Before Open A/c in Broking Co.: KYC: AS Chakravarthy NCFM Ameerpet
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Before opening ‘Trading and Demat account’ in any Broking company, SEBI has advised the Precautions to Investors, in the form of “Know your client (KYC)”. These are as given below
- Deal only with SEBI registered brokers/sub-brokers and verify that the broker/sub-broker has a valid SEBI registration certificate.
- State clearly who will be placing orders on your behalf and give clear and unambiguous instructions to your broker/ sub-broker.
- Insist on client registration form to be signed by the broker before commencing operations.
- Enter into an agreement with your broker/ sub-broker setting out terms and conditions clearly.
- 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 valid contract note/ confirmation memo for trades done within 24 hours of the transaction.
- Sign the duplicate contract note/ confirmation memo to be kept with the broker once you receive the original.
- 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 periodical statement of accounts.
- Issue cheques/drafts only in the trade name of the broker.
- Ensure receipt of payment/ deliveries within 4hours of payout.
- In case of disputes, file written complaint to intermediary/ stock exchange/SEBI within a reasonable time.
- In case of disputes with the sub-broker, 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 money before you buy.
- Ensure that you are holding securities before you sell.
- Don’t deal with unregistered brokers / sub – brokers 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/sub-broker.
- Don’t forgo obtaining all documents of transactions even if the broker/sub-broker is well known to you.
Sources : NSEIL (National Stock Exchange of India Ltd.,)
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Keywords: KYC, Demat, Brokser, Stock Market, Technical Analysis Course in Hyderabad, AS Chakravarthy NCFM Academy Hyderabad.
Source : National Stock Exchange of India Ltd