Are you sure you’re protected when investing? Many people dive into the stock market without fully understanding the risks. Before you make any decisions, remember this: Investment in the securities market is subject to market risks. Read all the related documents carefully before investing!
This article summarizes and clarifies important information, acting as a guide to understanding the rules and regulations in place to protect you, the investor. Let’s break down what you need to know, presented with the utmost clarity and care.
Upstox, a prominent player in the Indian financial landscape, operates under strict regulatory oversight. Upstox Securities Pvt. Ltd. holds SEBI Registration No. INZ000315837, with NSE TM Code: 13942 and BSE TM Code: 6155. Their CDSL Registration No. is IN-DP-761-2024, and their CIN is U65100DL2021PTC376860. Mr. Kapil Jaikalyani serves as the Compliance Officer and can be reached at (022) 24229920 or compliance@upstox.com. Their registered address is 809, New Delhi House, Barakhamba Road, Connaught Place, New Delhi – 110001.
RKSV Commodities India Pvt. Ltd. also operates under SEBI Registration No.: INZ000015837, with MCX TM Code: 46510 and CIN: U74900DL2009PTC189166. Mr. Amit Lalan is the Compliance Officer, reachable at (022) 24229920 or compliance@rksv.in. Their registered address is 807, New Delhi House, Barakhamba Road, Connaught Place, New Delhi – 110001. The correspondence address for both entities is 30th Floor, Sunshine Tower, Senapati Bapat Marg, Dadar (West), Mumbai – 400013.
If you have any complaints, you can email complaints@upstox.com or complaints.mcx@upstox.com.
Filing a Complaint with SEBI SCORES: Your Shield Against Unfair Practices
SEBI (Securities and Exchange Board of India) provides a platform called SCORES (SEBI Complaint Redress System) to address investor grievances. To file a complaint, you must register on the SCORES portal (https://scores.sebi.gov.in/). The mandatory details include your Name, PAN, Address, Mobile Number, and E-mail ID. The benefits of using SCORES are effective communication and speedy redressal of grievances.
Before investing, it’s crucial to read the Risk Disclosure Document prescribed by SEBI (https://upstox.com/forms/), along with Upstox’s Terms of Use and Privacy Policy (https://upstox.com/terms-of-use-and-privacy-policy/). These documents are your roadmap to understanding the potential pitfalls and your rights as an investor.
Upstox Securities Private Limited is a wholly-owned subsidiary of RKSV Securities India Private Limited, and RKSV Commodities India Private Limited is an associate of RKSV Securities India Private Limited. This corporate structure is important for understanding the relationships between these entities.
The Cold, Hard Truth About Derivatives Trading:
Here’s a stark reality check: Derivatives trading carries significant risk. SEBI data reveals that:
- 9 out of 10 individual traders in equity Futures and Options segments incur net losses. This means the vast majority of people lose money trading these instruments.
- On average, loss makers registered a net trading loss close to ₹ 50,000. That’s a significant amount of money!
- Loss makers expended an additional 28% of net trading losses as transaction costs. So, even when losing, you’re paying fees.
- Those making net trading profits incurred between 15% to 50% of such profits as transaction costs. Even winners pay a hefty price in fees.
Mutual Funds: Not a Guaranteed Path to Riches
Remember, top-rated mutual funds do not constitute investment advice. Research data is powered by Morningstar, but Upstox doesn’t accept liability for your investment outcomes. Always read the offer documents carefully before investing.
These are not Exchange-traded products, and Upstox acts only as a distributor. Any disputes related to the distribution activity will not have access to the Exchange investor redressal forum or Arbitration mechanism.
Important Alerts for Investors from Regulators
As per NSE circular dated July 6, 2022, BSE circular dated July 6, 2022, and MCX circular dated July 11, 2022, investors should avoid schemes offering unauthorized collective investments/portfolio management, indicative/guaranteed/fixed returns/payments, etc. Be wary of promises that sound too good to be true.
Protect Yourself: Key Practices to Avoid
- Never share your trading credentials: This includes your login ID, passwords, and OTPs.
- Don’t share trading strategies or position details.
- Avoid leveraged products/derivatives without proper understanding: Options trading can be exceptionally risky if you don’t know what you’re doing.
- Don’t write/sell options or trade option strategies based on tips: Relying on tips without understanding the underlying risks is a recipe for disaster.
- Be cautious of unsolicited tips: Ignore tips from platforms like Whatsapp, Telegram, Instagram, YouTube, Facebook, SMS, calls, etc.
- Avoid trading/trading in “Options” based on recommendations from unauthorized/unregistered investment advisors and influencers.
Consult the Advisory Guidelines For Investors as prescribed by the Exchange with reference to their circular dated 27th August, 2021 regarding investor awareness and safeguarding client’s assets: Advisory Guidelines For Investors (https://bit.ly/3jwnuwA).
Also, refer to the advisory prescribed by the Exchange with reference to their circular dated January 14, 2022 regarding the Updation of mandatory KYC fields by March 31, 2022: KYC Updation (https://uptx.to/KYC-Updation).
Safeguarding Your Demat and Trading Accounts
To prevent unauthorized transactions in your Demat account, update your mobile number with your depository participant. You’ll receive alerts on your registered mobile number for debit and other important transactions directly from CDSL on the same day. Similarly, update your mobile numbers/email addresses with your stockbrokers to prevent unauthorized transactions in your Trading account. You’ll receive transaction information directly from the Exchange on your mobile/email at the end of the day.
KYC (Know Your Customer) is a one-time exercise. Once you’ve completed KYC through a SEBI-registered intermediary (broker, DP, Mutual Fund, etc.), you don’t need to repeat the process with another intermediary. Upstox doesn’t provide stock tips or authorize anyone to trade on behalf of others. If someone claims to be part of Upstox or RKSV and offers such services, report it to complaints@upstox.com and complaints.mcx@upstox.com.
IPO Investments: A Streamlined Process
No need to issue cheques when subscribing to an IPO. Simply write your bank account number and sign the application form to authorize your bank to make the payment if you receive an allotment. The money remains in your account until allotment, ensuring no worries about refunds. Stockbrokers can accept securities as margin from their clients only by way of a pledge in the depository system, effective September 1, 2020. Update your email ID and mobile number with your stockbroker/depository participant and receive an OTP directly from the depository to create a pledge.
Check your securities/mutual funds/bonds in the Consolidated Account Statement (CAS) issued by NSDL/CDSL every month.
Online Dispute Resolution (ODR) Portal: A Modern Solution for Investor Grievances
SEBI has established an Online Dispute Resolution Portal (ODR Portal) to resolve disputes in the Indian Securities Market. This portal streamlines the existing dispute resolution mechanism, offering online conciliation and arbitration, benefiting both investors and listed companies. You can find more information at https://www.sebi.gov.in/legal/circulars/jul-2023/online-resolution-of-disputes-in-the-indian-securities-market_74794.html. The ODR portal for Investors is available at https://smartodr.in/login.
A Final Thought: Are You Truly Informed?
Investing can be rewarding, but it’s crucial to be aware of the risks and regulations in place to protect you. Do you feel truly confident in your understanding of these rules? What are your biggest concerns when it comes to investing? Share your thoughts and experiences in the comments below!