| 1. Registration of Clients: |
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Persons are added as clients only after they have had a meeting with the director / sub-broker / employee of the company.
The Application forms for opening an account are issued only when the management is satisfied with the client’s financial capacity to trade in stock market and after the prospective client provides the valid reference for his account.
Know your client form duly complying with the mandatory requirements specified by the SEBI & Exchange are processed further along with pre-franked Agreement / Stamp paper of requisite amount, Supporting documents, proof of bank account, etc are collected from all the clients. The forms are accepted only after they have been duly filled by the client.
The company has the policy of approval of all application forms by the Director of the company before allowing trading to applicant.
The details are entered in the back office software by the maker of the document. Further a senior person acts like a checker to see that the details have been properly entered in the back office software to avoid any issue in future.
Walk-in clients are not entertained and only clients through reference are enrolled.
The client registration modalities are carried out in-house and not outsourced.
The documents are stored at the office and filed properly for easy retrieval whenever required.
The clients only through reference are entertained. The financial capability of the client is also assessed from various parameters. 2 years balance sheet is taken from corporate clients. The individual clients are not comfortable providing the financial document, and hence a declaration is considered on the basis of the comfort of the organization vis a vis the client.
The financial capability of the client is assessed on the basis of discussion / disclosure / income tax document like ITR return or Income tax order.
With reference to updating of clients financial information, the clients are requested in the statement of funds sent on quarterly basis to provide the details. Client have also been sent draft letter for providing the feedback. The client information has been received from some of the clients.
With reference to the other particulars of the client information, the same is checked on the basis of cheque received for bank information, demat receipts for demat account and return of posts for check of addresses. Additionally the clients are given reminders in the quarterly statements to provide update on the changes, if any.
We have proper maker checker concept to avoid misuse of information provided in the KYC.
Any change in address, e-mail id, contact details, etc is entertained on proper written request.
In-person Verification is conducted by the various employees of the company at the head office and at the branches. In case of clients not located at branch, they personally come to the office for opening of account or a company employee visits them in person to carry out in-person verification.
The duly executed client registration documents are sent to clients by courier along with the welcome letter or the documents are handed manually to the client.
The UCC is uploaded by the back office department and the compliance officer or manager of the Client Registration process carries out this activity before any trades are inputted on behalf of the client.
We don’t have any separate marketing division and no norms are specified for the same.
We have not launched any promotional schemes till date.
The clients are informed about the risk associated in equity / derivatives / securities trading at the time of their registration.
We don’t offer any type of freebies like free demat a/c, etc. to our clients.
Client is registered only after verification of PAN from the website of Income Tax department also verifying that the prospective clients name do not appear in SEBI ban / debarred list. |
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| 2. Closure of client accounts: |
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On the request of the client in writing, the client account can be suspended temporarily and same can be activated on the written request of the client only. During the period client account is suspended, the market transaction in the client account will be prohibited. However client shares/ledger balance settlement can take place.
On the request of the client in writing the client account can be closed provided the client account is settled. If the client wants to reopen the account in that case client has to again complete the KYC requirement.
Notwithstanding anything to the contrary stated in the agreement the stock broker shall be entitled to terminate the agreement with immediate effect in any of the following circumstances: |
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- If the action of the client are prima facie illegal / improper or such as to manipulate the price of any securities or disturb the normal/proper functioning of securities or disturb the normal/proper functioning of the market either alone or in conjunction with others.
