JOIN USA prominent stock brokers' group has raised concerns about the NSE asking investors not to keep funds and securities idle with trading members, saying such messages are "counter-productive" and create distrust about brokerages.
The Association of National Exchanges Members of India (Anmi) has called on the NSE to immediately modify the message, following which the exchange has "reworded" its 'investor alert' and dropped the contentious part.
The NSE's new modified message being sent to clients reads: "As a prudent practice, you are advised to settle funds/securities on monthly/quarterly basis with your broker."
Earlier, the exchange had issued the investor alert stating that "never keep idle funds or securities with brokers and insist on monthly and quarterly settlement".
Anmi then shot off a letter to the exchange saying such message gives an impression that NSE's trading members should not be trusted with idle funds and securities.
"Even though the intent of the message is to create awareness among investor community as to the importance and need of periodic settlement, the tone and language of the message convey more than that," it said.
The association urged the exchange and the regulator not to cast aspersions on the entire broking community, which has been working "very hard" to improve compliance, disclosure and overall transparency, because of "very few" errant brokers.
"Most of the brokers are now largely compliant and such messages from the exchange are counter-productive as they create distrust and confusion in the mind of investors," the brokers body maintained.