We trust that you would have read the first part which covers the basics of investing in stocks, now it is time to move a little deeper and look at what you would need to be equipped with before investing.

1.       PAN card

The very first thing one needs to possess is a Permanent Account Number (PAN) provided by the Income Tax Department of India. This 10-digit alpha numeric number is primary requirement for entering any financial transaction in India.

2.       Broker

Brokers authorized by SEBI were made mandatory to protect investors from making huge losses by making uninformed risk in the stock market. This broker can be an individual, a company or a financial institution. The only mandate is that they need to be registered with SEBI.  

3.       Demat and trading account

Once a broker in the form of an individual, company or a financial institution has been chosen by you, the next thing that you would need is a Demat and trading account in which the shares would be electronically linked to your portfolio  and  ensure smooth exchange of money and shares.  There are 2 depositories in India namely the CSDL and NSDL which hold all the details of your shareholding.

4.       Unique Identification Number (UIN)

UIN or Unique Identification Number is necessary as big spenders can access the database provided by SEBI which contains details of any disciplinary charges faced by intermediaries like brokers or agents.

Conclusion

This article now has armed you with the terms and pre requisites that you would require before investing, wait for our part three in the series to learn more.