Kataria Investors Awareness
At Kataria, we believe in empowering the customer about his rights and obligations and
make sure
that the client understands the Do’s and Don’t’s of dealing in securities market before
investing. We firmly comply with the regulatory rules and regulations and uphold it in
the true
spirit. For ease of access, we are providing a snapshot of various things that an
educated
investor need to be aware off before investing in the markets.
Do’s for Clients for dealing in securities
market
Trade only through Registered Members of the Exchange. Check from the Exchange website at
following links
- to see whether the Member is registered with the Exchange.
- Insist on filling up a standard ‘Know Your Client (KYC)’ form before you
commence trading.
- Insist on getting a Unique Client Code (UCC) and ensure all your trades
are done
under the
said UCC.
- Insist on reading and signing a standard ‘Risk Disclosure Agreement’.
- Obtain a copy of your KYC and/ or other documents executed by you with
the
Member, from the
Member.
- Cross check the genuineness of trades carried out at the Exchange
through the
trade
verification facility available on the Exchange website at the following links.
- The trades can be verified online where trade information is available
up to 5
working days from the trade date.
- Insist on a duly signed Contract Note in specified format for every
executed
trade within 24 hours of trade,highlighting the details of the trade along with your
UCC.
- Ensure that the Contract Note contains all the relevant information such
as
Member Registration Number,Order No., Order Date, Order time, Trade No., Trade rate,
Quantity, Arbitration Clause, etc.
- Obtain receipt for collaterals deposited with the Member towards
margins.
- Go through the Rules, Bye-laws, Regulations, Circulars, Directives,
Notifications of the Exchange as well as of the Regulators, Government and other
authorities
to know your rights and duties vis-a-vis those of the Member.
- Ask all relevant questions and clear your doubts with your Member before
transacting
- Insist on receiving the bills for every settlement.
- Insist on Monthly statements of your ledger account and report any
discrepancies
in the statement to your Member within 7 working days. In case of unsatisfactory
response
report the discrepancy to the Exchange within 15 working days from the date of cause
of
action.
- Scrutinize minutely both the transaction & holding statements that you
receive
from your Depository Participant.,/
- Keep Delivery Instruction Slips (DIS) book issued by DPs in safe
possession.
- Ensure that the DIS numbers are preprinted and your account number (UCC)
is
mentioned in the DIS book.
- Freeze your Demat account in case of your absence for longer duration or
in case
of not using the account frequently.
- Pay required margins in time and only by Cheque and ask for receipt
thereof from
the Member.
- Deliver the commodities in case of sale or pay the money in case of
purchase
within the time prescribed.
- Understand and comply with accounting standards for derivatives.
- Ensure to read, understand and then sign the voluntary clauses, if any,
agreed
between you and the Member. Note that the clauses as agreed between you and the
Member
cannot be changed without your consent.
- Get a clear idea about all brokerage, commissions, fees and other
charges levied
by the Member on you for trading and the relevant provisions/guidelines specified by
FMC/Commodity exchanges.
- Make the payments by account payee cheque in favour of the Member.
Ensure that
you have a documentary proof of your payment/deposit of commodities with the Member,
stating
date, commodity, quantity, towards which bank/ demat account such money or
commodities (in
the form of warehouse receipts) deposited and from which bank/ demat . account.
- The payout of funds or delivery of commodities (as the case may be)
shall not be
made to you within one working day from the receipt of payout from the Exchange, in
case you
have given specific authorization for maintaining running account to the member.
Thus, in
this regard, the running account authorization provided by you to the Member shall
be
subject to the following conditions:
- Such authorization from you shall be dated,
signed by
you only and contains the clause that you may revoke the same at any time.
- You need to bring any dispute arising from
the
statement of account to the notice of the Member in writing preferably within 7
(seven)
working days from the date of receipt of funds/commodities or statement, as the case
may be.
In case of dispute, refer the matter in writing to the Investors Grievance Cell of
the
relevant Commodity exchanges without delay.
- In case you have not opted for maintaining
running
account and pay-out is not received on the next working day of the receipt of payout
from
the exchanges, please refer the matter to the Member. In case there is dispute,
ensure that
you lodge a complaint in writing immediately with the Investors Grievance Cell of
the
relevant Commodity exchange.
- Please register your mobile number and email
id with
the Member, to receive trade confirmation alerts/ details of the transactions
through SMS or
email, by the end of the trading day, from the commodity exchanges.
You should familiarize yourself with the protection accorded to the money or other
property you
may deposit with your member, particularly in the event of a default in the commodity
derivatives market or the member becomes insolvent or bankrupt.
Please ensure that you have a documentary proof of having made the deposit of such money
or
property with the member, stating towards which account such money or property
deposited.
In case your problem/grievance/issue is not being sorted out by concerned
Member/Authorised
Person then you may take up the matter with the concerned Commodity Exchange. If you are
not
satisfied with the resolution of your complaint then you can escalate the matter to FMC.
Don’t’s for Clients for dealing in
securities market
- Do not deal with any unregistered intermediaries.
- Do not undertake off-market transactions as such transactions are illegal and fall
outside
the jurisdiction of the Exchange.
- Do not enter into assured returns arrangement with any Member
- Do not get carried away by luring advertisements, rumours, hot tips, explicit/
implicit
promise of returns, etc
- Do not make payments in cash/ take any cash towards margins and settlement to/ from
the
Member.
