[Please move this thread to appropriate category, I chose “Zerodha” based on best assessment]
About 9 hours ago, I received an email from Zerodha Support asking for details about investment in a particular company’s stock. Following information was sought:
As per an exchange requirement, we would like to seek some additional information regarding the trades done in the XYZ scrip.
Are you fully aware of your dealings in the above-mentioned scrip?
If your answer to the previous question is ‘Yes’, please provide the rationale behind the said trades.
Do you subscribe to any advisory services? If yes, please share details of the advice and the adviser.
Are you connected, directly or indirectly, to any promoter, director, or key managerial employee of the company whose stocks you’ve dealt with? If yes, please share the nature of your connection and the name of the individual.
Further, we also request you to share the-
a) latest Income details
b) All Bank Statements from 01-09-2021 to 30-09-2022
c) Filled and Signed copy of the Client’s undertaking. (The same has been attached herewith)
I have responded in earnest and as quickly as I could after seeing this email, ensuring I shared as much detail as I could along with all relevant attachments, signed documents, etc.
Has anyone else had similar experience? I tried to look up through keywords on Google or read up on stock exchange compliance requirements for NSE / BSE / SEBI etc. but couldn’t find anything relevant where brokers / demat account providers are expected to ask for such information.
If anyone could throw some light on this, would be extremely grateful.
@DPS, it is just a part of routine investigations that exchanges conduct and ask their broker members to provide the details that are available with them and also some additional details for which they may have to contact their clients as well.
There can be various reasons for which such documents may be asked, the reasons are usually not disclosed. Here is one such circular from 2003, there might be more reasons or criteria than mentioned in there for which exchanges or depositories or brokers might ask you to provide. This is primarily to conduct surveillance and identify patterns and anomalies in trading activity, market manipulation etc.
And receiving such requests in itself doesn’t indicate any violation in your trading pattern, such details would also be asked as part of routine/sample-based analysis of the transactions happening in the stock market.
FWIW, I am not an active trader. In fact I haven’t bought or sold anything for over a month. I am more of a buy and hold investor with only once ever (accidental) intraday activity for tax purposes in my history as an investor.
Now that I have submitted all the asked for information, what’s the next step? Should I expect a response from Zerodha or is it just a dark hole from my perspective going forward with internal machinery doing its job?
In most cases, nothing more is required if all the details asked are submitted. The concerned team will do their part of the verification and submit their analysis to their competent authorities. If anything, abnormal is noticed or there is no proper response, then certain restrictions might be put on the account to ensure compliance.