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The article presented is primarily a lengthy disclaimer and risk disclosure notice from Upstox Securities Pvt. Ltd. and related entities. It functions as a compliance document mandated by the Securities and Exchange Board of India (SEBI) and other regulatory bodies to inform potential and existing investors about the risks associated with trading in securities markets. The document meticulously outlines various registration details, contact information for compliance officers, and addresses for both the registered and correspondence offices of the involved companies. This information serves to establish the legitimacy of the Upstox platform and provide avenues for investors to seek redressal or clarification regarding their investments. The inclusion of specific registration numbers like the SEBI Registration No., NSE TM Code, BSE TM Code, and CDSL Reg No., lends credibility to the platform and ensures adherence to regulatory standards. Furthermore, providing contact details for the Compliance Officer allows investors to directly raise concerns or report any discrepancies they may encounter while using the platform. The article also includes a detailed procedure for filing complaints on the SEBI SCORES platform, emphasizing the importance of registering on the portal and providing mandatory details such as Name, PAN, Address, Mobile Number, and E-mail ID. This guidance empowers investors to effectively communicate their grievances and seek timely resolution. The benefits of using the SCORES platform, including effective communication and speedy redressal, are highlighted to encourage investors to utilize this resource. The document repeatedly stresses the importance of carefully reading the Risk Disclosure Document as prescribed by SEBI, along with the Terms of Use and Privacy Policy of Upstox. This emphasis underscores the responsibility of investors to educate themselves about the inherent risks involved in securities trading and understand the terms and conditions governing their use of the Upstox platform. This is a crucial step in mitigating potential misunderstandings and ensuring informed decision-making. The disclaimer further clarifies the relationship between Upstox Securities Private Limited, RKSV Securities India Private Limited, and RKSV Commodities India Private Limited, explicitly stating that Upstox Securities Private Limited is a wholly-owned subsidiary of RKSV Securities India Private Limited, and RKSV Commodities India Private Limited is an associate of RKSV Securities India Private Limited. This disclosure ensures transparency and helps investors understand the corporate structure and potential conflicts of interest that may arise. The core of the document revolves around mitigating risk and educating investors about the potential pitfalls of the securities market. It emphatically states that 'Investment in securities market are subject to market risks, read all the related documents carefully before investing.' This is a standard disclaimer, but its repetition reinforces the importance of investor vigilance. It also clearly states that 'Brokerage will not exceed the SEBI prescribed limit,' ensuring compliance with regulatory guidelines regarding brokerage charges. The disclaimer provides alarming statistics regarding losses incurred by individual traders in equity Futures and Options segments, explicitly stating that '9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.' It also quantifies the average net trading loss incurred by loss makers (close to ₹ 50,000) and highlights the additional burden of transaction costs (28% of net trading losses). Furthermore, it points out that even those making net trading profits incur significant transaction costs (between 15% to 50% of such profits). These statistics paint a stark picture of the risks associated with derivative trading and serve as a cautionary tale for potential investors. The document addresses the specific case of mutual funds, clarifying that 'Top rated funds do not constitute any advice' and that 'Upstox shall not accept any liability arising out of your investments.' This disclaimer protects Upstox from liability arising from investment decisions made based on fund ratings. The article makes clear that the company acts as a distributor for non-exchange traded products and states that disputes concerning distribution activities won’t have access to exchange investor redressal forums or arbitration mechanisms. This clarifies the company’s limited role and liabilities in such cases.
The document contains very direct advisories for investors based on NSE, BSE, and MCX circulars. Investors are cautioned to avoid unauthorized collective investments/portfolio management schemes and schemes that promise indicative, guaranteed, or fixed returns. This direct warning protects investors from falling prey to fraudulent schemes that often lure them with unrealistic promises of high returns. Several unsafe investor practices are highlighted. These include: sharing trading credentials (login id & passwords including OTP’s), trading strategies, and position details. The sharing of such sensitive information can expose investors to significant risks and potential financial losses. Another warning states not to trade in leveraged products /derivatives like Options without proper understanding, as it could lead to losses. A specific case of writing/ selling options or trading in option strategies based on tips, without basic knowledge & understanding of the product and its risks is advised against. These are all common traps for inexperienced investors, therefore the article emphasizes the importance of financial literacy. Investors are cautioned about dealing in unsolicited tips through platforms like Whatsapp, Telegram, Instagram, YouTube, Facebook, SMS, calls, etc. This is a crucial warning as unsolicited tips are often part of pump-and-dump schemes designed to manipulate stock prices for the benefit of insiders. They are also warned about acting on recommendations from unauthorised / unregistered investment advisors and influencers. These advisors often lack the necessary qualifications and may provide biased or misleading advice for their own personal gain. The article advises the reader to carefully read Advisory Guidelines For Investors as prescribed by the Exchange with reference to their circular dated 27th August, 2021 regarding investor awareness and safeguarding client’s assets. This directs investors to official resources for more comprehensive guidance. Finally, the advisory from the Exchange dated January 14, 2022 is referenced, advising Updation of mandatory KYC fields by March 31, 2022. This demonstrates the ongoing efforts to improve investor safety and transparency in the securities market. In totality, this is a regulatory document with a core intent to shield Upstox from legal liability as the result of investment decisions made on their platform, while providing legally-mandated guidance and disclosure information required by SEBI and other regulatory bodies. The overall effect of this article is to alert potential traders of the risks and liabilities associated with the stock market. It is not designed to be a comprehensive analysis, but rather a preventative measure.