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Investor Charter – Stock Brokers

Investor Charter –PMS

A. Vision and Mission Statements for investors

Vision:

To implement diligently researched customised investment strategies which help investors meet their long-term financial goals in a risk appropriate manner.


Mission:

To ensure that the PMS industry provides a viable investment avenue for wealth creation by adopting high levels of skill, integrity, transparency and accountability.

B. Details of business transacted by the organization with respect to the investors.

  • a. appropriate risk profiling of investors
  • to provide Disclosure Document to investors
  • executing the PMS agreement
  • Making investment decisions on behalf of investors (discretionary) or investment decisions taken at the discretion of the Investor (non-discretionary) or advising investors regarding their investment decisions (advisory), as the case may be.

Details of services provided to investors and estimated timelines:-

i. Discretionary & Non-Discretionary Portfolio Management Services (PMS):-
Under these services, all an investor has to do, is to give his portfolio in any form i.e. in stocks or cash or a combination of both. The minimum size of the portfolio under the Discretionary and/ or Non-Discretionary Funds Management Service should be Rs.50 lakhs as per the current SEBI Regulations. However, the PMS provider reserves the right to prescribe a higher threshold product-wise or in any other manner at its sole discretion. The PMS provider will ascertain the investor’s investment objectives to achieve optimal returns based on his risk profile. Under the Discretionary Portfolio Management service, investment decisions are at the sole discretion of the PMS provider if they are in sync with the investor’s investment objectives. Under the Non-Discretionary Portfolio Management service, investment decisions taken at the discretion of the Investor.

ii. Investment Advisory Services: -
Under these services, the Client is advised on buy/sell decision within the overall profile without any back-office responsibility for trade execution, custody of securities or accounting functions. The PMS provider shall be solely acting as an Advisor to the Client and shall not be responsible for the investment/divestment of securities and/or administrative activities on the client’s portfolio. The PMS provider shall act in a fiduciary capacity towards its Client and shall maintain arm’s length relationship with its other activities. The PMS provider shall provide advisory services in accordance with guidelines and/or directives issued by the regulatory authorities and/or the Client from time to time in this regard.

iii. Client On-boarding
  • Ensuring compliance with KYC and AML guidelines.
  • franking & signing the Power of Attorney to make investment decisions on behalf of the investor.
  • opening demat account and funding of the same from the investor’s verified bank account and/or transfer of securities from verified demat account of the investor and d. Mapping the said demat account with Custodian.

iv. Ongoing activities
  • To provide periodic statements to investors as provided under the PMS Regulations 2020 and other SEBI notifications and circulars (“PMS Regulations”) and
  • Providing each client an audited account statement on an annual basis which includes all the details as required under the PMS Regulations.
v. Fees and Expenses
Charging and disclosure of appropriate fees & expenses in accordance with the PMS Regulations.

vi. Closure and Termination
Upon termination of PMS Agreement by either party, the securities and the funds lying in the account of the investor shall be transferred to the verified bank account/ demat account of the investor.

vii. Grievance Redressal
Addressing in a time bound manner investor’s queries, service requests and grievances, if any, on an ongoing basis.

