The Calcutta Stock Exchange
Guide for Investors
To educate and create awareness among investors
  1. Introduction
  2. Department of Investor Services
  3. Safeguards for Investors
  4. Rights of Investors
  5. General Do’s & Don’ts for Investors
  6. Brokerage & Stamp Duty
  7. Investor Awareness & Education
  8. Contact

Introduction

The Calcutta Stock Exchange Limited, located at 7, Lyons Range, Kolkata 700 001, is the second largest bourse in India, was corporated in 1908. CSE provides an efficient market, upholding the interests of the investors. It strives to educate and enlighten the investors by making the necessary information available to them. All market related information is available on its website (www.cse-india.com).

Department of Investor Services

Protecting the interest of the investors dealing in securities is one of the main objectives of CSE. In pursuit of this objective, Department of Investor Services was set up in 2000. The grievances of investors against listed companies and CSE Trading Members are redressed by CSE. CSE also assists in the arbitration process both, between Trading Members inter-se and between Trading Members and non - Trading Members. The capital market can grow only when investors find it safe for them to invest and they are assured that the rules governing the market are fair and just to all the players. With a view to ensure speedy and effective resolution of claims, differences and disputes between Trading Members inter-se and between Trading Members and non - Trading Members, CSE has laid down a set of procedures for arbitration thereof. These procedures are duly embodied in the Rules, Bye-laws and Regulations of CSE, which have been duly approved by the Government of India / Securities and Exchange Board of India (SEBI).

Safeguards' for Investors'

These are some of the safeguards the investors should keep in mind before trading in the securities market.

  • Selecting a Broker/ Sub - Broker

Deal only with a SEBI registered Broker / Sub - broker after due diligence. Details of the CSE Brokers can be obtained from the Member's List published by CSE and from the website: www.cse-india.com 

  • Entering into an Agreement

      Fill in a Client registration form with the Broker / Sub – broker

  • Enter into Broker / Sub - broker - Client Agreement.

This agreement is mandatory for all investors for registering as a client of a CSE Trading Member. Ensure the following before entering into an agreement:

Carefully read and understand the terms and conditions of the agreement before executing the same on a valid stamp paper of the requisite value.

Agreement to be signed on all the pages by the Client and the Member or their representative who has the authority to sign the agreement. Agreement has also to be signed by the witnesses by giving their names and addresses.

Please note that Regulatory Authorities have not stipulated for execution of any document other than Broker/ Sub - Broker / Client Agreement.

Transacting

  1. Specify to the Broker / Sub - broker, the exchange through which your trade is to be executed and maintain separate account for each exchange.
  2. Obtain a valid Contract Note from the Broker / Sub-broker within 24 hours of the execution of the trade.

    Contract note is a confirmation of trades done on a particular day for and on behalf of a client in a format prescribed by CSE. It establishes a legally enforceable relationship between the Trading Member and his Client in respect of settlement of trades executed on CSE as stated in the Contract Note.

    Contract Notes are made in duplicate, and the Trading Member and Client, both keep one copy each. The Client is expected to sign on the duplicate copy of the Contract Note, confirming receipt of the original.
  3. Contract Note - Form 'A' - Contract Note issued where Member is acting for constituents as brokers/ agents.
  4. Contract Note - Form 'B' - Contract Note issued by Members dealing with constituents as principals.

Ensure that the Contract Note contains:

SEBI registration number of the Trading Member/ Sub – broker

Details of trade such as, Order no, trade no., trade time, quantity, price, brokerage, settlement number, details of other levies. 

Trade price should be shown separately from the brokerage charged.

The maximum brokerage that can be charged is Rs. 0.25 per share/debenture or 2.5% of the contract price per share / debenture whichever is higher. This maximum brokerage is inclusive of the brokerage charged by the sub-broker (Sub-brokerage cannot exceed 1.5% of the contract price.) Any additional charges that a Trading Member can charge are Service Tax on the brokerage, any penalties arising on behalf of client and Securities Transaction Tax (STT).     

The brokerage, service tax and STT are required to be indicated separately in the Contract Note.

Signature of authorized representative

Arbitration clause stating that the Courts in Kolkata shall have exclusive jurisdiction in respect of all proceedings to which the Exchange is a party, and in respect of all other proceedings, the Courts having jurisdiction over the area in which the respective Regional Arbitration Centre is situated, shall have jurisdiction, must be present on the face of the Contract note.

