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What kind of details do I have to provide in Client Registration form? |
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The brokers have to maintain a database of their clients, for which you have to fill client registration form. In case of individual client registration, you have to broadly provide following information: |
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Your name, date of birth, photograph, address, educational squalifications, occupation, residential status(Resident Indian/ NRI/others) |
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Unique Identification Number (wherever applicable) |
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Bank and depository account details |
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Income tax No. (PAN/GIR) which also serves as unique client code. |
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If you are registered with any other broker, then the name of broker and concerned Stock exchange and Client Code Number. |
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Proof of identity submitted either as MAPIN UID Card/Pan No./Passport/Voter ID/Driving license/Photo Identity card issued by Employer registered under MAPIN |
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Passport |
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Rent Agreement |
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Voter ID |
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Ration Card |
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Driving license |
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Flat Maintenance Bill |
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Bank Passbook |
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Telephone Bill |
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Electricity Bill |
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Certificate issued by employer registered under MAPIN |
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Insurance Policy |
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Each client has to use one registration form. In case of joint names / family members, a separate form has to be submitted for each person.
In case of Corporate Client, following information has to be provided: |
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Name, address of the Company/Firm |
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Unique Identification Number (wherever applicable) |
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Date of incorporation and date of commencement of business. |
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Registration number(with ROC, SEBI or any government authority) |
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Details of PAN Account Number: |
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Details of Promoters/Partners/Key managerial Personnel of the Company/Firm in specified format. |
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Bank and Depository Account Details |
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Copies of the balance sheet for the last 2 financial years (copies of annual balance sheet to be submitted every year) |
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Copy of latest share holding pattern including list of all those holding more than 5% in the share capital of the company, duly certified by the Company Secretary / Whole time Director/MD. (copy of updated shareholding pattern to be submitted every year) |
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Copies of the Memorandum and Articles of Association in case of a company / body incorporate / partnership deed in case of a partnership firm. |
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Copy of the Resolution of board of directors' approving participation in equity / derivatives / debt trading and naming authorized persons for dealing in securities. |
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Photographs of Partners/Whole time directors, individual promoters holding 5% or more, either directly or indirectly, in the shareholding of the company and of persons authorized to deal in securities. |
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If registered with any other broker, then the name of broker and concerned Stock exchange and Client Code Number. |
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What is MAPIN? |
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MAPIN is the Market Participants and Investors Integrated Database. The SEBI (Central Database of Market Participants) Regulations, 2003 were notified on November 20, 2003. As per these regulations, all the participants in the Indian Securities Market viz., SEBI registered intermediaries, listed companies and their associates and the investors would need to get registered and obtain a Unique Identification Number (UIN). The system for allotment of UIN involves the use of biometric impressions for natural persons.
The major objective is creation of a comprehensive database of market participants. Once created, the database would not only help the regulator in establishing the identity of person(s) who have taken large exposures in the market and/or who are trading through a large number of different brokers but also enable the regulator to take adequate risk containment measures such as imposition of margins, trading or exposure limits etc., depending upon the exposures of various investors. Hence, in the event of a failure of market integrity, an immediate audit trail would be possible and the regulator would be able to take early preventive and / or remedial measures and track down the defaulters and / or manipulators.
