Suppose, on a particular occasion such as an election, an investor makes his stock position and suppose that he gets the wrong idea, he wants to sell the stock to avoid huge losses, but from the stock broker or the side of the stock exchange If the investor is unable to sell the stock due to technical fault, can the investor ask for compensation from the stock broker or stock exchange for the huge loss caused by the technical fault?
In fact, in such a situation, an investor does not ask for compensation from his stock broker, for this, the stock broker puts a clause in the agreement at the time of signing. There is a condition that the stock broker or stock exchange does not guarantee the service is always available.
At the time of opening an account, stockbrokers also place a condition in front of their client that if an account is suspended or there is an interruption or there is a fault in the system or due to a technical fault it stops working. The brokerage firm will not be responsible for the losses incurred by the investors.
That is, such technical fault which is outside the control of the stock broker or stock exchange, then the investor cannot seek compensation from the stock exchange or stock broker for the loss incurred by himself. But if the investors demand compensation, then they have to prove that the technical glitch was within the scope of the broker and the exchange. However, it is almost impossible for investors to prove it.
An outage is not uncommon in the brokerage platform, in order to have clarity in the rules to deal with such a situation, market regulator SEBI issued a circular regarding all rights and responsibilities for all stockbrokers, sub-brokers and stock exchanges. is.
In this circular, SEBI has told investors that there are many complexities in internet based trading. In such a situation, it is not possible that there can be no technical flaw in trading. Hence stock brokers or exchanges cannot guarantee that the service will always be available to the investors without any hindrance. Therefore, it is difficult to get compensation from a stockbroker or exchange if there is a technical fault.
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