S.No. Service / Activity Timeline
1 Opening of PMS account (including demat account) for residents. 7 days from receipt of all requisite documents from the client, subject to review of the documents for accuracy and completeness by portfolio manager and allied third party service providers as may be applicable.
2 Opening of PMS account (including demat account) for non-individual clients. 14 days from receipt of all requisite documents from the client, subject to review of the documents for accuracy and completeness by portfolio manager and allied third party service providers as may be applicable.
3 Opening of PMS account (including demat account, bank account and trading account) for non-resident clients. 14 days from receipt of all requisite documents from the client, subject to review of the documents for accuracy and completeness by portfolio manager and allied third party service providers as may be applicable.
4 Registration of nominee in PMS account and demat account. Registration of nominee should happen along with account opening, therefore turnaround time should be same as account opening turnaround time.
5 Modification of nominee in PMS account and demat account. 10 days from receipt of requisite nominee modification form, subject to review of the documents for accuracy and completeness by portfolio manager and allied third party service providers as may be applicable.
6 Uploading of PMS account in KRA and CKYC database. 10 days from date of account opening (Portfolio Manager may rely on the custodian for updating the same).
7 Whether portfolio manager is registered with SEBI, then SEBI registration number. At the time of client signing the agreement; this information should be a part of the account opening form and disclosure document.
8 Disclosure about latest networth of portfolio manager and total AUM. Disclosure of portfolio manager's total AUM - monthly to SEBI Disclosure of latest networth should be done in the disclosure document whenever there are any material changes.
9 Intimation of type of PMS account – discretionary At the time of client signing the agreement; this information should be a part of the account opening form.
10 Intimation of type of PMS account - non discretionary. At the time of client signing the agreement; this information should be a part of the account opening form.
11 Intimation to client what discretionary account entails and powers that can be exercised by portfolio manager. At the time of client signing the agreement; this information should be a part of the account opening form.
12 Intimation to client what nondiscretionary account entails and powers that can be exercised by portfolio manager. At the time of client signing the agreement; this information should be a part of the account opening form.
13 Copy of executed PMS agreement sent to client. Within 3 days of client request.
14 Frequency of disclosures of available eligible funds. All details regarding client portfolios should be shared quarterly (point 26).
15 Issuance of funds and securities balance statements held by client. This data should be shared on a quarterly basis or upon client request.
16 Intimation of name and demat account number of custodian for PMS account. Within 3 days of PMS and demat account opening.
17 Conditions of termination of contract. At the time of client signing the agreement; this information should be a part of the account opening form.
18 Intimation regarding PMS fees and modes of payment or frequency of deduction. At the time of client signing the agreement; this information should be a part of the account opening form.
19 POA taken copy providing to client. Within 3 days of client request
20 Intimation to client about what all transactions can portfolio manager do using PoA. At the time of client signing the agreement; this information should be a part of the account opening form.
21 Explanation of risks involved in investment. At the time of client signing the agreement; this information should be a part of the account opening form.
22 Explanation of risks involved in investment. At the time of client signing the agreement; this information should be a part of the account opening form.
23 Intimation of tenure of portfolio investments. Indicative tenure should be disclosed at the time of client signing the agreement; this information should be a part of the account opening form.
24 Intimation clearly providing restrictions imposed by the investor on portfolio manager. Negative list of securities should be taken from the client at the time of client signing the agreement; this information should be a part of the account opening form.
25 Intimation regarding settling of client funds and securities. Settlement of funds and securities is done by the Custodian. The details of clients’ funds and securities should be sent to the clients in the prescribed format not later than on a quarterly basis.
26 Frequency of intimation of transactions undertaken in portfolio account. Not later than on a quarterly basis or upon clients' request.
27 Intimation regarding conflict of interest in any transaction. The portfolio manager should provide details of related party transactions and conflict of interest in the Disclosure Document which should be available on website of portfolio manager at all times.
28 Timeline for providing disclosure document to investor. The latest disclosure document should be provided to investors prior to account opening and the latest disclosure documents should be available on website of portfolio manager at all times.
29 Intimation to investor about details of bank accounts where client funds are kept. Within 3 days of PMS and demat account opening
30 Redressal of investor grievances Within 30 days, subject to all the information required to redress the complaint is provided by the complainant to the portfolio manager

Notes:

