Q. What are the additional charges other than brokerage that can be levied on the investor?
A. The trading member can charge:
- Securities Transaction Tax.
- Service tax as applicable.
- Transaction charges levied by NSE, Stamp duty and other charges directly attributable to the transaction.
Note : The brokerage and service tax is indicated separately in the contract note.
Q. How are margins paid?
A. Exchange prescribes margin rules from time to time, which currently are calculated on the Value at Risk model. Margins are to be paid by the investor before placing the order.
Q. What are the rights of the investor?
A. The right to get –
Proof of price/brokerage charged, Money/shares on time, Statement of Accounts and Contract Note from trading member.
Q. What are the obligations of the investor?
A. The obligation to –
Sign a proper Member-Constituent Agreement
Possess a valid contract or purchase/sale note
Deliver securities & make payment on time
Provide Margin before trade
Q. What are the various kinds of accounts that I need to trade via Internet?
A. Three kinds of accounts are required to be able to trade on-line. They are:
- E-Broking account with Broker Securities Limited
- Depository Participant (DP) account with Broker Securities Limited
- Bank account which has developed an interface with “Broker Securities Limited” i.e. designated banks like HDFC Bank, UTI Bank, Citi Bank.
Q. What are the tax implications of investing in Indian equities?
A. Tax rates on investments gains are categorized as long term & short term capital gains.
- Long term capital gains Long Term investments that are held for more than 12 months are termed as long term capital assets. Profit on sale of such assets is termed as long term capital gain (LTCG) which as per the latest Budget notification will attract nil tax.
- Short term capital gains Shares that are held for less than 12 months are classified as short term capital assets which as per the latest Budget notification will attract 10% tax.
Q. Who is a Portfolio Manager?
A. Any person who pursuant to a contract or arrangement with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary portfolio manager or otherwise) the management or administration of a portfolio of securities or the funds of the client, as the case may be is a Portfolio Manager. Broker is also a SEBI Registered Portfolio Manager that offers Discretionary Portfolio Management Services.