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8 procedures binding for new clients to invest successfully in the capital market

2019-08-09T22:07:26.675Z

The Emirates Securities and Commodities Authority (ESCA) has identified eight measures to be taken by new investors to implement the investment decision in the capital market and achieve success in their future investments in the market.


The Securities and Commodities Authority (SCA) has identified eight actions to be taken by new investors to enable them to implement the investment decision in the capital market and to succeed in their future investments in the market.

The EIA explained in an awareness leaflet obtained by Emirates Today that these procedures are the careful selection of the financial broker, start obtaining a code for dealing in the market, open an account with the brokerage company, learn the trading procedures, identify the companies listed in the market, and give The investor's financial broker has clear instructions, reviews the personal accounts statements, and monitors the performance of the investor's investments periodically and continuously.

1. Careful selection of your financial broker:

The Securities and Commodities Authority said that if an investor decides to invest himself in securities and has the ability and willingness to make his own decisions and follow-up transactions himself, one of the brokerage firms licensed by the Authority must be selected.

The CMA advised the investor to refrain from dealing with brokerage firms that demand conduct contrary to the legislation governing the capital market, for example: signing of orders to sell or buy securities in blank or offered to the investor, and credit to carry out its operations while they are not licensed to practice Margin buying activity, or companies that resort to pressure on the investor to carry out operations that only bring him the company to receive commissions and expenses from him.

She explained in this regard that following these tips avoids the investor exposure to improper practices by some employees of brokerage companies, which may lead to the loss of time and money and investment and loss of confidence in dealing with markets.

2- Obtaining a code for dealing in the market:

The Authority pointed out the importance of starting to obtain a code to deal in the market, pointing out that when the investor begins to invest his money in securities through a brokerage company, the investor must have a unified number in the market, other than the trading account number with the company itself. She pointed out that all transactions of the investor is done through this figure even if dealing with more than one brokerage firm in the market.

3- Opening an account with the Brokerage Company:

The Authority stressed the need for the investor to open an account with the brokerage company and fulfill the contract of opening an account deal in securities with the brokerage company, with the need to read and understand the terms of the contract so that the investor knows well what his rights and obligations, and then sign and get a copy of it to keep.

She noted that the investor should deposit the amount that he wants to issue purchase orders of securities at its value, and can issue orders to the company to sell or buy securities in which he wishes to invest, with the investor always remember to review his account balances and transactions in securities purchased and sold from During the brokerage firm at least once a month by requesting a statement of account from the brokerage firm that carries out its operations.

4. Learn about trading procedures:

The CMA asked the new investors to learn the trading procedures and warned that the investor's lack of knowledge of the trading procedures may make mistakes.

She explained that the procedures of trading in the markets include the investor to issue a purchase order for securities that he wishes to buy through the form provided through the brokerage company, as well as determining the quantity he wants to buy within the amount of money held at the date of purchase, which must be deposited The brokerage firm has a cash deposit receipt or cash receipt receipt from the brokerage company, remembering to receive a cash deposit receipt in the company.

The Authority pointed out the need for the investor to ask the company for the purchase invoice if the purchase of shares is carried out, but in the case of sale, the investor must issue a sale order in the quantity he wishes to sell from the securities that have already been purchased or subscribed, and he must determine the sale price to carry out the process. Or choose to execute them at the market price, indicating that if the sale is carried out, the investor should ask the company for the sales invoice and a financial statement, provided that the investor has the right to request the payment of the value of the securities sold after settlement.

5. Identifying companies listed in the market:

The Commission stressed the need for new investors to identify companies listed in the market before starting to invest. The CMA asked the new investor to look for information about companies that are planning to buy their securities by reading their prospectus or annual reports and financial statements. They also prefer to follow company news through specialized newspapers.

6. Give the broker clear instructions:

The Commission stressed the need to give the investor, the broker clear instructions do not tolerate confusion or misunderstanding, and be careful when writing a written order or give an order to the broker over the phone. It noted the importance of making sure that the instructions were clear and that the broker had received the correct instructions, since any error in the delivery of information could incur serious financial losses.

7. Audit of accounts

The TRA focused on the importance of the investor reviewing his account statements, as his brokerage firm will send an account statement to the investor periodically, and the investor should make sure to review these statements accurately, and in case of errors should contact the company immediately to take the necessary correction Fast.

8. Monitoring the performance of investments:

The TRA asked the investor to monitor the performance of his investments, so that personal investments should not be left unattended and monitored for a long time. She warned that this may cause the investor not to achieve his investment objectives or the inability to achieve maximum benefit from investment in securities, especially if the market conditions in particular or the economic performance of the state in general.

The CMA requested the investor to monitor the performance of his investments periodically and review the personal accounts statements.

Source: emara

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