With so many brokers going bust these days, it is scary to trust any broker no matter how big or trusted they are. Currently I am broking with Zerodha but there are many brokers that are sending me messages about the next wave of collapse in discount broking houses.
With recent fall of reputed names like Karvy etc I would like to know the following broker agnostic information:
If I hold account with XYZ broker and these have been delivered shares in my DMAT a/c like CDSL/NSDL shouldn’t that be safe even if broker collapses ?
Can any broker sell shares in my DMAT without my consent at any given point in time ?
If I have idle cash in my broking account can broker use it without my consent ?
In general no one knows the financial health of any broker. What’s the best way to secure your holdings if there are any?
They will be safe even if broker is busted, make sure to update your details correctly so even if shares are moved in and out you will receive direct sms from depositories.
Ideally no, but in cases if your account is in debit for any reason then broker can to make good for the debit.
In any case he should not use but if broker go bust your idle money can go along with broker, so better be alert when choosing broker, Can check this to know how safe it is to choose Zerodha.
Thanks a lot for that information. I read/heard about SEBI imposing stricter restrictions on pledged shares post the Karvy fallout - are you aware of any such procedures ? . Additionally are there any measures/procedures in place at Zerodha that will prevent such fraudulent transactions ?