InvestorQ : As a demat account holder with a leading bank in India, are there are any safety measures that I need to adopt to be on the safer side?
Crowny Pinto made post

As a demat account holder with a leading bank in India, are there are any safety measures that I need to adopt to be on the safer side?

Answer
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1 year ago


But just saying that the shares are safe with the DP is to miss the core point. We have heard of numerous cases where shares have got debited to demat accounts without the knowledge of the holder. Here are 7 things you must keep in mind to enhance the safety of your holdings of shares with your DP…

· In case you are operating your demat account online in tandem with your online trading account then there are some basic precautious that are called for. Firstly, you must keep your user name, password and other access details confidential. Don’t use obvious codes like your name, date of birth, marriage anniversary etc as your password. Keep changing your password at regular intervals. Above all, avoid accessing your demat account from cyber cafes or even from unsecured wi-fi in malls and airports.

· What if you are still using physical debit instruction slips (DIS) to execute your debit trades? There are again some basic precautions called for. Firstly, don’t ever leave your DIS booklet with your broker or with your advisor. Let it be with you in safe custody. Leaving pre-signed DIS is a strict no. Ensure that your DIS is pre-stamped and has a unique serial number to avoid any frauds.

· Check your transaction and holding statement on a regular basis. At least twice a month is advisable. Any discrepancy will immediately be brought to you attention and you can take correction action. Similarly, insist that your electronic contract notes be sent to you on a regular basis which you can use to reconcile with your demat statement. That is the best safety net available to you.

· Today all brokers offer you an SMS facility for any movement into or out of your demat account. This is very important as you will be constantly updated about your demat account and you can immediately escalate any discrepancies that you notice. Nowadays even the exchanges send you the SMS directly so the chances of fraud are largely reduced.

· Ideally, any shares you buy must be credited to your demat account by T+2 date. Many brokers suggest to the customers to leave the shares in the brokers pool account so that it can be leveraged for trading positions. Avoid that situation to the extent possible. Let the shares come into your demat account on T+2 day so that any confusions are entirely avoided.

· There is an important precaution when your demat account is likely to be idle because you are likely to go abroad for a few months. You can also keep your demat account in safe custody so that nobody can undertake any unauthorized transactions in the same.

· Last, but not the least, you always have the option of freezing your demat account. If you find any movement in your demat account that is not authorized immediately use the option of freezing your account. Once that is done, you can always opt to escalate the issue with the exchanges and the regulator and then choose to unfreeze the account. Remember, your shares in the demat account are absolutely safe. A little bit of effort from your side, can go a long way in making your journey in the markets safer!