from pay-out.Do not share trading password.
9Verify details of trades, contract notes and statement of account and approach relevant authority for any discrepancies. Verify trade details on the Exchange websites from the trade verification facility provided by the Exchanges.Do not fall prey to fixed / guaranteed returns schemes.
10Receive statement of accounts periodically. If opted for running account settlement, account has to be settled by the stock broker as per the option given by the client (30 or 90 days).Do not fall prey to fraudsters sending emails and SMSs luring to trade in stocks / securities promising huge profits.
11In case of any grievances, approach stock broker or Stock Exchange or SEBI for getting the same resolved within prescribed timelines.Do not follow herd mentality for investments. Seek expert and professional advice for your investments.
Grievance Redressal Mechanism

Level 1 – Approach the Stock Broker at the designated Investor Grievance e-mail ID of the stock broker. The Stock Broker will strive to redress the grievance immediately, but not later than 30 days of the receipt of the grievance.
Level 2 – Approach the Stock Exchange using the grievance mechanism mentioned at the website of the respective exchange. Complaints Resolution Process at Stock Exchange explained graphically:

 

Timelines for complaint resolution process at Stock Exchanges against stock brokers
S.No.Type of ActivityTimelines for activity
1Receipt of ComplaintDay of complaint (C Day).
2Additional information sought from the investor, if any, and provisionally forwarded to stock broker.C + 7 Working days.
3Registration of the complaint and forwarding to the stock broker.C+8 Working Days i.e. T day.
4Amicable Resolution.T+15 Working Days.
5Refer to Grievance Redressal Committee (GRC), in case of no amicable resolution.T+16 Working Days.
6Complete resolution process post GRC.T + 30 Working Days.
7In case where the GRC Member requires additional information, GRC order shall be completed within.T + 45 Working Days.
8Implementation of GRC Order.On receipt of GRC Order, if the order is in favour of the investor, debit the funds of the stock broker. Order for debit is issued immediately or as per the directions given in GRC order.
9In case the stock broker is aggrieved by the GRC order, will provide intention to avail arbitrationWithin 7 days from receipt of order
10If intention from stock broker is received and the GRC order amount is upto Rs.20 lakhsInvestor is eligible for interim relief from Investor Protection Fund (IPF).The interim relief will be 50% of the GRC order amount or Rs.2 lakhs whichever is less. The same shall be provided after obtaining an Undertaking from the investor.
11Stock Broker shall file for arbitrationWithin 6 months from the date of GRC recommendation
12In case the stock broker does not file for arbitration within 6 monthsThe GRC order amount shall be released tothe investor after adjusting the amount released as interim relief, if any.
Handling of Investor’s claims / complaints in case of default of a Trading Member / Clearing Member (TM/CM)

 

Default of TM/CM
    Following steps are carried out by Stock Exchange for benefit of investor, in case stock broker defaults:
  • Circular is issued to inform about declaration of Stock Broker as Defaulter.
  • Information of defaulter stock broker is disseminated on Stock Exchange website.
  • Public Notice is issued informing declaration of a stock broker as defaulter and inviting claims within specified period.
  • Intimation to clients of defaulter stock brokers via emails and SMS for facilitating lodging of claims within the specified period.
    Following information is available on Stock Exchange website for information of investors:
  • Norms for eligibility of claims for compensation from IPF.
  • Claim form for lodging claim against defaulter stock broker.
  • FAQ on processing of investors’ claims against Defaulter stock broker.
  • Provision to check online status of client’s claim.

Level 3 – The complaint not redressed at Stock Broker / Stock Exchange level, may be lodged with SEBI on SCORES (a web based centralized grievance redressal system of SEBI) @https://scores.gov.in/scores/Welcome.html
Click here to view SEBI Circular

 

1. Vision:

Towards making Indian Securities Market – Transparent, Efficient, & Investor friendly by providing safe, reliable, transparent and trusted record keeping platform for investors to hold and transfer securities in dematerialized form.

2. Mission

  • To hold securities of investors in dematerialised form and facilitate its transfer, while ensuring safekeeping of securities and protecting interest of investors.

