How safe is my brokerage firm to trade with?

A friend of mine was talking about horror stories on how he got badly hit by Unicon securities shutting down business. How do I know that my broker is safe to trade with? I use a local brokerage firm based in Kolkota.

You should check out We update the website with the latest financials available on the brokerage business from the MCA website.

Internationally some really big brokerage firms have gone down, so just trading with a reputed name doesn’t mean you can be 100% safe. If there is financial trouble, it will first show up on a brokerage’s balance sheet. So make sure to track, if there are heavy loss making brokerages with debt on the books, best to avoid trading with them. I know a lot of us traders like low brokerage, but it is important that we don’t compromise with quality while selecting a brokerage, make sure if you are going with not so reputed names, they are atleast profitable.

With all the three recent cases of brokers going down, Unicon, Orion and Kassa. All of them had stopped filing returns and made huge losses on the books. So for example, if you were checking Unicon on, you would have known there is trouble much in advance.

Another indication to know that your brokerage firm is in trouble is if fund withdrawal requests are not honored in time.

Hello Trader,

'Members of recognized exchanges and regulated by SEBI/FMC. Even if a brokerage decides to shut down the client funds should ideally be safe if not there is also an investor protection fund setup by exchanges (more than Rs 1000 crores at NSE) which can be used in such cases " 

Taken from the following link:

Considering the lengthy process and the red tapes involved while dealing such issues, it is better to change them while you still can.


Company should be of less debt. Clear management policies. Good public interaction.

SEBI has instituted Investors Protection Fund w.e.f. January 2016. If a brokerage firm defaults, each investor would receive protection for investments made via that broker, up to a maximum of Rs 15,00,000 (15 Lacs).

If you are investing more than 15,00,000 with a single broker, may diversify excess amount via opening accounts on name of your family members (account should stay with Zerodha, LOL).