Well, the thing is, there are literally millions of people in India using Zerodha to invest in stock options, mutual funds, and whatnot. But if you still think that it could be illegal, well, we’d like to tell you that Zerodha is actually legal in India and there is nothing to worry about here. Your investments and profits are completely safe with Zerodha, unlike many other shady stockbrokers in the county. And just so you know, Zerodha is licensed to act as a stockbroker and yes, Zerodha is both a recognized and regulated corporation. It also complies with all the laws in India. All in all, the services of Zerodha can be used legally.
Is Zerodha Really Legal In India?
Zerodha is a completely legal and compliant stockbroker in India, that’s for sure. And you should know that it is registered with the Securities and Exchange Board of India (SEBI). This implies that Zerodha strictly adheres to the rules and regulations set forth by SEBI. Consequently, Zerodha is a genuine and trustworthy stockbroker.
Zerodha is registered with SEBI. Such registration permits them to facilitate trading operations on major Indian exchanges such as NSE, BSE, and MCX. That’s not it, Zerodha is also a member of these exchanges. Such membership further indicates their reliability. What is more, Zerodha is a Depository Participant with CDSL. And just so you know, CDSL is one of the two central depositories in India which takes care of demat accounts.
Regulatory bodies such as SEBI and stock exchanges regularly check Zerodha’s actions. The said organizations conduct audits and checks frequently. Though, throughout its history, there has been no major legal concern regarding Zerodha complying with the rules.
Zerodha’s Safety Measures
First of all, Zerodha is a company that does not have any debts for operation. This is extremely important because many of the financial problems companies face are closely related to debt, you know? So, by being debt-free, Zerodha is doing its best to minimize all the risks and that is why it is the best option for any kind of investment.
Zerodha doesn’t offer margin funding or proprietary trading. As you may know, margin funding is a process in which clients borrow money to buy more securities than they can afford. But if it happens that the market goes down, it can cause a loss if not careful. Proprietary trading is the act of a broker-dealer using its own funds to make a profit or even incurring a loss on a client account. This is where customer funds get used instead of the company’s, you know? Zerodha is completely out of these two processes which means there is no conflict of interest. And there is no risk of exposure of customers’ funds through this unnecessary activity.
Though, technology and data security are the areas that Zerodha is concentrating most on. The company built its trading software, Kite which is a fully automated one. Also, it does not have to rely on a third party for the same reason that all responsibility including creation, modification, and data safety, remains theirs. Due to this reason, Zerodha can swiftly roll out changes along with the addition of new security measures. One such example would be the two-factor authentication (2FA) that Zerodha has introduced.
