TMI BlogRisk Disclosure Document.X X X X Extracts X X X X X X X X Extracts X X X X ..... igned by their clients. 3. The Stock Exchanges are directed to 3.1. make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision immediately. 3.2. bring the provisions of this circular to the notice of the member brokers/clearing members of the Exchange and also to disseminate the same on the website. 3.3. communicate to SEBI, the status of the implementation of the provisions of this circular in Section II, item no. 13 of the Monthly Development Report for the month of October 2003. 4. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with Section 10 of the Securities Contracts (Regulation) Act 1956, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. Yours faithfully, V S SUNDARESAN Encl:- a/a RISK DISCLOSURE DOCUMENT This document is issued by the National Stock Exchange of India (hereinafter referred to as NSE ) in coordination with the Securities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time to time and Circulars as may be issued by NSE or its Clearing Corporation and in force from time to time. NSE does not provide or purport to provide any advice and shall not be liable to any person who enters into any business relationship with any trading member and/or sub-broker of NSE and/or any third party based on any information contained in this document. Any information contained in this document must not be construed as business advice/investment advice. No consideration to trade should be made without thoroughly understanding and reviewing the risks involved in such trading. If you are unsure, you must seek professional advice on the same. In considering whether to trade or authorize someone to trade for you, you should be aware of the following:- 1. BASIC RISKS INVOVLED IN TRADING ON THE STOCK EXCHANGE (EQUITY AND OTHER INSTRUMENTS) 1.1 Risk of Higher Volatility: Volatility refers to the dynamic changes in price that securities undergo when trading activity continues on the Stock Exchange. Generally, higher the volatility of a security, greater is its price swings. There may be normally greater volatility in thinl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the customer may receive a prompt execution of a market order, the execution may be at available prices of outstanding orders, which satisfy the order quantity, on price time priority. It may be understood that these prices may be significantly different from the last traded price or the best price in that security. 1.4.2 A limit order will be executed only at the limit price specified for the order or a better price. However, while the customer receives price protection, there is a possibility that the order may not be executed at all. 1.4.3 A stop loss order is generally placed away from the current price of a stock, and such order gets activated if and when the stock reaches, or trades through, the stop price. Sell stop orders are entered ordinarily below the current price, and buy stop orders are entered ordinarily above the current price. When the stock reaches the pre-determined price, or trades through such price, the stop loss order converts to a market/limit order and is executed at the limit or better. There is no assurance therefore that the limit order will be executable since a stock might penetrate the pre-determined price, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1 For rights and obligations of the clients, please refer to Annexure-1 enclosed with this document. 2.2 The term constituent shall mean and include a client, a customer or an investor, who deals with a trading member for the purpose of acquiring and/or selling of securities through the mechanism provided by NSE. 2.3 The term trading member shall mean and include a member, a broker or a stock broker, who has been admitted as such by NSE and who holds a registration certificate as a stock broker from SEBI. NOTE:- The words National Stock Exchange of India Ltd. , NSE and other references, , such as, web-site, etc., need to be suitably replaced by the respective stock exchanges while preparing their own risk disclosure document. ANNEXURE-1 INVESTORS RIGHTS AND OBLIGATIONS: 1.1 You should familiarise yourself with the protection accorded to the money or other property you may deposit with your trading member, particularly in the event of a default in the stock market or the broking firm s insolvency or bankruptcy. 1.1.1 Please ensure that you have a documentary proof of your having made dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.3.6 Ensure that a contract note is issued to you by the trading member which contains minute records of every transaction. Verify that the contract note contains details of order no., trade number, trade time, trade price, trade quantity, name of security, client code allotted to you and showing the brokerage separately. Contract notes are required to be given/sent by the trading member to the investors latest on the next working day of the trade. Contract note can be issued by the trading members either in electronic form using digital signature as required, or in hard copy. In case you do not receive a contract note on the next working day or at a mutually agreed time, please get in touch with the Investors Grievance Cell of NSE. 1.3.7 Facility of Trade Verification is available on NSE website (www.nse-india.com), where details of trade as mentioned in the contract note may be verified from the trade date upto five trading days. Where trade details on the website, do not tally with the details mentioned in the contract note, immediately get in touch with the Investors Grievance Cell of NSE. 1.3.8 Ensure that payment/delivery of securities against sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant Rules/ Bye-laws and the scheme under the Investors Protection Fund (IPF) may be payable first out of the amount vested in the Committee for Settlement of Claims against Defaulters, on pro-rata basis if the amount is inadequate. The balance amount of claims, if any, to a maximum amount of ₹ 10 lakhs per investor claim, per defaulter/expelled member may be payable subject to such claims being found payable under the scheme of the IPF. Notes: 1. The term constituent shall mean and include a client, a customer or an investor, who deals with a trading member of NSE for the purpose of acquiring and / or selling of securities through the mechanism provided by NSE. 2. The term trading member shall mean and include a member or a broker or a stock broker, who has been admitted as such by NSE and who holds a registration certificate as a stock broker from SEBI. NOTE:- The words National Stock Exchange of India Ltd. , NSE and other references, such as, web-site, etc., need to be suitably replaced by the respective stock exchanges while preparing their own risk disclosure document. - Circular - Trade Notice - Public Not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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