Stocks & Commodities
What kind of returns can be earned from the equity market?
"Two types of returns can be earned from investing in equity markets:
1.) Dividend Returns: Dividends depend on profitability of the company &management decision and is distributed to the equity shareholders of a company.
2.) Capital Gain Returns: Capital gains is the profit earned by the investor from sale of share on the exchange i.e. it is the difference between the Market Price and Purchase Price of the share."
What services do you provide me in exchange for the brokerage I pay?
"Our associates - Sumpoorna, are an online cum full-service brokerage firm. The cost-savings achieved by economies of scale and having centralised operations are passed on to the customers in many ways:
1.) Charging a lower brokerage
2.) Providing & publishing research
3.) Providing a Relationship Manager"
What kind of assurances can you provide me that my money will be safe?
"There are many things that are already in place to ensure that your funds are safe. Here are a few key main things to remember:
1.) All brokers have to deposit a certain amount of money to be kept with the NSE and MCX to become members. This is to ensure capital adequacy and a minimum net worth policy.
Client funds have to be kept in a separate bank account. A broker cannot mix client and pro funds together in any way.
2.) Every year, the exchanges perform a thorough audit spanning several days. They check when funds came in from clients, how much is with the broker, what they were used for, and many other detailed compliance checks. We have passed their check every single year.
Our calls are on a recorded line. If the broker places an order on behalf of a client, he must have proof of doing that.
3.) Investor Protection Fund - Part of your transaction fees charged by the exchange go to this fund which is to help clients recover losses in case of electronic, systematic or other non-client related failures. This is maintained by the NSE/BSE/MCX."
Is the company licensed to provide such services by regulators?
"Sumpoorna is licensed by SEBI to provide broking services in the capital markets. The licences are mentioned below:
1.) Broking in Equiy Segment: INB231429037 (NSE); INB011429033 (BSE)
2.) Broking in Futures & Options Segment: INF231429037 (NSE); INF011429033 (BSE)
3.) Broking in Currency Derivatives Segment: INE231429037
4.) Broking in Commodity Futures Segment: 46150 FMC-MCX/TM/Corp/1927 (MCX); 1117 FMC-NCDEX/TM/Corp/1092 (NCDEX); 1080 FMC-ACEL/TM/Corp/0437 (ACE)
5.) Depository Services: IN-DP-CDSL-665-2012
6.) Providing Research Analysis: INH100002466"
What type of accounts can I open with you?
A client can open all types of account with Sumpoorna - for individuals, HUFs, proprietorships, partnerships, or companies
I have an existing Demat Account with my bank, is it compulsary for me to open another Demat Account with you?
No, there are no compulsions. Sumpoorna is a full-service broker and strives to provide such services to its clients, the client may or may not choose to avail such services.
Are there any tax benefits from share market investments?
"Certain tax benefits from share market investments are as follows:
1.) Investment in Equity Linked Saving Scheme: It is the part of section 80C which gives tax deductions upto the investment or expense of Rs 1.5 lakh.
2.) Investment in Rajiv Gandhi Equity Saving Scheme: It is for the new investor of the share market. The tax benefit is available upto the investment of Rs 50,000.
3.) Dividend earned Tax-Free in the hands of the shareholder
4.) No Long Term Capital Gains
5.) The ‘carry forward of loss‘provision can help to avoid short-term capital gains tax."
Can I add another person to my Trading account?
No, since trading accounts can be held only by individuals or corporations, two people cannot hold one trading account.
Can I add another person to my Demat account?
Yes, Demat accounts can be held by multiple people and also by companies and partnership firms. Thus, if you would like to have more than one person on a Demat account, you have to do so at the time of account opening. Once an account is already open, you cannot add another person to it. Your only alternative is to open another demat account.
What is a trading account? How is it different from a demat account?
A trading account lets you buy/sell shares on the exchange. A demat account is like a safe deposit in bank where you hold all your shares i.e. shares bought are deposited in and where shares sold are taken from. Originally, companies used to issue paper shares but this has now changed to a 'dematerialized' format, hence the short form 'demat.'
What is KYC?
Know Your Client (KYC) is a regulatory requirement mandated by SEBI that requires every investor in the securities market (stocks, mutual funds etc.) to be verified by a SEBI registered entity. This is a one time exercise and also lets investors invest separately in stocks/mutual funds over their lifetime.