Settlement

  1. Ensure delivery of securities / payment of money to the broker immediately upon getting the Contract Note for sale / purchase but in   any case, before the prescribed pay-in-day.
  2. Member should pay the money or securities to the investor within 24 hours  of the payout.
  3. Open a demat account.
  4. Opt for buying and selling shares in demat form.
  5. For delivery of shares from demat account, give the Depository Participant (D P) 'Delivery out' instructions to transfer the same from the beneficiary account to the pool account of broker through whom shares and securities have been sold.
    The following details to be given to the DP: details of the pool a/c of broker to which the shares are to be transferred, details of scrip, quantity etc. As per the requirement of depositories the 'Delivery out' Instruction should be given at least 48 hours prior to the cut-off time for the prescribed securities pay-in.
  6. For receiving shares in your demat account, give the Depository Participant (D P) 'Delivery in' instructions to accept shares in beneficiary account from the pool account of broker through whom shares have been purchased.
  7. If physical deliveries are received check the deliveries received as per Good/Bad delivery guidelines issued by SEBI.
  8. Bad delivery cases should be sorted out through CSE mechanism immediately.
  9. Ensure that all registration of physical shares for ownership by transfer should be executed by a valid, duly completed and stamped transfer deed.

Rights of Investors

  1. To receive all benefits/ material information declared for the investors by the Company.
  2. Prompt services from the Company such as transfers, Sub-divisions and consolidation of holdings in the Company.
  3. As an equity holder have a right to subscribe to further issue of capital by the Company.
  4. Brokerage not to exceed 2.5% of the contract price.
  5. Receipt of the Contract Note from the broker in the specified format showing transaction price, brokerage, Service Tax and STT, separately.
  6. Expect delivery of shares purchased/value of shares sold within 24 hours from pay-out.
  7. To receive all benefits/ material information declared for the investors by the Company.
  8. Prompt services from the Company such as transfers, Sub-divisions and consolidation of holdings in the Company.
  9. As an equity holder have a right to subscribe to further issue of capital by the Company.
  10. Brokerage not to exceed 2.5% of the contract price.
  11. Receipt of the Contract Note from the broker in the specified format showing transaction price, brokerage, Service Tax and STT, separately.
  12. Expect delivery of shares purchased/value of shares sold within 24 hours from pay-out.
  13. Get unique codes UCC and ensure that trades are executed only under the UCC.          

Obligation of investors

  1. Execute Know Your Client (KYC) documents
  2. Read Risk Disclosure Document
  3. Verify trades and pay margins
  4. Ensure payment of securities and funds for settlement
  5. Verify the contract notes and fund transaction statements
  6. Verify the DP statement for movement of securities

JURISDICTION OF COURTS

The Courts in Kolkata shall have exclusive jurisdiction in respect of all proceedings to which the Exchange is a party, and in respect of all other proceedings, the Courts having jurisdiction over the area in which the respective Regional Arbitration Centre is situated, shall have jurisdiction.

General Do's and Don’ts for Investors

More and more investors are investing / trading in the stock markets than ever before. It is therefore imperative for the investors to follow some DO’s and DON'Ts while dealing in the stock market.

Some general DO’s and DON'Ts for investors are given here:

DO’s

  1. Always deal with the market intermediaries registered with SEBI / stock exchanges.
  2. Collect photocopies of all documents executed for registration as a client, immediately on its execution. Ensure that the documents or forms for registration as Client are fully filled in.
  3. Give clear and unambiguous instructions to your broker / agent / depository participant.
  4. Always insist on contract notes from your broker. In case of doubt in respect of the transactions, verify the genuineness of the same on the CSE website.
  5. Always settle the dues through the normal banking channels with the market intermediaries.
  6. Before placing an order with the market intermediaries, please check about the credentials of the companies, its management, fundamentals and recent announcements made by them and various other disclosures made under various regulations. The sources of information are the websites of Exchanges and companies, databases of data vendor, business magazines etc.
  7. Adopt trading / investment strategies commensurate with your risk-bearing capacity as all investments carry some risk, the degree of which varies according to the investment strategy adopted.
  8. Carry out due diligence before registering as client with any intermediary. Carefully read and understand the contents stated in the Risk Disclosure Document, which forms part of the investor registration requirement for dealing through brokers.
  9. Be cautious about stocks which show a sudden spurt in price or trading activity, especially low price stocks.
  10. There are no guaranteed returns on investment in the stock market.
  11. Always keep copies of all investment documentation (e.g. application forms, acknowledgements slips, contract notes).
  12. Always keep copies of documents you are sending to companies, Trading Member, Registrar and Transfer Agent, etc.
  13. Send important documents by a reliable mode (preferably through registered post) to ensure delivery.
  14. Ensure that you have money before you buy.
  15. Ensure that you are holding securities before you sell.
  16. Follow up diligently and promptly e.g. If you do not receive the required documentation within a reasonable time, contact the concerned person; i.e. the Trading Member, company etc., immediately.
  17. Mention clearly whether you want to transact in physical mode or in demat mode.
  18. Lodge your complaint or Arbitration Application against the Trading Member, at the concerned Regional Arbitration Centre, by confirming geographical jurisdiction. Please use for the purpose, your address as intimated to your Trading Member by following due process of law. The details of geographical jurisdiction of each Regional Arbitration Centre are also available on the Contract Note.              
    The period consumed in redressal of complaint thru IGRC services will not be considered while measuring period of ‘limitation’ in filing arbitration application provided the complaint and / or arbitration application is / are filed at the concerned Regional Arbitration Centre.
  19. Lodge your complaint against a company listed on CSE, at the concerned Regional Arbitration Centre, by confirming geographical jurisdiction. Please use your address for deciding the geographical jurisdiction. This will enable to process the complaint expeditiously.
  20. Be careful and specify the rights  when you execute the Power of Attorney (POA) documents


