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Is your Discount Broker Ripping You Off .pdf

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Is  your  Discount  Broker  Ripping  You  Off?  
Discount  Brokers  are  NOT  a  result  of  Broker  Competition.  We  all  know  that  stock  brokers  have  
gone  through  a  tough  period  over  last  few  years.  As  a  result  a  new  breed  of  brokers  emerged  
the  so-­‐called  “Discount  Brokers”.  While  it’s  a  very  noble  concept  and  exercised  in  various  
developed  countries,  but  given  the  complicated  tax  structure  in  India,  accompanied  with  
multiple  cost  headers  of  Exchange,  SEBI,  State  Taxes  and  so  on,  it  also  created  a  new  wave  of  
opportunity  for  some  brokers  who  spent  last  few  years  in  strategizing  their  charge  structure.  
Rest  assured,  they  are  here  for  Business  and  not  for  Charity.    
Discount  brokers  are  ripping  off  thousands  of  their  clients,  most  of  them  average  middle  class  
people.  They  don’t  just  charge  them  buy  and  sell  commissions.  They  skim  client  account  with  
“other″₺  charges,  turnover  charges,  trade  and  call  charges,  software  charges,  minimum  volume  
commitment  charges,  and  the  most  bizarre  of  all  ’rounding  charges’.  
1. OTHER  CHARGES:  Some  Well  Known  Discount  Brokers  Over  Charge  you  by  as  much  as  
Rs  300  per  Crore  in  “Other  Charges”.  
2. STT  and  CTT:  STT  and  CTT  should  ONLY  be  levied  on  total  Selling  volume.  Some  Brokers  
can  charge  you  CTT  and  STT  on  both  Buying  and  Selling.  
3. TRANSACTION  CHARGES:  Transaction  Charges  is  another  head  where  Brokers  can  hide  
the  brokerage.  Check  you  contract  note  carefully  or  call  our  client  service  team  to  
explain  you  your  contract  note  in  details.  
4. OFFLINE  TRADING  CHARGES:  On  top  of  Brokerage,  you  might  also  be  paying  “nuisance  
charges”  in  the  form  of  offline  trading  charges,  call-­‐to-­‐trade  charges.  If  you  are  regularly  
calling  your  broker  to  trade  for  you,  these  charges  can  quickly  add  up.  
5. STAMP  DUTY:  Stamp  Duty  can  vary  from  Rs  10  to  Rs  5000  per  crore.  At  Finvasia,  we  
charge  only  Rs  10  per  day,  irrespective  of  your  volume.  Image  the  Impact  it  can  have  on  
your  trading!  
6. SOFTWARE  CHARGES:  Software  charges  or  Software  Maintenance  charges  are  the  same  
thing.  Discount  brokers  can  charge  you  for  software  usage  “Per-­‐Segment  per  Month”.  
Know  and  understand  your  trading  costs.  There  are  hidden  costs.  They  are  subtle.  Pay  
Attention,  these  hidden  charges  can  do  enormous  damage  over  time,  like  termites  gnawing  
away  inside  an  antebellum  mansion!  
NSE  Member  Code:  14846  |  MCX  Member  ID:  55135  
Securities  and  Exchange  Commission  (USA)  Firm  CRD#:  152771  |  Foreign  Institutional  Investor  (FII):  INCAFD256911  
Plot  #  10|Netsmartz  House  (Level  3)|  Rajiv  Gandhi  Chandigarh  Tech  Park|  Chandigarh-­‐160101  (INDIA)  
Phones:  +91  172  6670000|  Fax:  91-­‐172-­‐6670070|  Email:info@finvasia.com|www.finvasia.com  





Despite  the  over-­‐hyped  stories  on  brokers,  there  are  many  brokers  who  are  honest  &  hard-­‐
working.  If  you  do  an  internet  search  on  broker  scams,  you’ll  come  across  all  sorts  of  forum  
posts,  articles  and  comments  from  disgruntled  traders  who  blame  the  broker  for  their  failure.  
So  while  researching  you  must  learn  to  separate  fact  from  fiction.  
Common  complaints  are  often  nothing  more  than  traders  not  understanding  the  markets  they  
are  trading,  and  then  blaming  the  broker  for  their  losses.  But  there  are  times  when  losses  are  
the  broker’s  fault.  This  can  occur  when  a  broker  attempts  to  rack  up  trading  commissions  at  the  
client’s  expense.  So,  PAY  ATTENTION!  
No  one  is  here  for  charity.  Not  Even  Finvasia!  But  what  differentiates  us  from  others  is  Honesty.  
We  mean  Honest  Business!  
Disclaimer:  This  document  is  for  information  purpose  only.  It  is  neither  an  offer  to  sell  nor  solicitation  to  buy  any  of  the  securities  mentioned  
herein.  Finvasia,  its  directors,  officers  or  employees  will  not  be  liable  for  any  direct  or  indirect,  consequential  or  incidental  damages  or  loss  if  any  
arising  out  of  this  document.  The  information  contained  herein  is  confidential  and  is  intended  solely  for  the  addressee(s).  Any  unauthorized  
access,  reproduction,  disclosure,  dissemination  or  use  of  this  information  is  strictly  prohibited.  FINVASIA  and  its  affiliates  have  no  responsibility  
for  unauthorized  access  and/or  alteration  to  this  communication,  nor  for  any  consequence  based  on  or  arising  from  your  use  of  information  that  
may  have  been  illegitimately  accessed  or  altered.  All  electronic  communication  may  be  reviewed  by  authorized  personnel  and  may  be  provided  
to  regulatory  authorities  or  others  with  a  legal  right  to  access  such  information.  At  various  times,  FINVASIA  or  its  affiliates  may  have  positions  in  
and  effect  transactions  in  securities  or  other  financial  instruments  referred  to  herein.  Unless  indicated,  these  views  are  of  the  author’s  and  may  
differ  from  those  of  the  research  department  of  FINVASIA  or  its  affiliates.  It  should  not  be  interpreted  as  a  recommendation  to  buy  or  sell  any  

NSE  Member  Code:  14846  |  MCX  Member  ID:  55135  
Securities  and  Exchange  Commission  (USA)  Firm  CRD#:  152771  |  Foreign  Institutional  Investor  (FII):  INCAFD256911  
Plot  #  10|Netsmartz  House  (Level  3)|  Rajiv  Gandhi  Chandigarh  Tech  Park|  Chandigarh-­‐160101  (INDIA)  
Phones:  +91  172  6670000|  Fax:  91-­‐172-­‐6670070|  Email:info@finvasia.com|www.finvasia.com  


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