- Do not start trading before reading and understanding the Risk Disclosure Agreement.
- Do not neglect to set out in writing, orders for higher value given over phone.
- Do not accept unsigned/duplicate contract note/confirmation memo.
- Do not accept contract note/confirmation memo signed by any unauthorized person.
- Don’t share your internet trading account’s password with anyone
- Do not delay payment/deliveries of commodities to Member.
- Do not forget to take note of risks involved in the investments.
- Do not sign blank Delivery Instruction Slips (DIS) while furnishing commodities,
deposits
and/or keep them with Depository Participants (DP) or member to save time.
- Do not pay brokerage in excess of that rates prescribed by the Exchange.
- Don’t issue cheques in the name of Authorized Person.
Jaago Grahak Jaago
“I avoid DABBA TRADING in
commodity
futures”
Dabba (off-exchange) trading is both risky and illegal.
- Dabba trading or trading in commodity futures outside the
FMC-regulated exchanges is illegal as per the Forward Contracts Regulation Act
(FCRA), 1952.
- Dabba trading is also risky as it does not provide
protection
against counterparty default risk as guaranteed by commodity futures exchanges for
trades
done on them.
I insist on and verify records of all my commodity futures trades.
- I insist on keeping all the records (contract notes etc.)
related
to my trades.
- I also verify the authenticity of these records with the
detailed
information available on the exchange website upto 5 working days from the day of
trade.
A dispute in Dabba trading cannot be redressed by the commodity exchange.
- Dispute arising in Dabba trading can only be referred to
police.
- However, disputes arising in trades done on commodity
futures
exchanges can be redressed, including through arbitration,as provided by the
exchange bylaws
and regulations.
“There are NO GUARANTEED
RETURNS on
commodity market investment”
- Risk is an integral part of investment in commodity markets, and returns
from
this market cannot be assured.
- Beware of all promotional and sales advertisements/literatures/talks
that
promise guaranteed and high returns on your investment in commodity futures markets.
- Knowledge of physical markets of the commodities that you invest in is
essential
to make informed decision.
- Do not believe in price tips and rumours. Do your own homework to trade
in them
successfully.
“I TRADE ONLY on recognised
commodity
futures exchanges”
I know how to protect my investment
- I trade only on regulated Commodity Futures
Exchanges.
Trading outside
Recognised Exchanges (Dabba trading) is illegal and has the risk of losing my
investment
(margin money)
Trading in Recognised Commodity Futures Exchanges is transparent and it
gives
everybody equal access
- Being regulated, Commodity Futures Exchanges
provide
equal access to all subject
to common entry norms
Trading on Recognised Commodity Exchanges gives me peace of mind about security of
my money
and fair trading
- Regulated Commodity Exchanges guarantee
quality,
quantity, price, settlement,
etc, as per contract terms
The Commodity Futures Exchange protects my interests in case of a dispute
- The Commodity Futures Exchange ensures issue
of a
contract note as a proof of
order execution with all trade details, which enables me to seek redressal for any
grievance/dispute. Trading outside an exchange is illegal and cannot provide legal
remedies/redress my grievances
” Trade in Commodity Futures
WITHOUT
FEAR OF FRAUD. “
Know Your Rights…
- Insist on a contract note for trades executed
- Approach the Exchange or the Forward Markets Commission
(FMC) for
redressal of your grievances
- Ensure that trading in your account is conducted only on
your
specific instructions and without unreasonable delay
- Insist on periodical statement of ledger accounts
- Conduct transactions only through cheque
” I TAKE MY OWN INVESTMENT
DECISIONS “
I do my own research on commodities and take my own
decisions while investing
- Besides supply and demand fundamentals, interest rates,
exchange
rates and govt. policy too drives commodity prices. I seek information on these
pricemoving
factors from reliable independent sources before taking my trading decisions
I don’t get
lured by false promises of assured returns
- Returns can never be guaranteed in the
commodity
futures market
I don’t avail of portfolio management services (PMS)
- PMS services in commodities are not permitted
by
Forward Markets Commission (FMC) the regulator for the commodity futures market and
is
illegal
It’s my money; I manage it myself
- I do not invest in commodities that I do not
understand. I know that investing in commodities is different from investing in
securities
or other instruments. Without knowledge of fundamental factors, I do not risk my
hard-earned
money.
" I am AN IDEAL FUTURES MARKET
TRADER"
I trade only on recognised commodity futures
exchanges
- I know that trading outside an exchange
platform is
illegal
I trade through brokers/members registered with the Forward Markets Commission
(FMC). List
of such brokers is available on the exchange websites.
- I verify my broker’s credentials
I don’t get lured by promises of assured returns before trading
- I do my own research on commodities before
trading I
study the contract specifications and the delivery and settlement procedure before
trading
I keep verified records of all market transactions
- I insist on contract notes, receipts and
account
statements from my broker. Verify them with the information available on the
Exchange
website
I always pay by cheque from my designated account
- I pay the broker by cheque (including margins),
in his
name, insist on receipts and keep these carefully and understand that I am entitled
to
receive funds within 48 hours of Exchange’s pay-out
I trade within my investment and risk taking capacity
- I know my ability to take risks and avoid
overtrading
despite lure of making huge profit
NSE Contact details of
Investor
Service
Centre
