Attention Investors
Please read these SEBI-mandated investor warnings carefully before transacting in securities.
Investor warnings
- 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.
- Do not keep funds idle with the stock broker. 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 the last 30 calendar days. 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.
- 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-day 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 the Exchange website at nseindia.com/invest/about-defaulter-section.
- 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. Brokers can take securities belonging to clients only for settlement of securities sold by the client.
- Always keep your contact details updated with the stock broker. Email and mobile number are 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.
- 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 any discrepancy to your broker in writing immediately. If the Stock Broker does not respond, please take this up with the Exchange / Depositories forthwith.
- Check weekly Exchange messages on funds and securities balances. Compare these with the weekly statement of account sent by your broker and immediately raise a concern with the Exchange if you notice a discrepancy.
- Do not transfer funds to anyone other than a SEBI-registered stock broker. This includes transfers to authorized persons or associates of the broker.
Risk disclosures on derivatives
- 9 out of 10 individual traders in the equity Futures and Options Segment incurred net losses.
- On average, loss makers registered net trading losses 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% and 50% of such profits as transaction costs.
Source: SEBI study dated January 25, 2023 on "Analysis of Profit and Loss of Individual Traders dealing in equity Futures and Options (F&O) Segment". Aggregate-level findings are based on annual profit/loss incurred by individual traders in equity F&O during FY 2021–22.