How investors can avoid stock broker defaults
Live MintStockbroker defaults are a cause of concern. Broker defaults on account of misuse of securities has been mainly due to the power of attorney given by investors to the brokers. Misuse of idle funds of investors has been another reason for broker defaults. Also, investors should not keep idle funds with the stock broker as claims for these funds in the event of misuse are not accepted by the stock exchanges in case of a broker default. Investors can do this by following certain checks such as ensuring their KYC details are up to date, ratifying the emails/SMSs sent by exchanges pertaining to their trades with the contract notes received from the broker, and promptly checking the funds and securities balance statement sent by the exchanges on a weekly basis.
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