SEBI modifies Investor Charter for Stock Brokers.
In a move to enhance financial consumer protection alongside enhanced financial inclusion and financial literacy and in view of the recent developments in the securities market including introduction of Online Dispute Resolution (ODR) platform and SCORES 2.0, SEBI has modified Investor Charter for Stock brokers.
The Circular issued in this behalf, list out the services, provided to investors by the stock brokers, rights of investors, various activities of Stock Brokers with timelines, grievance redressal mechanism, dos and don’t for Investors, procedure to be adopted by SEBI on stock broker’s default etc. It also prescribes format for Investor Complaints Data to be displayed by Stock Brokers on their respective websites.
As per the Circular, the rights of the investors are as under:
1.Ask for and receive information from a firm about the work history and background of the person handling your account, as well as information about the firm itself (including website providing mandatory information).
2. Receive complete information about the risks, obligations, and costs of any investment before investing.
3. Receive a copy of all completed account forms and rights &obligation document.
4. Receive a copy of ‘Most Important Terms & Conditions’ (MITC).
5. Receive account statements that are accurate and understandable.
6. Understand the terms and conditions of transactions you undertake.
7. Access your funds in a prescribed manner and receive information about any restrictions or limitations on access.
8. Receive complete information about maintenance or service charges, transaction or redemption fees, and penalties in form of tariff sheet.
9. Discuss your grievances with compliance officer/compliance team/dedicated grievance redressal team of the firm and receive prompt attention to and fair consideration of your concerns.
10. Close your zero balance accounts online with minimal documentation
11. Get the copies of all policies (including Most Important Terms and Conditions) of the broker related to dealings of your account
12. Not be discriminated against in terms of services offered to equivalent clients
134. Get only those advertisement materials from the broker which adhere to Code of Advertisement norms in place.
14. In case of broker defaults, be compensated from the Exchange Investor Protection Fund as per the norms in place
15. Trade in derivatives after submission of relevant financial documents to the broker subject to brokers’ adequate due diligence.
16. Get warnings on the trading systems while placing orders in securities where surveillance measures are in place
17. Get access to products and services in a suitable manner even if differently abled18.Get access to educational materials of the MIIs and brokers
19. Get access to all the exchanges of a particular segment you wish to deal with unless opted out specifically as per Broker norms
20. Deal with one or more stockbrokers of your choice without any compulsion of minimum business.
21. Have access to the escalation matrix for communication with the broker.
22. Not be bound by any clause prescribed by the Brokers which are contravening the Regulatory provisions
The timelines has been prescribed for various activities of Stock Brokers as under:
| S. No. | Activities | Expected Timelines |
| 1. | KYC entered into KRA System and CKYCR | 3 working days of account opening |
| 2. | Client Onboarding | Immediate, but not later than one week |
| 3. | Order execution | Immediate on receipt of order, but not later than the same day |
| 4. | Allocation of Unique Client Code | Before trading |
| 5. | Copy of duly completed Client Registration Documents to clients | 7 days from the date of upload of Unique Client Code to the Exchange by the trading member |
| 6. | Issuance of contract notes | 24 hours of execution of trades |
| 7. | Collection of upfront margin from client | Before initiation of trade |
| 8. | Issuance of intimations regarding other margin due payments | At the end of the T day |
| 9. | Settlement of client funds | First Friday/Saturday of the month/quarter as per Exchange pre-announced schedule |
| 10. | Statement of Accounts for Funds, Securities and Commodities | Monthly basis |
| 11. | Issuance of retention statement of funds/ commodities | 5 days from the date of settlement |
| 12. | Issuance of Annual Global Statement | 30 days from the end of the financial year |
| 13. | Investor grievances redressal | 21 calendar days from the receipt of the complaint |
Download SEBI Circular Click Here >>
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