DON’Ts

  1. Don't deal with unregistered brokers / sub - brokers, or other unregistered intermediaries. 
  2. Don't execute any documents with any intermediary without fully understanding its terms and conditions. 
  3. Don’t file your grievance/s and / or arbitration application against trading member, in the Regional Arbitration Centre having no geographical jurisdiction over the matter. Please use for the purpose, your address as intimated to your Trading Member by following due process of law.
  4. The Exchange redresses investors’ complaints thru arbitration and IGRC mechanism, which are quasi-judicial in nature. The period consumed in redressal of complaint thru IGRC will not be considered while measuring period of ‘limitation’ in filing arbitration application provided the complaint is filed at the concerned Regional Arbitration Centre.
  5. Don’t file your grievance /s against companies listed on CSE, in the Regional Arbitration Centre having no geographical jurisdiction over the matter, for its expeditious redressal. Please use your address for deciding the geographical jurisdiction.
  6. Don't deal based on rumours or 'tips'.
  7. Don't fall prey to promises of guaranteed returns.
  8. Don't get misled by companies showing approvals / registrations from Government agencies as the approvals could be for certain other purposes and not for the securities you are buying.
  9. Don't leave the custody of your Demat Transaction slip book in the hands of any intermediary.
  10. Don't forgo obtaining all documents of transactions, in good faith even from people whom you know.
  11. Don't forget to take note of the risks involved in an investment.
  12. Don't get misled by guarantees of repayment of your investments through post-dated cheques.
  13. Don't hesitate to approach concerned persons and then the appropriate authorities.
  14. Don't get swayed by promises of high returns. 
  15. Don't get carried away with advertisements about the financial performance of companies in print and electronic media.
  16. Don't blindly follow media reports on corporate developments, as some of these could be misleading.
  17. Don't blindly imitate investment decisions of others who may have profited from their investment decisions.
  18. Do not share your passwords with any one and remember to change your password periodically.

Brokerage & Stamp Duty

CSE has not prescribed any minimum brokerage, and hence the same is negotiable. Though the maximum brokerage allowed is 2.5% percent of the contract price, the brokerage generally charged by the Members is much lower. A Member may have different scales of brokerages for delivery transactions, trading transactions and the like.

The present duty for equity shares transfer is 25paise for every Rs.100 or part thereof, on the amount of consideration while the duty for transfer of debentures varies from state to state, applicable on the basis of the location of the registered office of the concerned issuing company.

Investor Awareness Program & Education

  1. Investor Awareness Programs are being regularly conducted by CSE at various places in Bengal to educate the investors and to create awareness among the investors regarding the capital market and in particular the working of the stock exchanges.
  2. The Investor Awareness Programs cover topics like DO’s and DON'Ts for investors, Instruments of Investment, Portfolio approach,  Trading, Clearing and Settlement, Rolling Settlement, Investors' Protection Fund, Trade Guarantee Fund, Dematerialization of Shares, Debt Market, Investors' Grievance Redressal system available with SEBI, CSE & Company Law Board, information on Sensex and other Indices, Derivatives etc.

Contact

CSE's official Website: www.cse-india.com which is the focal point for information dissemination. It updates the investors with the latest information on the stock market on a daily basis through real time updation of statistical data on market activity, corporate information and results.

Contact Persons:

            Mrs. Sripriya Senthilkumar               9836900227

            Mr. Sumit Sengupta                           9836900215