1. The number of days in the above timelines indicate clear working days

D. Details of grievance redressal mechanism and how to access it
  • It is mandatory for every PMS provider to register itself on SEBI SCORES (SEBI Complaint Redress System). SCORES is a centralised online complaint resolution system through which the complainant can take up his grievance against the PMS provider and subsequently view its status. (https://scores.gov.in/scores/Welcome.html )
  • The details such as the name, address and telephone number of the investor relations officer of the PMS provider who attends to the investor queries and complaint should be provided in the PMS Disclosure document.
  • The grievance redressal and dispute mechanism should be mentioned in the Disclosure Document.
  • Investors can approach SEBI for redressal of their complaints. On receipt of complaints, SEBI takes up the matter with the concerned PMS provider and follows up with them.
  • Investors may send their complaints to: Office of Investor Assistance and Education, Securities and Exchange Board of India, SEBI Bhavan. Plot No. C4A, ‘G’ Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051.
E. Expectations from the investors (Responsibilities of investors)
  • Check registration status of the intermediary from SEBI website before availing services.
  • Submission of KYC documents and application form in a timely manner with signatures in appropriate places and with requisite supporting documents.
  • Read carefully terms and conditions of the agreement before signing the same.
  • Thorough study of the Disclosure Documents of the PMS to accurately understand the risks entailed by the said investment in PMS.
  • Accurate and sincere answers given to the questions asked in the ‘Risk Questionnaire’ shall help the PMS provider properly assess the risk profile of the investor.
  • Thorough study of the quarterly statements sent by the PMS provider to the investor intimating him about the portfolio’s absolute and relative performance, its constituents and its risk profile.
  • Ensure providing complete details of negative list of securities as part of freeze instructions at the time of entering into PMS agreement and every time thereafter for changes, if any, in a timely manner.
  • To update the PMS provider in case of any change in the KYC documents and personal details and to provide the updated KYC along with the required proof.

Investor Charter –Investment Advisor

A. Vision and Mission Statements for investors

Vision:

Invest with knowledge & safety.


Mission:

Every investor should be able to invest in right investment products based on their needs, manage and monitor them to meet their goals, access reports and enjoy financial wellness.

B. Details of business transacted by the Investment Adviser with respect to the investors

  • To enter into an agreement with the client providing all details including fee details, aspect of Conflict of interest disclosure and maintaining confidentiality of information.
  • To do a proper and unbiased risk – profiling and suitability assessment of the client.
  • To obtain registration with Know Your Client Registration Agency (KRA) and Central Know Your Customer Registry (CKYC).  To conduct audit annually.
  • To disclose the status of complaints in its website.
  • To disclose the name, proprietor name, type of registration, registration number, validity, complete address with telephone numbers and associated SEBI regional/local Office details in its website.
  • To employ only qualified and certified employees.
  • To deal with clients only from official number
  • To maintain records of interactions, with all clients including prospective clients (prior to onboarding), where any conversation related to advice has taken place.

C. Details of services provided to investors (No Indicative Timelines)

    • Onboarding of Clients
    • Sharing of agreement copy
    • Completing KYC of clients
    • Disclosure to Clients
    • To provide full disclosure about its business, affiliations, compensation in the agreement.
    • To not access client’s accounts or holdings for offering advice.
    • To disclose the risk profile to the client.
  • To provide investment advice to the client based on the risk-profiling of the clients and suitability of the client.

D. Details of grievance redressal mechanism and how to access it

  • In case of any grievance / complaint, an investor should approach the concerned Investment Adviser and shall ensure that the grievance is resolved within 30 days.
  • If the investor’s complaint is not redressed satisfactorily, one may lodge a complaint with SEBI on SEBI’s 'SCORES' portal which is a centralized web based complaints redressal system. SEBI takes up the complaints registered via SCORES with the concerned intermediary for timely redressal. SCORES facilitates tracking the status of the complaint.
  • With regard to physical complaints, investors may send their complaints to: Office of Investor Assistance and Education, Securities and Exchange Board of India, SEBI Bhavan, Plot No. C4-A, ‘G’ Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051.

