Around 28 brokers affiliated to the NSE have defaulted since November 2019. Eight have defaulted in the current year. The regularity with which brokers default makes it imperative that retail investors entering the capital markets choose this intermediary with utmost care.
Why are brokers defaulting?
The most common reason is that in the past they may have used clients' securities and cash for proprietary trading, and suffered losses. Or they have used one client’s cash or securities to offer enhanced margin to another client, who may have suffered losses.
Over the past year and a half, the Securities and Exchange