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Do’s and Don’ts of Investing in Securities Market

The investors should be well informed about their rights, responsibilities, Do’s and Don’ts of investing.

Do’s

  • You may consult with a SEBI registered Investment Advisor for your investment needs in securities market
  • Invest in a scheme/product depending upon your investment objective and risk appetite.
  • Insist on a valid contract note/ confirmation memo for trades done within 24 hours of the transaction. Keep track of your portfolio in your demat account on a regular basis.
  • Read all the documents carefully before signing them.

    • To know more, please watch the following videos:

  • You should carefully note all the charges/ fees/ brokerage that are applicable on your accounts and keep a record of the same.
  • Keep a record of documents signed, account statements, contract notes received and payments made.
  • Periodically review your financial needs / goals and review the portfolio to ensure that the same are possible to achieve.
  • Always pay for your transactions using banking channel, i.e. no dealing in cash.
  • Always keep your information updated. Inform your stock broker / depository participant whenever there is change in your address or bank details or email ID or mobile number. Since SIM cards now have the feature of getting ported to different service providers, investors may keep single mobile numbers attached with their respective accounts. (Mobile number is the key to all important transactions)

    • To know more, please watch the following videos:

  • Avail nomination facility for all your investments. Multiple nominations are allowed in demat account.
  • Get your running accounts settled periodically (once in 30 / 90 days, as opted by you).
  • Keep a regular check of your running account.
  • Examine and review your trading account periodically.
  • Regular checking of daily SMS and email from Exchange regarding trades done on that day.
  • Regular checking of Monthly SMS and email from Exchange regarding funds and securities balances of the investors maintained with the Trading Member.

Don’ts

  • Don’t borrow money for investment.
  • Don't deal with unregistered brokers / other unregistered intermediaries.
  • Don’t pay more than the agreed brokerage/charges to the intermediary.
  • Don't execute any document with any intermediary without fully understanding its terms and conditions.
  • Don’t sign any blank form or Delivery Instruction Slips.
  • Don’t issue general power of attorney (PoA) in favour of the Stock Broker/ Depository Participant. Exercise due diligence by issuing a very specific one, if you want to issue a PoA.
  • In case of disputes, file written complaint to intermediary/ Stock Exchange/SEBI within a reasonable time.
  • Dabba Trading is illegal. Even if it appears that you are saving on costs, do not indulge in Dabba Trading as it offers no benefits of safe and guaranteed trades done on Stock Exchanges.
  • Do not rely on making your investment decisions on hot tips as a person who wants to offload securities which may not be marketable may be indulging in it. Disseminating hot tips is also an illegal activity which should be reported to SEBI.
  • Never share your password for online account with anyone. Do change the passwords frequently.

    • To know more, please watch the following videos:

    (i) Don't believe in Rumours?


    (ii) Collective Investment Scheme Hearsay?


    (iii) Unsolicited Stock Tips


    (iv) Do not share your password

  • Don’t fall prey to Ponzi schemes, unregistered chit funds, unregistered collective investment or unregistered deposit schemes.
  • Don't forget to strike off blank spaces in your KYC documents.
  • Don't opt for digital contracts, if you're not familiar with computers.