E. Expectations from the investors (Responsibilities of investors)

  • Do’s
    • Always deal with SEBI registered Investment Advisers.
    • Ensure that the Investment Adviser has a valid registration certificate.
    • Check for SEBI registration number.Please refer to the list of all SEBI registered Investment Advisers which is available on SEBI website in the following link: https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intm Id=13)
    • Pay only advisory fees to your Investment Adviser. Make payments of advisory fees through banking channels only and maintain duly signed receipts mentioning the details of your payments.
    • Always ask for your risk profiling before accepting investment advice. Insist that Investment Adviser provides advisory strictly on the basis of your risk profiling and take into account available investment alternatives.
    • Ask all relevant questions and clear your doubts with your Investment Adviser before acting on advice.
    • Assess the risk–return profile of the investment as well as the liquidity and safety aspects before making investments.
    • Insist on getting the terms and conditions in writing duly signed and stamped. Read these terms and conditions carefully particularly regarding advisory fees, advisory plans, category of recommendations etc. before dealing with any Investment Adviser.
    • Be vigilant in your transactions.
    • Approach the appropriate authorities for redressal of your doubts / grievances.
    • Inform SEBI about Investment Advisers offering assured or guaranteed returns.
    Don’ts
    • Don’t fall for stock tips offered under the pretext of investment advice.
    • Do not provide funds for investment to the Investment Adviser.
    • Don’t fall for the promise of indicative or exorbitant or assured returns by the Investment Advisers. Don’t let greed overcome rational investment decisions.
    • Don’t fall prey to luring advertisements or market rumors.
    • Avoid doing transactions only on the basis of phone calls or messages from any Investment adviser or its representatives.
    • Don’t take decisions just because of repeated messages and calls by Investment Advisers.
    • Do not fall prey to limited period discount or other incentive, gifts, etc. offered by Investment advisers.
    • Don’t rush into making investments that do not match your risk taking appetite and investment goals.
    • Do not share login credential and password of your trading and demat accounts with the Investment Adviser
    .

Investor Charter –Research Analyst

A. Vision and Mission Statements for investors.

Vision:

Invest with knowledge & safety.


Mission:

Every investor should be able to invest in right investment products based on their needs, manage and monitor them to meet their goals, access reports and enjoy financial wellness.

B. Details of business transacted by the Research Analyst with respect to the investors

  • To publish research report based on the research activities of the RA.
  • To provide an independent unbiased view on securities.
  • To offer unbiased recommendation, disclosing the financial interests in recommended securities.
  • To provide research recommendation, based on analysis of publicly available information and known observations.
  • To conduct audit annually.

C. Details of services provided to investors (No Indicative Timelines)

  • Onboarding of Clients
    • Disclosure to Clients
    • To distribute research reports and recommendations to the clients without discrimination.
  • To maintain confidentiality w.r.t publication of the research report until made available in the public domain.

D. Details of grievance redressal mechanism and how to access it

In case of any grievance / complaint, an investor should approach the concerned research analyst and shall ensure that the grievance is resolved within 30 days.

If the investor’s complaint is not redressed satisfactorily, one may lodge a complaint with SEBI on SEBI’s SCORES portal which is a centralized web based complaints redressal system. SEBI takes up the complaints registered via SCORES with the concerned intermediary for timely redressal. SCORES facilitates tracking the status of the complaint.

With regard to physical complaints, investors may send their complaints to: Office of Investor Assistance and Education, Securities and Exchange Board of India, SEBI Bhavan. Plot No. C4-A, ‘G’ Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051.

E. Expectations from the investors (Responsibilities of investors)

  • Do’s
    • Always deal with SEBI registered Research Analyst.
    • Ensure that the Research Analyst has a valid registration certificate.
    • Check for SEBI registration number.
    • Please refer to the list of all SEBI registered Research Analysts which is available on SEBI website in the following link: (https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes &intmId=14 )
    • Always pay attention towards disclosures made in the research reports before investing.
    • Pay your Research Analyst through banking channels only and maintain duly signed receipts mentioning the details of your payments.
    • Before buying securities or applying in public offer, check for the research recommendation provided by your research Analyst.
    • Ask all relevant questions and clear your doubts with your Research Analyst before acting on the recommendation.
    • Inform SEBI about Research Analyst offering assured or guaranteed returns.
    Don’ts
    • Do not provide funds for investment to the Research Analyst.
    • Don’t fall prey to luring advertisements or market rumours.
    • Do not get attracted to limited period discount or other incentive, gifts, etc. offered by Research Analyst.
    • Do not share login credentials and password of your trading and demat accounts with the Research Analyst.
    .

Investor Charter – Depository Participant
1. Vision:

Towards making Indian Securities Market - Transparent, Efficient, & Investor friendly by providing safe, reliable, transparent and trusted record keeping platform for investors to hold and transfer securities in dematerialized form.

