Consumer Rights Day 2023: Investing Rights You Must Know!

Investing Rights

It’s time to safeguard your financial future! Know your investing rights and take charge today!

Soch kar, Samajh kar, Invest kar! This is the slogan used for NSE’s awareness campaigns, urging investors to take charge of their financial rights.  

As an investor, you have the right to protect your hard-earned money and make informed decisions about where to invest it. But with so many investment options available and new scams popping up every day, it can be difficult to navigate through the world of investing. That’s why on this World Consumer Rights Day 2023, we are here to help you realise the nitty-gritty details of your investing rights. 

Now, we all know of the basic rights of stock market investing. There is no such thing as guaranteed returns, and you must not rely on unsolicited recommendations from any unreliable sources. But nobody talks about critical things like the Power of Attorney, obligations of your broker and other lesser-known rights. 

So, today we will highlight a few such rights you have as an investor. 

Power of Attorney

When you open a Demat account, you may need to sign a document called Power of Attorney (POA) which lets your broker transfer shares from your account when you sell them. Although you are not required to give a POA as per SEBI, it can simplify the process of buying and selling shares. Without a POA, you must submit a signed Delivery Instruction Slip (DIS) for each transaction, which can become cumbersome if you trade frequently. However, it is important to remember that if you forget to submit the DIS, your transaction may not go through.

So if you have submitted your POA, here are the things you must know about your Power of Attorney:

  • To avoid trouble with your Power of Attorney (POA), read the document carefully, grant only necessary rights, and regularly monitor your statements. 
  • Secondly, ensure that you maintain control by receiving account statements from time to time and avoid giving investment decision-making power to your broker. 
  • Did you know you can cancel your POA anytime? So be clear about its purpose, and if you see any suspicious activity, cancel your POA. 
  • Lastly, you can specify the period while giving your POA to your broker. 

Obligations of your Broker

  • Did you know that SEBI has a rule that requires trading funds to be transferred back to your bank account every quarter? This is called quarterly settlement of funds or running account settlement. Keep an eye on this to ensure your funds are managed properly.
  • If you have a credit balance in your trading account and haven’t traded in the last 30 days, your broker must return that credit balance to you. 
  • Your stock broker cannot use the securities you provide as a margin to raise funds. This is an important protection for your investments.

Things Investors Must Take Care

  • SEBI takes unsolicited stock tips as an offence and expects you to do the same. If you receive any unsolicited tips, report them to SEBI immediately to help protect yourself and other investors. Invest with a SEBI-registered broker and investment advisors like Teji Mandi. Please do not fall for people who claim them as experts. 
  • As per the recent update by SEBI, investors must link their Aadhaar Number with their PAN before 31st March 2023 to avoid inoperative PANs and trading restrictions from 01st April 2023. 
  • Also, SEBI requires all Demat and trading account holders to add a nominee by 31st March 2023. If not done, your Demat account will be frozen.
  • Lastly, if you have any discrepancies with your broker, you can contact them. If they don’t redress your issue, you can reach out to the exchange or SEBI. 

It’s time to safeguard your financial future! Know your investing rights and take charge today!

That’s it for today. Don’t forget to share the article with your friends.

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