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DO’s & Don’ts FOR INVESTORS
ISSUE OF SECURITIES
INVESTING IN DERIVATIVES
DEALING WITH BROKERS & SUB-BROKERS
DEALING IN SECURITIES
INVESTING IN MUTUAL FUNDS
ISSUE OF SECURITIESTop
DO’S
  • Read the Prospectus/ Abridged Prospectus and carefully note
  • Risk factors pertaining to the issue.
  • Outstanding litigations and defaults, if any.
  • Financials of the issuer.
  • Object of the issue.
  • Company history.
  • Background of promoters
  • Instructions before making application
  • In case of any doubt/problem, contact the compliance officer named in the offer document.
  • In case you do not receive physical certificates/credit to demat account or application money refund, lodge a complaint with compliance officer of issuer company and post issue lead manager as stated in the offer document.
DON’TS
  • Do not fall prey to market rumours.
  • Do not go by any implicit/explicit promise made by the issuer or any one else.
  • Do not invest based on bull run of the market index/scrips of other companies in same industry/issuer company.
  • Do not bank upon the price of the shares of the issuer company to go up in the short run.
INVESTING IN DERIVATIVESTop
DO’S
  • Go through all rules, regulations, bye-laws and disclosures made by the Exchanges.
  • Trade only through - Trading Member (TM) registered with SEBI or authorised person of TM registered with the Exchange.
  • While dealing with an authorised person, ensure that the contract note has been issued by the TM of the authorized person only.
  • While dealing with an authorized person, pay the brokerage / payments/margins etc. to the TM only.
  • Ensure that for every executed trade you receive duly signed contract note from your TM highlighting the details of the trade along with your unique client-id.
  • Obtain receipt for collateral deposited with Trading Member (TM) towards margin.
  • Go through details of Client-Trading Member Agreement.
  • Know your rights and duties vis-à-vis those of TM/ Clearing Member.
  • Be aware of the risk associated with your positions in the market and margin calls on them.
  • Collect / pay mark to market margins on your futures position on a daily basis from / to your Trading member.
DON’TS
  • Do not start trading before reading and understanding the Risk Disclosure Documents
  • Do not trade on any product without knowing the risk and rewards associated with it
DEALING WITH BROKERS & SUB-BROKERSTop
DO’S
  • Enter into an agreement with your broker or sub-broker setting out terms and conditions clearly.
  • Insist on contract note/ confirmation memo for trades done each dayInsist on bill for every settlement.Ensure that 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 in trade name of the intermediary only.Ensure receipt of payment/ deliveries within 48 hours of payoutIn case of disputes, file written complaint to intermediary/ Stock Exchange/SEBI within a reasonable time.In case of sub-broker disputes, inform the main broker about the dispute within 6 months.
  • Familiarise yourself with the rules, regulations and circulars issued by Stock Exchanges/SEBI before carrying out any transaction
DON’TS
  • Do not deal with unregistered intermediaries
  • Do not pay more than the approved brokerage to the intermediary.
  • Do not undertake deals for others.
  • Do not neglect to set out in writing, orders for higher value given over phone.
  • Do not sign blank Delivery instruction slip(s) while meeting security payin obligation
  • Don’t accept unsigned/duplicate contract note/confirmation memo
  • Don’t accept contract note/confirmation memo signed by any unauthorised person.
  • Don’t delay payment/deliveries of securities to broker/ sub-broker.
  • Don’t get carried away by luring advertisements, if any.
  • Don’t be led by market rumours or get into shady transactions
DEALING IN SECURITIESTop
DO’S
  • Transact only through Stock Exchanges.
  • Deal only through SEBI registered intermediaries.
  • Complete all the required formalities of opening an account properly (Client registration, Client agreement forms etc).
  • Ask for and sign “Know Your Client Agreement”(KYC).
  • Read and properly understand the risks associated with investing in securities / derivatives before undertaking transactions.
  • Assess the risk – return profile of the investment as well as the liquidity and safety aspects before making your investment decision.
