Broker RMS disallowing symbol for trading

#1
Hi ,

My broker allows certain symbols for purchase (different from SEBI / Exchange bans) . This is done by their RMS teams probably to protect investor interest . On discovering inability to place trade , I have to call broker contact , he contacts HO etc (whole lot of time waste and potential money loss) .

But I want to know
1. Do other brokers also do this .
2. Are there SEBI rules governing this aspect as to proactive communication with reasons .
3. If there are any rules , is anybody following it.
 
#2
Again, any feedback on this . There must be some SEBI rules to share this information pro-actively with customer (like weekly emails / regular refresh on their portal etc) along with legitimate reasons whereby purchase of Sym is disallowed but sell is not disallowed .
 

Tejas Khoday

Co-Founder & CEO, FYERS
#3
Hi ,

My broker allows certain symbols for purchase (different from SEBI / Exchange bans) . This is done by their RMS teams probably to protect investor interest . On discovering inability to place trade , I have to call broker contact , he contacts HO etc (whole lot of time waste and potential money loss) .

But I want to know
1. Do other brokers also do this .
2. Are there SEBI rules governing this aspect as to proactive communication with reasons .
3. If there are any rules , is anybody following it.
Hi @hitesh shah,

Brokers are at their discretion to provide trading access and can remove access/block certain scrips as per their policies. Usually, getting a proper reply from a traditional broker takes time because of their internal communication system and hierarchies involved. The HO is usually bombarded with calls from their sub-brokers and Relationship managers from other branches across India. The answer to your questions are as below:

1. Yes, other brokers block scrips/segments/exchanges too as they see fit (Reasons can be costs, Risk management etc).
2. Well, they're not violating any rules by disallowing scrips/segments. The exchange is more concerned with compliance standards of brokers.
3. We are compliant and follow the rules set by the regulators. We also publish the list of scrips available & blocked on our website.

Hope this answers your questions.

Happy Trading!
 
#4
Well answer is as per my imagination . However on a proactive note to ensure fairness and transparency , there must be proper mechanisam
1. to communicate members / share the information with members on their own on their portals
2. to trade independently fast (provided their safety/ margins are satisfied ) .

Just to cite a recent example RUCHISOYA was barred from purchase and sell was allowed . Now it is hitting upper circuits . All the RMS restrictions etc must be available to customers at least on self service basis.
 

Tejas Khoday

Co-Founder & CEO, FYERS
#5
Well answer is as per my imagination . However on a proactive note to ensure fairness and transparency , there must be proper mechanisam
1. to communicate members / share the information with members on their own on their portals
2. to trade independently fast (provided their safety/ margins are satisfied ) .

Just to cite a recent example RUCHISOYA was barred from purchase and sell was allowed . Now it is hitting upper circuits . All the RMS restrictions etc must be available to customers at least on self service basis.
Well, I can't comment on the proactiveness and fair practices of other brokers but what we do is put up the list of stocks/scrips on the basis of availability on our Margin calculators. We also show a list of blocked scrips by in each segment on this sheet. Our rationale is based on risk and liquidity and at times brokers have to take an immediate call. For instance, recently when our FM, Arun Jaitley suddenly announced that OMCs will need to bear an additional 1 rupee of the subsidy burden, IOC, BPCL, HINDPETRO, and others just collapsed 15%+ in less than 5 minutes. During such times, we must act instantly but the list will be updated EOD.
 
#6
Well, I can't comment on the proactiveness and fair practices of other brokers but what we do is put up the list of stocks/scrips on the basis of availability on our Margin calculators. We also show a list of blocked scrips by in each segment on this sheet. Our rationale is based on risk and liquidity and at times brokers have to take an immediate call. For instance, recently when our FM, Arun Jaitley suddenly announced that OMCs will need to bear an additional 1 rupee of the subsidy burden, IOC, BPCL, HINDPETRO, and others just collapsed 15%+ in less than 5 minutes. During such times, we must act instantly but the list will be updated EOD.
I definitely understand urgency / risk management / liquidity management. In no way these legitimate objectives must be hampered . But at the same time having proactive mechanisms for detecting such ad hoc blockades with brief rationale and timestamp lets traders also understand and appreciate these steps and it also bring greater transperancy and independence in the mechanisms.

Further these restrictions are good for day traders who dont have enough margins with brokers . But for traders who take deliveries and are covered with adequate margins with brokers , such restrictions without proper disclosure / redressal mechanisms are not helpful.