It was 6th August, the day of Mid Cap Expiry. The market opened Gap Down and index opened at ₹80. There was only ₹17,000 in my account but what I saw next shook me completely.
I saw 3-opened short positions of Mid-Cap Nifty in my account which was equal to around ₹50,000
How did that happen when I was not having enough funds in my account?
This happened with Raghu (name changed) whose stock broker executed a market order which took his fund balance to -32,000.
When he asked his broker how it happened, they didn’t give any straight answer to the question. Later when the price dropped a bit, Raghu square-off his position and exit the trade.
But the mystery remains unsolved.
There could be two reasons behind this
- Either the broker accessed his account and executed the order to earn brokerage.
- The order got executed to some tech-glitch in the app.
In either of these cases, the trader loses money.
Now, what option do the clients have in such cases?
Well, there are multiple ways by which clients can report these cases and claim refund of losses.
How to File a Complaint Against Stock Broker?
In such cases the trader must follow the right steps at the right time to get recovery of their losses. This is how one must proceed:
- Report to Broker’s Compliance Officer: The first step in such cases is to report the whole case to the stockbroker’s compliance officer.
In case the trader didn’t get any positive response, he can then reach out to higher authorities of the compliance department.
Most of the time, such disputes are resolved at the compliance level only, however in case the client doesn’t get a satisfactory response, then he can reach out to Stock Exchange and then to SEBI. - File a Complaint to NSE: You can then reach out to the stock exchange by submitting all the valid proofs and documentation of the whole incident.
To report the case, register at the NICE portal of NSE. Register and then login using credentials. Draft the whole incident with proof.
Stock exchange first arranges a counseling session and in case the dispute is not reached to the conclusion then the arbitration is arranged to resolve the issue. - Lodge a Complaint in SCORES: If none of the above steps prove to be satisfactory, then the last step is to lodge a complaint in SEBI using the SCORES portal.
The steps to file a complaint are simple and straightforward and you can proceed by registering to the portal and then reporting the whole issue in detail.
Conclusion
Stock Brokers either misuses clients’ information or fails to provide an advanced and glitch-free trading platform which raises one or the other issues for clients leading to hefty losses in many cases.
The case of Raghu is one such example, who lost more than ₹30,000 due to auto-execution of order in the index.
SEBI must consider these complaints and take strict action against stock brokers who fail to provide satisfactory services to their clients.
