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How to Protect Your Demat Account from Fraud? October 14 2022Stock Market Education

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Is Your Demat Account Safe from Fraud? 


Learn How to Safeguard Against Demat Account Fraud

Ever since the concept of demat account has been introduced by the Securities and Exchange Board of India (SEBI), it has been a game changer in stock trading. Dematerialised trading eliminated the risk of bad delivery, fake share certificates, delays, thefts and counterparty risk.

While demat account is definitely efficient, faster and hassle-free, no system is foolproof. Despite all efforts to strengthen the system, the number of fraudulent demat account incidences have increased in the last decade.

While more and more investors are being attracted to the stock market, most novice investors do not know how to protect themselves.

If you are among the investors who do not know what precautions to take to prevent demat account fraud, this article is for you. We have listed below a few easy steps that can help you substantially reduce the risk of a demat account fraud.

Ways to Protect your Demat Account from Fraud

· Safeguard your login details

It is crucial to keep your login information secure. It is advisable to keep a strong password or keep a biometric password. Try to remember the password and not write it anywhere to avoid the risk of unauthorised access. Furthermore, it is wise to change your login password at regular intervals.

· Freeze your Demat account when not in use

If you are travelling abroad or you know that you are not going to use your demat account for a while, it is recommended that you give a signed application to your depository participant to freeze your demat account in order to prevent the risk of phishing or scams.

Note: Even when you freeze your demat account, you continue to receive corporate actions like dividends, bonuses and splits.

· Keep track of your account statements

Just like you have a passbook for your bank account, you have DP holding and transaction statement for your demat account. A holding statement is a summary of all the shareholdings held in your Demat account on a particular date. A transaction statement is a summary of all the share credits and debits that take place in your demat account on a particular date.

Ensure that you keep your email id and phone number updated at all times and carefully review all the statements sent over email and SMS sent by the depository participant. It is a good practice to regularly match all the transactions in your demat account to your trading activity and if there is any discrepancy, immediately report it to the depository participant.

· Secure your Debit Instruction Slip (DIS) booklet

The DIS booklet for your demat account is equivalent to your bank cheque book. You are required to sign the DIS before transferring your shares from one demat account to another. Therefore, it is important to safeguard your Debit Instructions Slips at all times. Make sure that you do not leave your signed DIS booklet with your broker or anywhere else.

· Power of Attorney

If you are giving power of attorney to your broker, make sure you give a limited purpose power of attorney which will require your broker to take your permission before selling or transferring funds or securities from your demat account. In fact, you can anytime revoke the power of attorney without any notice except in the case of outstanding dues.

Conclusion

As the saying goes, “eternal vigilance is your best defence”, being vigilant and taking care of these small things can go a long way in improving your safety quotient. Protect your demat account by implementing these tips and safeguard yourself from demat account fraud.

Follow Indira Securities for more such valuable content. 

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Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
Dear Investor if you wish to revoke your un-executed eDis mandate, please mail us with ISIN and quantity on dp@indiratrade.com by today EOD."
REGISTRATION NOS:

INDIRA SECURITIES PVT.LTD. (SEBI REG.NO.):NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000 SEBI REG. NO.: INZ000188930, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG. NO.: IN-DP-90-2015, CIN : U67120MH1996PTC160201

DISCLAIMER:

"INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING."

INVESTORS GRIEVANCE

Shivkumar P. Email: compliance@indiratrade.com. Call : 0731-4797275

Investor grievance complaint : complaint@indiratrade.com

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