- If there is any commencement of a legal process against the client under any law in force;
- On the death/lunacy or other disability of the Client;
- If the client being a partnership firm has any steps taken by the Client and/or its partners for dissolution of the partnership;
- If the Client suffers any adverse material change in his/her/its financial position or defaults in any other agreement with the Stock broker;
- If there is reasonable apprehension that the Client is unable to pay its debts or the Client has admitted its inability to pay its debts, as they become payable
- If the Client is in breach of any terms, conditions or covenants of this Agreement;
- If the Client has made any material misrepresentation of facts, including (without limitation) in relation to the Security
- If a receiver, administrator or liquidator has been appointed or allowed to be appointed of all or any part of the undertaking of the Client
- If the Client have taken or suffered to be taken any action for its reorganization, liquidation or dissolution;
- If the Client has voluntarily or compulsorily become the subject of proceedings under any bankruptcy or insolvency law or being a company, goes into liquidation or has a receiver appointed in respect of its assets or refers itself to the Board for Industrial and Financial Reconstruction or under any other law providing protection as a relief undertaking;
- If any covenant or warranty of the Client is incorrect or untrue in any material respect;
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Inactive Client account: - Client account will be considered as inactive if the client does not trade for a period of one year. Calculation will be done at the beginning of every month and those clients who have not traded even a single time will be considered as inactive. The shares/ credit ledger balance if any will be transferred to the client within one week of identifying the client as inactive. The client has to make written request for reactivation of their account. Trading in Exchange is in Electronic Mode based on VSAT, Leased line, ISDN, Modem and VPN, combination of technologies and computer systems to place and route orders. |
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| 3. Dormant account: |
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Client account will be considered as inactive if the client does not trade in any of the segment of any of the Exchanges for a minimum period of 1 year. Calculation will be done from the last trading day. The shares and the ledger balances will be transferred on request. The client has to make a written request for reactivation of their account and the account will be activated after fulfilling all the latest KYC requirements. |
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| 4. Receiving, validating & entering the orders of clients in trading platform: |
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The Organization setup is small and all the client are personally known to management/sub broker, their financial position is known and the dealer is aware of the risk appetite of the each and every client which helps in better control.
The company has restricted the access to the dealing office only to the authorized persons who are dealers and sub brokers of the company. The company has put an electronic access control system.
The approved clients are informed of the dealers / sub-broker who would be responsible for receiving, validating and entering the orders on behalf of them.
The orders are received over phone, via e-mail, through sub-brokers, personal instructions when they are in the office.
To give better & personal service to the clients they are divided group wise among the dealers so that particular dealer can serve a particular group of clients which helps dealer to understand client investment strategy in a better way & serve them accordingly. The concerned dealers have access of back office system in which the clients balance positions are updated daily and on the basis of the same the exposure is determined by the dealer. In cases exceeding the normal trading pattern, the dealer contacts the front office head to decide on the trade. In case of sub-broker having TWS at their office, an overall exposure is fixed on the TWS, thus restricting over trading. The orders are entered instantly as given by the client without any delay.
On execution of valid order into trade, dealers confirm the trade with the client so as to avoid any future dispute.
At the end of the trading hours, the dealer informs the clients about the execution of the orders placed by the clients.
After market hours, back office team informs the client about their executed trades for the day and also about their obligation towards Pay-in & Pay-out of funds & securities for the particular day. |
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| 5. Collection & release of payments to client: |
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Some of the clients have given consent to the company to maintain running accounts on their behalf to avoid trouble of receiving / paying funds on daily basis. As decided by Risk Management Officer in case of some clients no trades are done until the funds are received in advance.
The company collects and releases funds through banking channels i.e. Account Payee Cheques & Demand Drafts only.
The account team keeps proper co-ordination with DP team regarding Pay-in of securities by clients and then releases the Pay-out cheques to the client. In case of shortage the amount is released as per the decision of managing director to give part money or not.
Company releases payments of the clients either by hand delivery to the authorized persons intimated by the clients or by courier to the client’s correspondence address as informed by the clients. In some cases cheques are directly deposited into client’s account.
The collections of funds from clients are also transacted in above manner, cheques are sometimes directly deposited by the clients. |
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| 6. Collection & maintenance of margins: |
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The company transacts on behalf of clients in cash & F&O. On the basis of the risk management procedures margins are collected as required.
The company is not providing margin trading facility. |
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| 7. Collection & delivery of securities to client: |
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The company has received authority from clients to maintain running accounts on their behalf to avoid trouble of receiving / paying securities on daily basis. As decided by RMO in case of some clients no trades are done until the securities are received in advance. Proper record for securities held of clients is maintained.
The company receives the deliveries of securities from the clients in the pool accounts intimated to the clients.
For delivery of securities company has activated auto payout facility in clients demat account, for which daily report is been sent to the Clearing House.
The company also reconciles its pool, principle, CISA and client beneficiary account on a daily basis.
