Zero Liability Policy is a crucial safeguard designed to protect investors from unauthorized transactions in their trading or demat accounts. It ensures that genuine investors are not held financially responsible for losses caused by fraudulent or unauthorized activities beyond their control. Understanding how this policy works helps you trade and invest with greater confidence and security.

Under the Zero Liability Policy, investors are not liable for any unauthorized transactions if they promptly report the issue to their broker or depository participant. The protection applies when the loss results from system breaches, third-party fraud, or technical errors, provided the investor has followed all recommended security practices. Timely reporting and maintaining updated contact details play a vital role in ensuring swift resolution and coverage.

To benefit from this policy, investors must monitor account statements regularly and immediately notify their intermediary in case of suspicious activity. SEBI and depositories have issued clear guidelines on protecting investor interests through secure authentication, two-factor verification, and transparent grievance redressal mechanisms. These steps collectively reinforce the financial system’s integrity and enhance investor trust.

While the Zero Liability Policy shields investors from losses they did not cause, it also emphasizes responsible investing behavior. Using strong passwords, avoiding third-party sharing of credentials, and trading only through registered intermediaries are essential best practices. By staying informed and vigilant, investors can minimize risks and fully leverage the protections available under SEBI’s investor protection framework.

In summary, the Zero Liability Policy acts as a safety net for investors in India’s capital markets. It aligns with SEBI’s mission to foster transparency, accountability, and trust—ensuring that every investor enjoys a secure and fair trading experience.