Steps to Start Online Trading in India
Steps to Start Online Trading in India
Steps to Start Online Trading in IndiaBefore Online Trading
You require 3 sets of accounts to start online trading in India a bank account, an online account with a stock broker and a Beneficial Owner Account that is to be opened with a Depository participant. Online share dealing is offered by banks and online stock trading firms.
Forms
When you open an account with an online trading broker, you have to fill up various forms such as Know Your Client Form, Risk Disclosure Agreement, agreements for trading on different bourses like the BSE and NSE and specific power of attorney rights given to the broker. The Know Your Client Form will include details such as your financial worth and contact details and needs to be accompanied by Residence Proof, Identity Proof, and PAN card. You are also required to get your photograph attested by your banker. For verification, you will have to produce all documents in their original forms. The separate agreements for trade on BSE and NSE between stock broker and clients are mandatory according to the rules of SEBI. In case you want to do online trading through a sub broker, you will have to sign on a tripartite agreement reached between you (the client), the share broker and the sub share broker. This will allow you to participate only in cash market trades. To deal on the derivatives market, you will require a different bipartite agreement. An important document you will sign is the Risk Disclosure Document which explains the various risks involved in online trading which will be your responsibility. It also explains measures to reduce risks which you can make use of.
After Submission of Online Trading Forms
The broker will scrutinize your documents and if they are found to be proper, allot you a client code, login ID and password which you should alter after you have logged in. Once you pay the stipulated margin money to the broker, you can start transactions.
To know more about Clearing Services, kindly visit:
http://www.smcindiaonline.com/online-trading.aspx
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