ET Markets

Dos and don'ts vis-a-vis your brokers to avoid Karvy-like mess

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A stitch in time, saves...
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A stitch in time, saves...

In the wake of the Karvy Broking crisis, investors have increasingly grown suspicious of their brokers and turned doubtful about the safety of their investment. In order to try and restore investor confidence in the system, the National Stock Exchange (NSE) on Friday came out with a list of dos and don'ts for investors to follow while dealing with their brokers.

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One-day pay-out rule
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One-day pay-out rule

Ensure that pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.

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Who's got the power?
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Who's got the power?

Be careful while executing the PoA (Power of Attorney) - specify all the rights that the stock broker can exercise and timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI/Exchanges.

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​To PoA or not to...
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​To PoA or not to...

Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

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​Get your papers right (away)
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​Get your papers right (away)

Ensure that you receive Contract Notes within 24 hours of your trades and Statement of Account at least once in a quarter from your Stock Broker

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Settlement of accounts
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Settlement of accounts

If you have opted for running account, please ensure that the stock broker settles your account regularly and in any case not later than 90 days (or 30 days if you have opted for 30 days settlement).

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No to spare funds
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No to spare funds

Do not keep funds and securities idle with the Stock Broker.

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Keep checking
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Keep checking

Regularly login into your account to verify balances and verify the demat statement received from depositories for correctness. Do check messages sent by Exchanges on a monthly basis regarding funds and securities balances reported by the trading member and immediately raise a concern if you notice a discrepancy.

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Stay up-to-date
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Stay up-to-date

Always keep your contact details viz Mobile number/Email ID updated with the stock broker. You may take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.

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​Act in time
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​Act in time

If you observe any discrepancies in your account or settlements, immediately take up the same with your stock broker and if the Stock Broker does not respond, with the Exchange/Depositories

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