The company has subscribed for Speed-e & Easiest facility to monitor online the activities of pool and other accounts. |
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8. Sending Contract Notes, Daily Margin Statements, Quarterly Statement of accounts
to
Clients: |
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We have the policy of sending Contract Notes and Daily Margin Statements to Clients electronically to their email ID within 24 hours of execution of trades. The Contract notes and Daily Margin Statements are displayed on our web site. The clients can login to website and view their contract notes. The mail which is bounced, we send them physical contract notes and margin statement. The Quarterly Statement of accounts is sent electronically in the first week of new quarter and also physical copies are also sent to them. |
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| 9. Risk Management |
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We have margin based RMS system. Client may take exposure upto the amount of margin available with us. Client may not be allowed to take position in case of non-availability /shortage of margin as per our RMS policy of the company. The existing position of the client is also liable to square off /close out without giving notice due to shortage of margin / non making of payment for their payin obligation /outstanding debts. |
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| 10. Liquidation of client position |
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Without prejudice to the stock brokers other right (Including the right to refer the matter to arbitration) the stock broker shall be entitled to liquidate/close out all or any of the clients position without giving notice to the client for non payment of margins or other amounts including the pay in obligation, outstanding debts etc and adjust the proceeds of such liquidation/close out if any against the clients liabilities / obligations.
The policy and procedures for settlement of shortages in obligations arising out of internal netting of trade is as under: |
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- On Pay- In- Day
The short delivering client is debited by an amount (provisional) equivalent to closing price of T+1 day. The internal shortages will be purchased from the market and the purchase considerations (brokerage, other charges, statutory taxes & levies) is debited to the short delivering (seller) client.
- On Auction-Day
Provisional amount debited will be reversed on this day. If the securities cannot be purchased from market due to any force majeure condition, the short delivering seller is debited at the closing rate on T+2 day or Auction Day on exchange +10% where the delivery is matched partially or fully at the exchange clearing, the delivery and debits/credits shall be as per the Exchange debits/credits shall be as per the Exchange debits and credits.
- In cases of securities having corporate actions all cases of short delivery of cum transactions which cannot be auctioned on cum basis or where the cum basis auctioned on cum basis or where the cum basis auction payout is after the book closure / record date, would be compulsorily closed out at higher of 10% above the official closing price on the auction day or the highest traded price from first trading day of the settlement till the auction day.
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| 11. Policy of internal shortage |
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The internal shortage if any existing within the organization is informed to the exchange so that proper auction of the same can be done by the exchange and the journals / bills / debit notes for the same are debited to the client in whose account the shortfall has occurred.
In case if an auction is not made by the exchange then both the clients are appraised of the situation and in case of the client in whose account the internal shortage has occurred, the buying transaction is done in the exchange and when after 2 days the shares are received from the exchange, the shares are delivered to the old buying clients who could not receive the shares due to internal shortage. |
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| 12. Transfer of Trades: |
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If a trade is executed on a wrong code and if it is detected during bill processing time we call up the client in which wrong trade is executed and we collect no objection letter from both the clients and then transfer the trades |
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| 13. Monitoring of Sub broker & Branches: |
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A person is considered for sub broker only after assessing the financial position, business capacity, experience, past operations etc. A sub broker is personally interviewed by managing director and only if found proper, further action for making a sub broker by SEBI / Exchange application is considered.
Sub brokers usually operate from the registered office of the company and there all activities are under the observations of the organization. The records of sub brokers are periodically verified by company officials to verify that all statutory and other dues are being paid on timely basis by the sub brokers.
In case of sub broker operating from the premise other than registered office of the company for which company officials takes surprise visits of such locations twice in a month to assure their activities are in compliance with the regulations.
The organization has proper demarcation of work and responsibility within the organization. The PI-PO staff intimates the client for their payin obligations on a daily basis at the same time they confirm the payouts to the clients on a daily basis. They also reconcile all their records on daily as well as weekly basis. |
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| 14. Operations & Compliance requirements: |
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The role of Compliance officer is to monitor the operations and compliance requirements of the organization.
The company has the system of getting its accounts monthly audited and to see all compliances are been done on a timely basis.
The company has also implemented compliance calendar to keep proper control over the operations and compliances. |
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| 15. Payment of Dividend: |
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The company receives dividend on the client shares directly in the client bank account.
The company pays all the dividends received on behalf of clients with in 90 days of receiving the same. The client dividend account is nullified every month to see that client dividend is credited to respective client account. |
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| 16. Continuity planning / Alternate plan in case of disaster etc.: |
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For Front office operations the company has provided with the power backup to all dealing terminals so as to compensate for power supply interruption. The front office has connectivity to exchange via two leased lines.
