DEALING WITH BROKERS & SUB – BROKERS Dos and Don’ts

DEALING WITH BROKERS & SUB – BROKERS - DOs

** Deal only with SEBI registered intermediaries.

** Ensure that the intermediary has a valid registration certificate.

** Ensure that the intermediary is permitted to transact in the market.

** State clearly who will be placing orders on your behalf

** Insist on client registration form to be signed by the intermediary before

commencing operations.

** Enter into an agreement with your broker or 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 a representative authorized to sign, 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 each

day 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 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 payout.

** In 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.

** Give clear and unambiguous instructions to the broker/ sub-broker.

** Keep a record of all the instructions issued to the broker/ sub- broker.

** Keep track of your portfolio in your Demat A/c on a regular basis.

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

pay-in 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.

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