It has been decided to suspend all fresh registrations for obtaining UIN and the requirement to obtain/quote UIN under the MAPIN Regulations / Circulars with effect from July 01, 2005. |
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What are the charges that can be levied on the investor by a stock broker/sub broker? |
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The trading member can charge: |
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What is STT? |
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Securities Transaction Tax (STT) is a tax being levied on all transactions done on the stock exchanges at rates prescribed by the Central Government from time to time. Pursuant to the enactment of the Finance (No.2) Act, 2004, the Government of India notified the Securities Transaction Tax Rules, 2004 and STT came into effect from October 1, 2004. |
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What is an Account Period Settlement? |
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An account period settlement is a settlement where the trades pertaining to a period stretching over more than one day are settled. For example, trades for the period Monday to Friday are settled together. The obligations for the account period are settled on a net basis. Account period settlement has been discontinued since January 1, 2002, pursuant to SEBI directives. |
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What is a Rolling Settlement? |
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In a Rolling Settlement trades executed during the day are settled based on the net obligations for the day. |
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Presently the trades pertaining to the rolling settlement are settled on a T+2 day basis where T stands for the trade day. Hence, trades executed on a Monday are typically settled on the following Wednesday (considering 2 working days from the trade day). |
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The funds and securities pay-in and pay-out are carried out on T+2 day. |
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What is the pay-in day and pay- out day? |
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Pay in day is the day when the brokers shall make payment or delivery of securities to the exchange. Pay out day is the day when the exchange makes payment or delivery of securities to the broker. Settlement cycle is on T+2 rolling settlement basis w.e.f. April 01, 2003. The exchanges have to ensure that the pay out of funds and securities to the clients is done by the broker within 24 hours of the payout. The Exchanges will have to issue press release immediately after pay out. |
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What are the prescribed pay-in and pay-out days for funds and securities for Normal Settlement? |
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The pay-in and pay-out days for funds and securities are prescribed as per the Settlement Cycle. A typical Settlement Cycle of Normal Settlement is given below:
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Activity |
Day |
| Trading |
Rolling Settlement Trading |
T |
| Clearing |
Custodial Confirmation |
T+1 working days |
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Delivery Generation |
T+1 working days |
| Settlement |
Securities and Funds pay in |
T+2 working days |
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Securities and Funds pay out |
T+2 working days |
| Post Settlement |
Valuation Debit |
T+2 working days |
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Auction |
T+3 working days |
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Bad Delivery Reporting |
T+4 working days |
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Auction settlement |
T+5 working days |
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Close out |
T+5 working days |
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Rectified bad delivery pay-in and pay-out |
T+6 working days |
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Re-bad delivery reporting and pickup |
T+8 working days |
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Close out of re-bad delivery |
T+9 working days |
Note: The above is a typical settlement cycle for normal (regular) market segment. The days prescribed for the above activities may change in case of factors like holidays, bank closing etc. You may refer to scheduled dates of pay-in/pay-out notified by the Exchange for each settlement from time-to-time. |
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How long it takes to receive my money for a sale transaction and my shares for a buy transaction? |
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Brokers were required to make payment or give delivery within two working days of the pay - out day. However, as settlement cycle has been reduced fromT+3 rolling settlement to T+2 w.e.f. April 01, 2003, the pay out of funds and securities to the clients by the broker will be within 24 hours of the payout. |
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Is there any provision where I can get faster delivery of shares in my account? |
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The investors/clients can get direct delivery of shares in their beneficiary accounts. To avail this facility, you have to give details of your beneficiary account and the DP-ID of your DP to your broker along with the Standing Instructions for ‘Delivery-In’ to your Depository Participant for accepting shares in your beneficiary account. Given these details, the Clearing Corporation/Clearing House shall send pay out instructions to the depositories so that you receive pay out of securities directly into your beneficiary account. |
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What is an Auction? |
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The Exchange purchases the requisite quantity in the Auction Market and gives them to the buying trading member. The shortages are met through auction process and the difference in price indicated in contract note and price received through auction is paid by member to the Exchange, which is then liable to be recovered from the client. |
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What happens if the shares are not bought in the auction? |
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If the shares could not be bought in the auction i.e. if shares are not offered for sale in the auction, the transactions are closed out as per SEBI guidelines. |
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The guidelines stipulate that “the close out Price will be the highest price recorded in that scrip on the exchange in the settlement in which the concerned contract was entered into and upto the date of auction/close out OR 20% above the official closing price on the exchange on the day on which auction offers are called for (and in the event of there being no such closing price on that day, then the official closing price on the immediately preceding trading day on which there was an official closing price), whichever is higher. |
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Since in the rolling settlement the auction and the close out takes place during trading hours, the reference price in the rolling settlement for close out procedures would be taken as the previous day’s closing price. |
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