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The article primarily consists of regulatory disclosures, risk warnings, and investor advisories provided by Upstox Securities Pvt. Ltd. and related entities. It serves as a comprehensive disclaimer outlining the potential risks associated with investing in the securities market, particularly in derivatives and mutual funds. The initial sections detail the SEBI registration numbers, TM codes, CIN, contact information for compliance officers, and registered addresses for Upstox Securities and RKSV Commodities. It also provides information on how to file complaints on the SEBI SCORES portal, emphasizing the importance of registering on the portal and providing mandatory details such as name, PAN, address, mobile number, and email ID for effective communication and speedy redressal of grievances. The notice explicitly advises investors to carefully read the Risk Disclosure Document prescribed by SEBI, along with Upstox's Terms of Use and Privacy Policy, before engaging in any investment activities. Further emphasis is placed on the subsidiary and associate relationships between Upstox Securities, RKSV Securities India, and RKSV Commodities India, establishing the corporate structure and affiliations within the organization.
A significant portion of the article is dedicated to highlighting the inherent risks in the securities market. It begins with a general disclaimer stating that investment in securities is subject to market risks and advises readers to carefully review all related documents before investing. The text then dives into specific risk disclosures related to derivatives trading, particularly futures and options. It highlights that a substantial majority (9 out of 10) of individual traders in equity Futures and Options Segment incurred net losses. The magnitude of these losses is quantified, stating that loss makers registered net trading losses close to ₹ 50,000 on average. In addition to these direct trading losses, the article points out that loss makers expended an additional 28% of their net trading losses as transaction costs. Conversely, those who made net trading profits still incurred significant transaction costs, ranging from 15% to 50% of their profits. This section serves as a stark warning about the potential for significant financial losses when trading in derivatives and underscores the importance of understanding the associated risks.
The article also addresses risks associated with mutual fund investments. It cautions that top-rated funds do not constitute investment advice and urges investors to carefully read the offer documents before investing. Upstox explicitly states that it will not accept any liability arising out of investor's investments in mutual funds. This section clarifies that Upstox acts as a distributor for these products, which are not exchange-traded, and that disputes related to distribution activity will not have access to the Exchange investor redressal forum or Arbitration mechanism. This limitation of liability and access to dispute resolution mechanisms is crucial for investors to understand before investing in mutual funds through Upstox. The overall purpose of this section is to ensure that investors understand the nature of the product, the associated risks, and the limitations of Upstox's responsibility.
The investor advisory section is designed to protect investors from fraudulent schemes and risky trading practices. It refers to NSE, BSE, and MCX circulars cautioning investors against unauthorized collective investments, portfolio management schemes, and guaranteed or fixed return offers. The article explicitly warns investors against sharing trading credentials (login IDs, passwords, OTPs), trading strategies, and position details. It also advises against trading in leveraged products or derivatives like options without proper understanding, emphasizing that such activities can lead to significant losses. Furthermore, the advisory cautions against writing or selling options or trading in option strategies based on tips without basic knowledge of the product and its risks. Dealing in unsolicited tips through platforms like WhatsApp, Telegram, Instagram, YouTube, Facebook, SMS, and calls is strongly discouraged, as is trading or trading in options based on recommendations from unauthorized or unregistered investment advisors and influencers. This section is a comprehensive guide to avoiding common pitfalls and protecting oneself from financial fraud and unnecessary risk.
Finally, the article directs readers to the Advisory Guidelines For Investors prescribed by the Exchange regarding investor awareness and safeguarding client’s assets, referencing a circular dated 27th August, 2021. It also points investors to an advisory prescribed by the Exchange regarding the updation of mandatory KYC fields by March 31, 2022, as per a circular dated January 14, 2022. These references to specific circulars and guidelines from regulatory bodies such as NSE, BSE, and MCX demonstrate Upstox's commitment to regulatory compliance and investor protection. By providing links to these resources, Upstox encourages investors to stay informed and take proactive steps to safeguard their investments. In summary, the article functions primarily as a multi-faceted risk disclosure and investor advisory, encompassing regulatory information, risk warnings, and cautionary advice. It serves as a crucial resource for investors using the Upstox platform, promoting responsible investing and mitigating potential financial losses through informed decision-making and adherence to regulatory guidelines. The overall message is one of caution and the need for thorough understanding before engaging in any form of trading or investment.
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