The Securities and Exchange Board of India (“SEBI”) has introduced a modified Investor Charter for Stock Brokers to enhance financial consumer protection, financial inclusion, and transparency in Annexure A of the circular hyperlinked below. The updated Charter outlines stock brokers’ responsibilities and investors’ rights, providing clear timelines for broker activities and ensuring streamlined grievance redressal mechanisms. It also reinforces the use of technology-driven solutions such as SEBI’s SCORES platform and the Online Dispute Resolution (“ODR”) system to address investor complaints efficiently.

Key highlights:

1. Modification of Investor Charter for Stock Brokers: The Investor Charter for Stock Brokers covers the following key aspects:
   1. Services offered to investors, including trade execution for buying and selling securities, issuance of contract notes summarizing trades and fees, and handling margin payments required to secure trading positions.
   2. Timelines for critical broker activities such as completing account opening formalities, verifying clients’ identities through KYC and in-person verification, and ensuring swift resolution of investor complaints.
   3. Investors’ rights, including receiving accurate and timely account statements detailing funds and securities, accessing grievance redressal mechanisms for filing complaints, and ensuring transparent communication regarding fees, charges, and trading practices.
2. Stock Brokers are required to:
   1. Disclose the updated Investor Charter on their websites.
   2. Display the Charter prominently in their offices.
   3. Provide copies of the Charter in client account opening kits.
   4. Circulate the Charter via emails and letters to clients (existing and new).

3. Grievance Redressal Mechanism:
   1. Stock Brokers must disclose data on investor complaints received and resolved on their websites by the 7^th of each succeeding month.
   2. The disclosure format to be used by Stock Brokers is provided in Annexure B.

The Circular is hyperlinked below for ease of reference.

Source: Securities and Exchange Board of India

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