Where there is money there is fraud. Fraudsters target innocent people almost everywhere to make quick money. Frauds are not just restricted to your bank account, mobile phone and computer; you might even get cheated when investing your money in stocks.
Your stock investment can actually be risky if you do not take proper precautions in time. So, NSE has issued a number of guidelines for investors to stay away from frauds.
1. Strike of blanks in your KYC
While filling in the KYC, you must select the segment in which you want to trade. It might be equity, futures and options or currency derivates. After you select the segment you want, strike off the ones you don't need. In case you leave the slots blank, there are chances of someone else making a choice for you.
2. Never submit incomplete KYC form
You must always submit the completed KYC form to prevent vagueness and financial loss.
3. Avoid digital contacts, if you are not familiar with computers
If you are not familiar with computers; you must opt for physical contracts rather than the digital ones. In case you are choosing digital contract notes, you must provide an active email ID. If you do not provide proper email ID, contract notes and important notifications will not reach you. You must check your emails on a regular basis to monitor your transactions.
4. Never share your trading passwords
Sharing is caring, but this is not true when it comes to sharing your personal information like passwords. You must never reveal the trading password to anyone as it leads to misuse. If you share your passwords, fraudsters could trade on your behalf; without your knowledge. You must change your passwords regularly, especially when you access your account from cyber cafes or public computers.
5. Check your account regularly
Keep track of your running accounts regularly. You must not keep surplus funds lying idle in your account and deposit only as much as is required for a transaction. Settle the accounts on a monthly basis by settling of funds and securities.
1. Beware of assured or fixed income
Investors must never get carried away by the assurances of a guaranteed income. Assured income means you will be promised a specific percentage of return on your equity investments for a certain time period. But, there is no fixed return in equity as it is highly volatile and changes in minutes. So, if someone is offering a fixed return on equity investment, it’s a warning sign.
2. Do not invest in unregistered entities
Schemes which offer assured income are not market regulated; which might lead to frauds. So; you must never invest in schemes run by an entity not registered with SEBI.
See Also: How your stock broker may cheat you?
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