For Back office Operations Company takes daily backup into hard disk of server. Apart from internal backup company also takes weekly external backup on DVDs and keeps copy of it in a remote place (Managing Director’s residence) for safety custody.
The backups are regularly tested to see their usability in case of any disaster. |
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| 17. Investor Grievance Policy: |
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The register of complaints is maintained at the head office under the observation and control of the director.
All the clients are informed that in case of any grievance they have an option of writing the same in the Investor Grievance Register maintained at the office or can report the grievance through email or can meet the director to discuss any point of observation as may be required.
The e-mail id for redressal of investor grievances is informed to the clients by the quarterly statements sent and even on the CONTRACT NOTES sent to the client or website of the organization.
There are no investor complaints pending with any of the Exchanges.
We have not received any complaint till date and hence no complaints are recorded in the Register of Complaints.
The director / senior employee is responsible to see that there are no investors pending.
There is an escalation mechanism in case if any investor complaint does not get redressed by the director incharge or by the senior staff.
As no complaints are received, requirement of analysis is not required, however the same will be analysed as and when complaints are received.
The director personally looks into the regular operations and monitors and controls the operations to ensure that cash, cheque and demand drafts received from clients at branches are properly accounted in the respective client ledger only.
Any transactions entered into for dormant accounts (not being operated in last 2 years), then before entering the transaction the dealers enquires about the same from the head dealer / director before entering the trade and thus enters a trade only after verifying the authenticity of client entering the order.
No employee of the organization at the HO or branches are exercising POA to operate client’s bank and demat accounts. |
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| 18. Allotment, Surrender of trading terminals |
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The Limit setting of the terminals is decided on the basis of the funds margin and securities value given to the member
In case any terminal gets surrendered then the client would be mapped to the head office for further trading and in case if the client specifies any particular location from where he want to trade then the client is mapped to that terminal.
The terminals are installed / activated only after complying with the regulatory requirement of informing Exchange and uploading of the details of the authorized user.
The member’s controls and the auditors during their visit check that only authorized trading software is used by the branch offices and sub-broker offices.
The visits are made by the company staff or the auditors during their visit the branches check that only authorized persons are operating the terminal. Additionally the company carries out proper due diligence before opening of the branch or sub-broker is carried out. The directors / senior management spend regular time to access the working of the branches and sub-brokers and various concerns including the volume vis a vis clients vis a vis clients profile and activity pattern are considered. |
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| 19. Sales Practices followed by the Trading Member |
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The company does not have any separate sales / marketing department. The company is very particular about the client being registered and hence clients coming through reference or financial standing are only registered.
The company does not have any marketing division and has not launched any promotional schemes for registration / enrollment of clients.
The clients are appraised about the risk disclosure document and make them aware of the contents regarding the risk associated with the securities market.
The company does not offer any freebies to the clients. All the services provided are charged as per the agreed terms. |
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| 20. Monitoring of debit balances |
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The monitoring of the debits of clients is done on daily basis.
The we have a system of periodic reconciliation of client accounts and even try to nullify the account on periodic basis at the comfort of the client so as to make the balances Nil. The statement of accounts sent on quarterly basis are confirmed by some clients by email or by physical documents.
We don’t have any old debts and hence cannot comment on the recovery process. However, we would go through the legal methods like arbitration or court of law.
We are not in the funding activity and hence we don’t charge any penal interest for long outstanding debts, and regular followup are made to recover the money on time from due clients.
In respect of clients having outstanding debit balances, the past history of trading and the financial standing is considered and depending on the risk perception additional trading would be allowed or the trading for the client may be stopped if required. |
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| 21. Power of Attorney |
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POA has been taken from clients for meeting the specified purposes.
The POA provides total control on the Depository account or Bank account of the client.
Only few employees of the company are authorised to operate the POA. The persons authorised are either directors or employees of the company with long standing and confidence. Thus the chances of misutilisation of the POA is very bleak.
The POA is taken in the name of company only and persons authorised by the board are only further registered with the depository or the bank. |
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| 22. Capacity of Systems with reference to volume |
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We have limited number of clients and accordingly there is an adequate system in place to support the volume of the organization.
The Trading Member has Neat terminals of the Exchange as the front office software.
The Back Office operations of the organization are supported by the software Techexcel from the empanelled vendor |
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