One of the main stock exchanges in India is the BSE. BSE is the Bombay stock exchange. It was established in 1875 and today there are a lot of companies that are listed with it. This exchange is a very old one and it mainly focuses on the interest of the investors. This exchange gives all information that is related to the market via press release.
Investor protection
This is the main motive of the exchange. Keeping in mind this objective in 1986 the Investor services cell that is the ISC was set up. Any complaints about any member of the stock exchange or any company by the investor will addressed to by this cell. Any legal proceedings between the investors and the members are also dealt by the cell. Without investors there is no market and there will be no growth in the capital market. Hence it is very vital to protect their investors so that they invest in the market. The investors feel more secure and assured when there are proper rules. So here are listed some safeguards and some tips for investors who deal with the BSE.
• The investor has to choose a registered broker or sub broker. That is the people who have registered them with the SEBI (Securities Exchange Board of India). The list of these brokers will be available with the members and also the list will be published from time to time by the exchange. One can also get the list from the website.
• While dealing with the broker or the sub broker the investor has to first fill in the Client registration form. Then they have to enter into the agreement. Getting into the agreement is very vital. However before getting into the agreement the investor should keep in mind the following:
1. Read the agreement properly clearly understand the terms and conditions.
2. Also check that these terms and conditions are out down in a valid stamp paper.
3. The agreement has to be signed both by the investor and the broker.
4. There has to be a signature on all the pages of a stamp paper.
• Always have a check on how the trading is done. Also ensure that the broker is maintaining a separate account as per the guidelines given by the exchange. After the trade is done get eth contract note or a confirmation memo from the broker. Confirmation memo is just a memo that shows that a specific trade has been done on that particular date. The value of the trade is also mentioned in that. There are duplicates for the contract note where the investor will have one copy and the broker will have the other copy. The contract note will have the following in it:
1. The registration number of the broker as issued by the Securities exchange Board of India.
2. The time of the order, the value of the order, the brokerage that is paid.
3. The trade price and the brokerage must be shown separately and not together.
• The investors should keep in mind that the maximum brokerage that a broker can charge is 2.5% of the total trade value. This includes even the sub brokerage. Sub brokers can charge a maximum of 1.5%. The other additional thing that can be charged by the member is the service tax. However that also has to been shown separately and not clubbed with the brokerage.
• Once the investor gets the contract note the safe delivery of the securities in case of a sale or payment in case of a purchase has to be made before the pay in day. The broker has to pay the money within forty eight hours and open a demat account.
• It is better to buy or sell the shares that are in the demat form.
• However when the delivery is a physical delivery one has to check if it is in good condition.
• If it is not delivered in a good condition it has to be informed to the exchange immediately.
• In case of physical transfer the investor should keep in mind that there has to be a proper transfer deed in a stamp paper.
• The investor has the right to know any material information of the company which is meant for the investor. And those investors who hold the equity shares have the right when there is a further issue by the company.