  • Ask all relevant questions and clear your doubts with your broker before transacting.
  • Invest based on sound reasoning after taking into account all publicly available information and on fundamentals.
  • Give clear and unambiguous instructions to your broker / sub-broker / depository participant
  • Be vigilant in your transactions.
  • Insist on a contract note for your transaction.
  • Verify all details in contract note, immediately on receipt.
  • Crosscheck details of your trade with details as available on the Exchange website.
  • Scrutinize minutely both the transaction and the holding statements that you receive from your Depository participant.
  • Keep copies of all your investment documentation.
  • Handle Delivery Instruction Slips (DIS) Book issued by DP’s carefully.
  • Insist that the DIS numbers are pre-printed and your account number (client id) be pre stamped.
  • Incase you are not transacting frequently make use of the freezing facilities provided for your demat account.
  • Pay the margins required to be paid in the time prescribed.
  • Deliver the shares in case of sale or pay the money in case of purchase within the time prescribed.
  • Participate and vote in general meetings either personally or through proxy.
  • Be aware of your rights and responsibilities.
  • Incase of complaints approach the right authorities for redressal in a timely manner
DON’TS
  • Don’t undertake off-market transactions in securities.
  • Don’t deal with unregistered intermediaries.
  • Don’t fall prey to promises of unrealistic returns.
  • Don’t invest on the basis of hearsay and rumors; verify before investment.
  • Don’t forget to take note of risks involved in the investment.
  • Don’t be misled by rumours circulating in the market.
  • Don’t be influenced into buying into fundamentally unsound companies (penny stocks) based on sudden spurts in trading volumes or prices or non authentic favorable looking articles / stories.
  • Don’t follow the herd or play on momentum - it could turn against you
  • Don’t be misled by so called hot tips.
  • Don’t try to time the market.
  • Don’t hesitate to approach the proper authorities for redressal of your doubts / grievances.
  • Don’t leave signed blank Delivery Instruction Slips of your demat account lying around carelessly or with anyone.
  • Do not sign blank Delivery Instruction Slips(DIS) and keep them with Depository Participant(DP) or broker to save time. Remember your carelessness can be your peril.
INVESTING IN MUTUAL FUNDSTop
DO’S
  • Read the offer document carefully before investing.
  • Note that investments in Mutual Funds may be risky.
  • Mention your bank account number in the application form.
  • Invest in a scheme depending upon your investment objective and risk appetite.
  • Note that Net Asset Value of a scheme is subject to change depending upon market conditions.
  • Insist for a copy of the offer document/key information memorandum before investing.
  • Note that past performance of a scheme is not indicative of future performance.
  • Past performance of a scheme may or may not be sustained in future.
  • Keep track of the Net Asset Value of a scheme, where you have invested, on a regular basis.
  • Ensure that you receive an account statement for the money that you have invested.
  • Update yourself on the performance of the scheme on a regular basis.
DON’TS
  • Do not invest in a scheme just because somebody is offering you a commission or other incentive, gifts etc.
  • Do not get carried away by the name of the scheme/Mutual Fund.
  • Do not fall prey to promises of unrealistic returns.
  • Do not forget to take note of risks involved in the investment.
  • Do not hesitate to approach concerned persons and then the appropriate authorities for any problem.
  • Do not deal with any agent/broker dealer who is not registered with Association of Mutual Funds in India (AMFI)
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Attention Investors : ******KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (Broker, DP, Mutual Fund, etc)., you need not undergo the same process again when you approach another intermediary******                   *****Prevent unauthorised transactions in your demat account : Update your mobile number with your Depository Participant. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat account directly from CDSL on the same day ....... issued in the interest of investors******                   *****ASBA : "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."******        ****** As per Communique No.CDSL/OPS/DP/POLCY/2017/267 dated May 29, 2017 from CDSL, DPs shall obtain copy of Aadhar Card while opening new demat account and all existing individual demat accounts be linked with Aadhar.******