Unauthorised Trade or Position Taken in Your Account by Broker
Immediate Actions — First 30 Minutes
1
Do NOT square off the unauthorised position yourself — if you close it, the broker may claim you ratified the trade. Leave it open and document everything first.
2
Take screenshots immediately: the contract note, the trade blotter, your account statement, and any messages from the broker or relationship manager.
3
Check your phone for the broker’s daily trade SMS/email confirmation — if you did not receive one at the time of the trade, this is additional evidence of unauthorised execution.
4
Call your broker’s compliance officer (not the relationship manager who may have placed the trade) and state clearly: ‘I did not authorise trade [details]. I am filing a formal complaint.’
5
Write down the timeline: when you first noticed the trade, what the current P&L on it is, and any communication you had with the broker or RM before the trade.
Short-Term Steps — First 48 Hours
1
File a written complaint with the broker’s Compliance Officer and GRO within 24 hours — state clearly that the trade was not authorised by you and demand reversal at the broker’s cost.
2
Request the broker to provide: (a) the order log showing who placed the order, (b) the login session details, (c) any POA or authorisation document they claim covers this trade.
3
If you have given a POA to your broker: check whether this trade falls within the scope of the POA — most POAs only cover delivery obligations, not discretionary trading.
4
File a complaint on the stock exchange investor services portal immediately — unauthorised trading is within the exchange’s direct disciplinary jurisdiction over broker members.
5
Contact SEBI’s investor helpline (1800 266 7575) and report the unauthorised trade — SEBI takes this category of complaint with the highest priority.
Resolution Steps — Next 2–4 Weeks
1
File on SCORES 2.0 — unauthorised trading complaints against brokers are fast-tracked by SEBI.
2
File on SMART ODR (smartodr.in) for arbitration — especially if the broker is denying the complaint. Arbitration awards in unauthorised trading cases are typically in the investor’s favour.
3
If there is a loss on the unauthorised position: claim the full loss plus the brokerage and applicable charges as damages from the broker.
4
Consider filing a police complaint for criminal breach of trust (BNS Section 316) if the broker has caused a significant financial loss through the unauthorised trade.
5
Document the broker’s response carefully — if they claim the trade was ‘authorised verbally’, SEBI requires written or electronic authorisation for every trade. Additionally, demand the broker provide: voice recordings of any dealer-desk calls (SEBI mandates brokers to preserve all order-related voice and electronic records), and IP address or device logs of the login session during which the trade was placed. Important distinction: if the unauthorised trade resulted from credential hacking or account takeover (someone else logged into your account), this is cyber fraud — report to 1930 and cybercrime.gov.in immediately in addition to the broker complaint, as the two cases require parallel action.
Prevention — How to Avoid This in Future
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Never give your broker’s relationship manager your login credentials or OTPs — every trade must be placed by you personally through the platform.
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Read every contract note and trade confirmation the same day it arrives — set up email and SMS alerts for every executed trade.
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If you give a Power of Attorney to your broker: understand its exact scope. A standard POA does NOT authorise discretionary trading.
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Periodically review your trading account for trades you do not recognise — check the order log, not just the contract notes.
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Keep your login credentials and 2FA device exclusively in your control at all times.
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Your Rights
Under SEBI Circular SEBI/HO/MIRSD/DOP/CIR/P/2019/75 and SEBI (Stock Brokers) Regulations 1992, every trade must be backed by a client order. Discretionary trading without a client’s written or electronically recorded instruction is prohibited for brokers. Only SEBI-registered Portfolio Managers under SEBI (Portfolio Managers) Regulations 2020 can exercise investment discretion. The broker bears the entire cost of reversing an unauthorised trade and compensating you for any resulting loss. Repeated unauthorised trading can result in the exchange suspending or cancelling the broker’s trading membership.
Key Contacts & Portals
| Who / What | Contact / Action |
|---|---|
| NSE Investor Services | 022-26598190 | nseindia.com/invest/investor-grievance |
| BSE Investor Services | 022-22728000 | bseindia.com/investors |
| SEBI Investor Helpline | 1800 266 7575 | sebi.gov.in |
| SEBI SCORES 2.0 | scores.sebi.gov.in |
| Who / What | Contact / Action |
|---|---|
| SMART ODR | smartodr.in |
| Broker Compliance Officer | Check your broker’s SEBI registration document for details |
| Police / Cyber Crime | cybercrime.gov.in | 1930 (if significant financial fraud) |