Irrespective of who your broker is, the shares are held by NSDL or CDSL. Even if your broker goes bust (if that is your worry), you will not lose your demat balance. There is no risk. A rare situation could be if there are shares “in transit” i.e., where you have bought something, the broker has received delivery but has not yet credited it to your account and he goes bust. Here too, the settlements have moved to T+1 and regulations have tightened considerably in recent years, so I do not see any real risk. Settlements are guaranteed by the clearing agency.
But risk exists if one is playing in F & O and have large open positions. A problem with the broker or broker’s website may lead to the investor not able to execute trades when necessary, leading to significant losses. For such an investor, it is perhaps worthwhile to have a second option so that one can take opposite position through a different broker if required and protect the downside.
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