Published on Saturday, December 3, 2011 by Chittorgarh.com Team | Modified on Wednesday, May 6, 2020
Best Online Trading Account
We can help you find the right broker and save upto 90% in brokerage fees.
Clients put a lot of faith in brokers when they put the money in trading accounts and keep the shares with the demat account (which may have a limited Power of Attorney (PoA) with the broker).
Despite a wide range of regulations by SEBI, stock exchanges and depositories, some brokers still find ways to misuse the customer funds and shares. The common frauds involve:
But it's easy to safeguard yourself from the fraud by the broker. With a little caution, you could make sure that the money and shares are safe in your demat account.
Many online brokers (Zerodha, 5paisa and Edelweiss) now offer online trading and demat account without PoA. You just have to re-enter the password to authorize the debit of shares from your demat account while placing the sale order. Your authorization is valid for 1 day.
In case the broker doesn't allow you to sell shares without signing a PoA, be careful while executing the PoA by reading the causes. Note that PoA is not a mandatory requirement as per SEBI / Exchanges.
While SEBI, exchanges and depositories are responsible for investor protection in general, it is the customer's responsibility too to safeguard his investments from any fraudulent activity of the broker or its relationship managers.
Must Read:
Demat account in India is used to hold Shares, Mutual Funds, Bonds, ETD, etc. in electronic format for short to long term. Demat Account Safety is one of the major concerns of investors. But with a few simple steps, you can save your demat account from any fraudulent activity of the broker or its relationship managers.
Steps for safe demat account
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