2. Mission
  • To hold securities of investors in dematerialised form and facilitate its transfer, while ensuring safekeeping of securities and protecting interest of investors.

  • To provide timely and accurate information to investors with regard to their holding and transfer of securities held by them.

  • To provide the highest standards of investor education, investor awareness and timely services so as to enhance Investor Protection and create awareness about Investor Rights.

3. Details of business transacted by the Depository and Depository Participant (DP)

A Depository is an organization which holds securities of investors in electronic form. Depositories provide services to various market participants - Exchanges, Clearing Corporations, Depository Participants (DPs), Issuers and Investors in both primary as well as secondary markets. The depository carries out its activities through its agents which are known as Depository Participants (DP). Details available on the link https://www.cdslindia.com/DP/dplist.aspx / https://nsdl.co.in/dpsch.php

4. Description of services provided by the Depository through Depository Participants (DP) to investors

(1) Basic Services


Sr.No. Brief about the Activity / Service Expected Timelines for processing by the DP after receipt of proper documents
1 Dematerialization of securities 7 days
2 Rematerialization of securities 7 days
3 Mutual Fund Conversion / Destatementization 5 days
4 Re-conversion / Restatementisation of Mutual fund units 7 days
5 Transmission of securities 7 days
6 Registering pledge request 15 days
7 Closure of demat account 30 days
8 Settlement Instruction Depositories to accept physical DIS for pay-in of securities upto 4 p.m and DIS in electronic form upto 6 p.m on T+1 day

(2) Depositories provide special services like pledge, hypothecation, internet based services etc. in addition to their core services and these include


Sr.No. Type of Activity /Service Brief about the Activity / Service
1 Value Added Services Depositories also provide value added services such as
  1. Basic Services Demat Account (BSDA)
  2. Transposition cum dematerialization
  3. Linkages with Clearing System
  4. Distribution of cash and non-cash corporate benefits.
2 Consolidated Account statement (CAS) CAS is issued 10 days from the end of the month (if there were transactions in the previous month) or half yearly (if no transactions).
3 Digitalization of services provided by the depositories Depositories offer below technology solutions and e-facilities to their demat account holders through DPs:
  1. E-account opening
  2. Online instructions for execution
  3. e-DIS / Demat Gateway
  4. e-CAS facility
  5. Miscellaneous services

5. Details of Grievance Redressal Mechanism

(1) The Process of investor grievance redressal

Sr.No.
1 Investor Complaint/ Grievances Investor can lodge complaint/ grievance against the Depository/DP in the following ways:

a. Electronic mode -

The complaints/ grievances lodged directly with the Depository shall be resolved within 30 days.
2 Investor Grievance Redressal Committee of Depository If no amicable resolution is arrived, then the Investor has the option to refer the complaint/ grievance to the Grievance Redressal Committee (GRC) of the Depository. Upon receipt of reference, the GRC will endeavor to resolve the complaint/ grievance by hearing the parties, and examining the necessary information and documents.
3 Arbitration proceedings The Investor may also avail the arbitration mechanism set out in the Byelaws and Business Rules/Operating Instructions of the Depository in relation to any grievance, or dispute relating to depository services. The arbitration reference shall be concluded by way of issue of an arbitral award within 4 months from the date of appointment of arbitrator(s).

(2) For the Multi-level complaint resolution mechanism available at the Depositories


6. Guidance pertaining to special circumstances related to market activities: Termination of the Depository Participant



Sr.No. Type of special circumstances Timelines for the Activity/ Service
1
  • Depositories to terminate the participation in case a participant no longer meets the eligibility criteria and/or any other grounds as mentioned in the bye laws like suspension of trading member by the Stock Exchanges.
  • Participant surrenders the participation by its own wish.
  • Client will have a right to transfer all its securities to any other Participant of its choice without any charges for the transfer within 30 days from the date of intimation by way of letter/email.

    7. Dos and Don’ts for Investors


    8. Rights of investors


    9. Responsibilities of Investors

    Stock Brokers
    Investment Advisor
    Research Analyst
    Depository Participant
    Advisory – KYC Compliance
    INVESTOR EDUCATION AND PROTECTION FUND (IEPF)