Why is Zerodha claiming all these rules and regulations, when others aren't?

Just got this from a tradingqna user, and since it has come up many times, I thought let me answer.



Had a conversations with many brokers, sub brokers, HNI traders over the weekend.
Everybody were adamant that there is no change in intraday leverage system.
So its @nithin vs all now.
One friend reminded me of “Referral program”, “opentrade”, “brokerage refund”, “60-days challenge”.
Somethings which zerodha discontinued long back claiming to be illegal. (The idea I got was somebody of authority told about this illegality to Nithin Sir over informal meeting “chai pe charcha”)
These things still continues with other brokers.
Zerodha has silently closed 60 day challenge brokerage refund!

So as per them, with @nithin its always been over cautious, sometimes deliberate. And it’s always been “can and could” with him.

We will know only after Wednesday meeting though!


I didn’t want to post it here, but since you keep bringing it up, here is the link to the conference call that NSE had last thursday with all the members on this topic. All your broker friends would have been on this call. Let me know if you still have any confusion after this, maybe you should share this and ask why they are lying.

Other points

  1. Opentrade was stopped because we were asked if people sharing trades on the platform were investment advisors as they can circumvent IA regulations by being on the platform and collect money. Which was a valid point and there was no way to solve it, we had to stop.
  2. 60 day brokerage refund was stopped after SEBI circular (post Indian trading league) that clearly said that there should be no cash or incentive or reward that broker can offer that can induce people to trade. Brokerage refund was doing it, and hence we had to stop. (Let me pull up the circular and share it here)
  3. Client referral was pointed out during inspection and said there was no specific regulation that allowed you to share, so you should stop. We pushed for it and NSE just put out a circular last week allowing this. We are starting this again this week.

These are all initiatives which were extremely successful and helping the business grow, when we stopped we took a hit.

As you’d imagine a lot of competitors keep complaining against almost everything we do with the regulator. So we are forced to be more compliant than everyone else, which we don’t have a problem and I hope our clients appreciate. Your brokerage firm, like a bank, is in a way custodian to your funds and securities, you would not want the firm to be the kinds who blatantly violates rules and regulations.


Zerodha tries to keep business clean, keep it this way only. Thanks.
Customers actually like that.
The problem is with SEBI’s adhoc way of forming rules.


It’s great of you to stand up to this trolls @nithin, you and your team are doing good job informing and answering traders all their queries but some people just can’t take one been honest and helpful. All they see and or want people to believe there are evil intentions behind all this.

good work Nithin ji

I would prefer my brokers to be compliant and transparent than be negligent and mess with regulations.

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Appreciate it very much. Thank you for the response.

A simple like would suffice on the comment , but when you give a honest and clear response like this. I have to type it out…

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@nithin the problem with we Indian’s is that once people have been at ease with something and suddenly it changes, people go haywire… why? How? How is is possible? They never try to understand the rationale behind that change.

In case of Karvy and the other brokers which went bust no one knows how long since they had been doing such unethical work and the thing about these unethical work is until and unless you get caught, there’s no one to point a finger at you… Look at PMC bank now, who are the real culprit behind the frauds, the employees themselves who never had the courage to speak against their senior or make light of their deeds… same is the case of all the other banks in India and the NPA’s we all hear about, some case’s of NPA’s are genuine but countless others are just the cause of corruption and premeditated fraud because no one cares about the country or the greater good, the bank managers & Loan employees pass most of the fraud loans because they get their cut… The downside being most of the time people and business with genuine need can’t get the loans.

As you have mentioned the grey area which until now brokers used to provided more margins with additional leverage, which now has been stopped. Even if there’s just .05 or 1% chance of the catastrophic event unfolding which haven’t till now, and if in the future it does and many brokerages go bust, because some brokers provided very high leverages in the short term rationale of getting more brokerages, then these users would be one who would be marching against the brokers and badmouthing SEBI for not doing anything to prevent such events.


Liked the last part of the call where the official replies to the question on consequences of ‘mistakenly’ not collecting margin upfront for intraday trades - He goes like - “WHY ARE YOU ASKING ABOUT BREAKING THE PROVISION OF THE CIRCULAR? RIGHT NOW WE ARE ONLY INSPECTING END OF DAY MARGIN REPORTING - WE MAY ALSO START INSPECTING INTRADAY - IF FOUND THAT MARGIN COLLECTION IS NOT DONE - IT WILL BE CONSIDERED A VIOLATION” - In simple language - Circular follow karna ich padega! No if’s and but’s - period!
#DobaaraMatPoochna :slight_smile:

@nithin @siva when can we expect this client referral incentive to be live again :no_mouth:

Hopefully this week.

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Great job nithin. Zerodha is the best.

I love zerodha , @nithin sir please bee on rules , if my money want to safe means My broker want to clean , Zerodha is clean in a ways i like . i have peacefull nights :+1:


You are the Best. World Class

@siva @nithin Any specific deadline can we expect by 20th of January ?

Feb 17th is when I think this peak margin reporting will most likely have to start. So I am guessing that is like the deadline.

Have explained peak margin bit here

@nithin what about margin reduction for headed strategies . Will they be live in January.
Also does zerodha has necessary infrastructure and rms to support this after receiving nod from regulators.

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SEBI has something called a RMRC (Risk management review) committee, that is scheduled to meet this month when the decision will be taken. What is going to be agreed will not be extremely aggressive (strategies requiring only max loss), so I am guessing most brokerage firms RMS will be ready in quick time.

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@siva @nithin any specific deadline also for restarting of referral incentives :no_mouth:

All accounts referred from Jan1st 2020 will along with our rewards also get this additional 10% brokerage incentive.

We will be announcing this on monday.