Stock Broker: Market regulator SEBI recently cancelled the registration of 39 stock brokers, 7 commodity brokers and 22 depository participants. Action was taken against all of them for misusing the registration and to protect investors from risk. In such a situation, investors who invest through these brokers also find themselves in a strange situation. If you have invested with any of these brokers, then it is natural to worry about the funds. However, cancellation of their registration does not mean that your investment is also at risk. Today we are going to give you information on how you can protect yourself from SEBI’s action against stock brokers.
SEBI had taken action against these brokers
SEBI had taken action against stock brokers like Bezel Stock Brokers, Reflection Investments and Sumpoorna Portfolio a few days ago. Along with this, the registration of commodity brokers like Wealth Mantra Commodities and Sumpoorna Comtrade was cancelled. Apart from this, depository participants like Moongipa Investments and Punjab & Maharashtra Co-operative Bank were also affected by SEBI’s action.
What does this mean for investors
According to a Business Standard report, the main objective of SEBI’s action is to protect investors by stopping these brokers from working. Since these brokers were not members of any stock exchange, they did not fulfill the conditions required for SEBI registration. If your broker’s registration is also cancelled, then it becomes very important to stop all business activities with them and not make any further deposits. You should immediately contact the broker to withdraw your money. Also, you should make arrangements to transfer your securities to another broker.
This is how SEBI protects investors
SEBI ensures that the broker maintains all the records even after deregistration. Also, it resolves all the problems of the investors. Apart from this, it either returns the funds and securities to the investor or transfers them to another registered broker. In case of any problem, you can also contact SEBI.
Investors should take these steps to protect themselves
To avoid such problems, choose a reliable broker. You should find out whether it is a discount broker or a full-service broker. Discount brokers can save your fees, but full-service brokers are associated with strong financial institutions. They can provide you more security. Investors should constantly pay attention to their trading.
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