Zerodha investor charter

The investor charter is a standardised disclosure document mandated by SEBI for all registered market intermediaries, including stock brokers. Zerodha Broking Limited, as a SEBI-registered broker under certificate INZ000031633 (see Zerodha SEBI registration), publishes an investor charter on its website that sets out the rights of its clients, the obligations Zerodha undertakes to its clients, and the redressal mechanisms available if those obligations are not met. The investor charter was introduced by SEBI through a circular issued in October 2021 and forms part of a broader initiative to standardise investor rights disclosures across SEBI-regulated entities.

Regulatory basis

SEBI issued its circular on investor charters (SEBI/HO/OIAE/IGRD/CIR/P/2021/583) in October 2021, requiring all SEBI-registered intermediaries (stock brokers, depository participants, mutual fund distributors, portfolio managers, investment advisers, and others) to publish an investor charter by 31 December 2021. The charter must be displayed prominently on the intermediary’s website and must be reviewed and updated at least annually to reflect any changes in applicable regulations or service standards.

The investor charter framework is part of SEBI’s investor education and protection mandate under section 11(2)(g) of the SEBI Act, 1992, which authorises SEBI to promote the development of and regulate the securities market, including through measures to protect the interests of investors.

Content of Zerodha’s investor charter

SEBI’s circular prescribes a minimum template for investor charters, covering the following topics. Zerodha’s charter follows this template while incorporating firm-specific detail.

Rights of investors

The charter enumerates the basic rights that every Zerodha client is entitled to exercise:

1. Right to receive a copy of the Know Your Client (KYC) documentation submitted at account opening, including any changes made during the account’s life.
2. Right to receive contract notes within 24 hours of trade execution, in electronic or physical form as opted.
3. Right to receive fund and securities statements on demand and at specified periodic intervals, including the annual account statement.
4. Right to receive information about charges upfront: brokerage rates, exchange transaction charges, stamp duty, taxes (STT, CTT, GST), and DP charges must be disclosed before account opening and must be consistent with the schedule displayed on the broker’s website.
5. Right to receive a risk disclosure document before enabling derivative trading, clearly stating the risks of leveraged instruments.
6. Right to grievance redressal through Zerodha’s internal mechanism, the exchange’s arbitration process, SEBI SCORES, and SEBI SMART ODR (since 2023).
7. Right to nominee registration for demat account holdings, ensuring that securities can be transmitted to the nominated beneficiary without probate in the event of the account holder’s death.
8. Right to access and port KYC records through the SEBI KRA (KYC Registration Agency) system, allowing clients to switch brokers without re-doing the full KYC process.

Obligations of Zerodha to investors

The charter also records Zerodha’s undertakings to its clients:

1. Timely and accurate contract notes: issued within 24 hours of each trading day on which a transaction occurs, in the prescribed format.
2. Segregation of client funds: client funds are maintained in a separate bank account from Zerodha’s own funds and are not used for any purpose other than client obligations and margin payments to exchanges.
3. Segregation of client securities: client securities in the depository are held in a separate pool account from Zerodha’s own securities, with pledges created only with client consent.
4. Prompt credit of sale proceeds: funds from the sale of equity cash market securities are credited to the client ledger after deduction of applicable charges and settlement netting on T+1.
5. Prompt credit of purchased securities: equity shares purchased in the cash market are credited to the client’s demat account after exchange pay-out, which occurs on T+1.
6. Margin refund: excess margin collected from clients, not needed for open positions or pending settlement, is returned to the client’s bank account within one working day of the margin becoming free.
7. Disclosure of conflict of interest: Zerodha is required to disclose any material conflict of interest that may affect its services to clients (for example, if it has a financial interest in a securities issuer whose products it recommends).
8. KYC updates: client requests for address changes, bank account changes, and nominee updates are processed within the timelines prescribed by SEBI and the exchanges.

Do’s and don’ts for investors

SEBI’s template investor charter includes a section of practical guidance for investors, which Zerodha reproduces in its charter. Key items include:

• Do: verify the broker’s SEBI registration on the SEBI intermediary portal before investing.
• Do: read the risk disclosure document before trading in derivatives.
• Do: check contract notes immediately upon receipt and report discrepancies promptly.
• Do not: share trading account passwords or OTPs with any third party, including individuals claiming to be Zerodha employees.
• Do not: act on unsolicited investment advice received through social media, messaging apps, or telephone calls from persons claiming to be associated with Zerodha.
• Do not: authorise third parties to operate the trading account without formally registering them through the Power of Attorney mechanism.

Grievance redressal information

The investor charter cross-references Zerodha’s grievance redressal mechanism, the SEBI SCORES portal, and the SEBI SMART ODR platform. It provides the contact details for Zerodha’s compliance officer and the escalation path for unresolved complaints.

Annual review and publication obligations

SEBI’s circular requires that the investor charter be reviewed annually and updated to reflect regulatory changes or service changes. Zerodha is required to:

• Display the investor charter in a prominent location on its website (typically accessible via a “Regulatory” or “Legal” section).
• Provide a copy of the charter to new clients at account opening, as part of the account opening kit.
• Submit confirmation of investor charter compliance to the exchanges as part of the annual compliance filing.

Relationship with other disclosure documents

The investor charter is distinct from, but related to, several other mandated disclosure documents:

• Risk disclosure document: a more detailed document specific to the risks of derivative trading, required separately from the investor charter.
• Annual disclosures and risk-o-meter: periodic financial and risk disclosures that complement the charter’s general rights framework.
• Terms and conditions / client agreement: the legally binding agreement between Zerodha and the client that governs the trading relationship. The charter summarises client rights at a high level, but the client agreement contains the full contractual terms.

Practical significance for clients

The investor charter is a reference document that clients can consult to understand what they are entitled to from Zerodha as a SEBI-regulated broker. If Zerodha fails to provide a contracted note within 24 hours, or delays the credit of sale proceeds beyond the T+1 timeline, the investor charter provides documentary basis for a formal complaint.

The charter is also useful in assessing the legitimacy of a broker: the obligation to publish and maintain an investor charter applies only to SEBI-registered intermediaries. Unregistered entities operating as brokers or investment advisers cannot lawfully publish such a charter, and the absence of one is a red flag that SEBI consistently highlights in its investor education communications.

See also

• Zerodha SEBI registration (INZ000031633)
• Zerodha grievance redressal mechanism
• Zerodha on SCORES
• Zerodha SMART ODR
• Zerodha annual disclosures and risk-o-meter
• Zerodha as a Qualified Stock Broker (QSB)

References

1. SEBI Circular on Investor Charter (SEBI/HO/OIAE/IGRD/CIR/P/2021/583), October 2021.
2. SEBI Act, 1992, section 11(2)(g), investor protection mandate.
3. SEBI (Stock Brokers) Regulations, 1992, broker obligations to clients.
4. SEBI Master Circular for Stock Brokers, 2023, consolidated client-facing compliance requirements.
5. Zerodha Investor Charter, published at zerodha.com (accessed mid-2026).
6. SEBI Investor Education and Protection Fund (IEPF) Guidelines on Investor Charters.