  • To provide timely and accurate information to investors with regard to their holding and transfer of securities held by them.

  • To provide the highest standards of investor education, investor awareness and timely services so as to enhance Investor Protection and create awareness about Investor Rights.

3. Details of business transacted by the Depository and Depository Participant (DP)

A Depository is an organization which holds securities of investors in electronic form. Depositories provide services to various market participants – Exchanges, Clearing Corporations, Depository Participants (DPs), Issuers and Investors in both primary as well as secondary markets. The depository carries out its activities through its agents which are known as Depository Participants (DP). Details available on the link https://www.cdslindia.com/DP/dplist.aspx / https://nsdl.co.in/dpsch.php

4. Description of services provided by the Depository through Depository Participants (DP) to investors

(1) Basic Services

 

Sr.No.Brief about the Activity / ServiceExpected Timelines for processing by the DP after receipt of proper documents
1Dematerialization of securities7 days
2Rematerialization of securities7 days
3Mutual Fund Conversion / Destatementization5 days
4Re-conversion / Restatementisation of Mutual fund units7 days
5Transmission of securities7 days
6Registering pledge request15 days
7Closure of demat account30 days
8Settlement InstructionDepositories to accept physical DIS for pay-in of securities upto 4 p.m and DIS in electronic form upto 6 p.m on T+1 day

(2) Depositories provide special services like pledge, hypothecation, internet based services etc. in addition to their core services and these include

 

Sr.No.Type of Activity /ServiceBrief about the Activity / Service
1Value Added Services

Depositories also provide value added services such as

  1. Basic Services Demat Account (BSDA)
  2. Transposition cum dematerialization
  3. Linkages with Clearing System
  4. Distribution of cash and non-cash corporate benefits.
2Consolidated Account statement (CAS)CAS is issued 10 days from the end of the month (if there were transactions in the previous month) or half yearly (if no transactions).
3Digitalization of services provided by the depositories

Depositories offer below technology solutions and e-facilities to their demat account holders through DPs:

  1. E-account opening
  2. Online instructions for execution
  3. e-DIS / Demat Gateway
  4. e-CAS facility
  5. Miscellaneous services

5. Details of Grievance Redressal Mechanism

(1) The Process of investor grievance redressal

 

Sr.No.  
1Investor Complaint/ Grievances

Investor can lodge complaint/ grievance against the Depository/DP in the following ways:

a. Electronic mode –

(i) SCORES (a web based centralized grievance redressal system of SEBI)

    • (ii) Respective Depository’s web portal dedicated for the filing of compliant 

NSDL Portal

    •  / 

CDSL Portal

    • (iii) Emails to designated email IDs of Depository 

complaints@cdslindia.com

    •  / 

relations@nsdl.co.inThe complaints/ grievances lodged directly with the Depository shall be resolved within 30 days.

2Investor Grievance Redressal Committee of DepositoryIf no amicable resolution is arrived, then the Investor has the option to refer the complaint/ grievance to the Grievance Redressal Committee (GRC) of the Depository. Upon receipt of reference, the GRC will endeavor to resolve the complaint/ grievance by hearing the parties, and examining the necessary information and documents.
3Arbitration proceedingsThe Investor may also avail the arbitration mechanism set out in the Byelaws and Business Rules/Operating Instructions of the Depository in relation to any grievance, or dispute relating to depository services. The arbitration reference shall be concluded by way of issue of an arbitral award within 4 months from the date of appointment of arbitrator(s).

(2) For the Multi-level complaint resolution mechanism available at the Depositories

 

6. Guidance pertaining to special circumstances related to market activities: Termination of the Depository Participant

 

Sr.No.Type of special circumstancesTimelines for the Activity/ Service
1
  • Depositories to terminate the participation in case a participant no longer meets the eligibility criteria and/or any other grounds as mentioned in the bye laws like suspension of trading member by the Stock Exchanges.
  • Participant surrenders the participation by its own wish.
Client will have a right to transfer all its securities to any other Participant of its choice without any charges for the transfer within 30 days from the date of intimation by way of letter/email.

Annexure A1

ONLINE DISPUTE RESOLUTION (ODR)