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
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to see whether the Member is registered with the Exchange.
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Insist on filling up a standard ‘Know Your Client (KYC)’ form
before you commence trading.
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Insist on getting a Unique Client Code (UCC) and ensure all your
trades are done under the said UCC.
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Insist on reading and signing a standard ‘Risk Disclosure
Agreement’.
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Obtain a copy of your KYC and/ or other documents executed by
you with the Member, from the Member.
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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.
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The trades can be verified online where trade information is
available up to 5 working days from the trade date.
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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.
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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.
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Obtain receipt for collaterals deposited with the Member towards
margins.
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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.
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Ask all relevant questions and clear your doubts with your
Member before transacting
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Insist on receiving the bills for every settlement.
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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.
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Scrutinize minutely both the transaction & holding statements
that you receive from your Depository Participant.,/
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Keep Delivery Instruction Slips (DIS) book issued by DPs in safe
possession.
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Ensure that the DIS numbers are preprinted and your account
number (UCC) is mentioned in the DIS book.
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Freeze your Demat account in case of your absence for longer
duration or in case of not using the account frequently.
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Pay required margins in time and only by Cheque and ask for
receipt thereof from the Member.
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Deliver the commodities in case of sale or pay the money in case
of purchase within the time prescribed.
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Understand and comply with accounting standards for derivatives.
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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.
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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.
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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.
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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:
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Such authorization from you shall be dated, signed by you only
and contains the clause that you may revoke the same at any
time.
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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.
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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.
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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.
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Do not undertake off-market transactions as such transactions
are illegal and fall outside the jurisdiction of the Exchange.
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Do not enter into assured returns arrangement with any Member
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Do not get carried away by luring advertisements, rumours, hot
tips, explicit/ implicit promise of returns, etc
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Do not make payments in cash/ take any cash towards margins and
settlement to/ from the Member.
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Do not start trading before reading and understanding the Risk
Disclosure Agreement.
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Do not neglect to set out in writing, orders for higher value
given over phone.
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Do not accept unsigned/duplicate contract note/confirmation
memo.
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Do not accept contract note/confirmation memo signed by any
unauthorized person.
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Don’t share your internet trading account’s password with anyone
- Do not delay payment/deliveries of commodities to Member.
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Do not forget to take note of risks involved in the investments.
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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.
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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.
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Dabba trading or trading in commodity futures outside the
FMC-regulated exchanges is illegal as per the Forward Contracts
Regulation Act (FCRA), 1952.
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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.
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I insist on keeping all the records (contract notes etc.)
related to my trades.
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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.
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Dispute arising in Dabba trading can only be referred to police.
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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”
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Risk is an integral part of investment in commodity markets, and
returns from this market cannot be assured.
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Beware of all promotional and sales
advertisements/literatures/talks that promise guaranteed and
high returns on your investment in commodity futures markets.
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Knowledge of physical markets of the commodities that you invest
in is essential to make informed decision.
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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
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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
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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
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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
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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…
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Insist on a contract note for trades executed
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Approach the Exchange or the Forward Markets Commission (FMC)
for redressal of your grievances
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Ensure that trading in your account is conducted only on your
specific instructions and without unreasonable delay
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Insist on periodical statement of ledger accounts
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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
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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
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Returns can never be guaranteed in the commodity futures market
I don’t avail of portfolio management services (PMS)
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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
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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
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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.
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I verify my broker’s credentials I don’t get lured by promises
of assured returns before trading
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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
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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
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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
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I know my ability to take risks and avoid overtrading despite
lure of making huge profit
NSE Contact details of Investor Service Centre
