Online discount brokerage 5paisa.com's latest advertisement campaign 'broker hatao, brokerage bachao' has raised eyebrows among the country’s stock brokers as the community claims it to be incorrect “legally and factually”.
Online discount brokerage 5paisa.com’s latest advertisement campaign ‘broker hatao, brokerage bachao’ has raised eyebrows among the country’s stock brokers as the community claims it to be incorrect “legally and factually”. In a letter addressed to the exchanges and SEBI, stockbrokers industry body Association of National Exchanges Members of India (ANMI), has alleged that the ad campaign propagates misconception that one does not need offline brokers to carry out trades.
“The issue is the said Ad is promoting a misconception and incorrect legal & factual statement among all the investors and market participants that the trade shall need no broker. The Ad is misleading the public at large to believe they can do away with a broker to trade in the securities market,” ANMI said in its letter, also shared with FE Online. “We submit that the Ad is propagating incorrect legal notion and promising various benefits to the investors which are in violation of SEBI (Stock Brokers & sub Brokers) Regulations, 1992,” the letter said.
Commenting on the issue, ANMI President Rajesh Baheti said, “5paisa.com has issued a factually incorrect advertisement that gives the impression that a broker is not needed to trade in the markets, and also incorrectly claiming that they are charging 0% brokerage. ANMI is not against their business plan, but it cannot be at the cost of misstating facts.”
Considering 5Paisa.com — an online discount brokerage — has been maintaining its brokerage fee at as low as Rs 10 per trade, many offline brokerages are accusing the firm, lately, of hurting their businesses. IIFL is the parent firm of 5Paisa.com.
“All our campaigns focus on New millenials who like to trade on their own that to on Mobile. Our idea is to promote self investing at lowest cost and not harm any other broker. We have made adequate disclosures in the Ad for a reader to understand,” Prakarsh Gagdani, CEO, 5Paisa.com said.