a) Policy for penny Stock
A stock that trades at a relatively low price and market capitalization. These types of stocks are generally considered to be highly speculative and high risk because of their lack of liquidity, large bid-ask spreads, small capitalization and limited following and disclosure. Depend of the market condition and RMS policy of the company. RMS reserve the right to refuse to provide the limit in Penny stocks and losses if any on account of such refusal shall be borne by client only.
b) Setting up client’s exposure limits
The stock broker may from time to time impose and vary limits on the orders that the client can place through the stock broker’s trading system (including exposure limits, turnover limits, limits as to the number, value and/or kind of securities in respect of which orders cab be placed etc.). The client is aware and agrees that the stock broker may need to vary or reduce the limits or impose new limits urgently on the basis of the stock broker’s risk perception and other factors considered relevant by the stock broker including but not limited to limits on account of exchange/SEBI directions/limits (such as broker level/market level limits in security specific/volume specific exposures etc.), and the stock broker may be unable to inform the client of such variation, reduction or imposition in advance. The client agrees that the stock broker shall not be responsible for such variation, reduction or imposition or the client’s inability to route any order through the stock broker’s trading system on account of any such variation, reduction or imposition of limits. The client further agrees that stock broker may at any time, at its sole discretion and without prior notice, prohibit or restrict the client’s ability to place orders or trade in securities through the stock broker, or it may subject any order placed by the client to a review before its entry into the trading systems any may refuse to execute/allow execution of orders due to but not limited to the reason of lack of margin/securities or the order being outside the limits set by stock broker/exchange/SEBI and any other reasons which the stock broker may deem appropriate in the circumstances. The client agrees the losses, if any on account of such refusal or due to delay caused by such review, shall be borne exclusively by the client alone.
c) Policy on margin collection:
Except for running accounts, we collect 10% margin for delivery value of trades above Rs.5,00,000/- (Five Lacs) on a single transaction day.
d) Applicable brokerage rate :
Brokerage will be charged within the limits prescribed by SEBI/Exchange.
e) Imposition of penalty / delayed payment charges
Clients will be liable to pay amount due on pay in day or otherwise it will be sold in market as per Bye Law 247 (E) (5), except in the cases covered by the “Running Account Authorisation” given by the client to the stock broker.
The client agrees that the stock broker may impose fines / penalties for any orders /trades / deals / actions of the client which are contrary to this agreement / rules / regulation / bye laws of the exchange or any other law for the time being in force, at such rates and in such form as it may deem fit. Further where the stock broker has to pay any fine or bear any punishment from any authority in connection with / as a consequence of / in relation to any of the orders / trades / deals / actions of the client, the same shall be borne by the client.
f) The right to sell client’s securities or close clients’ position, without giving notice to the client, on account of non-payment of client’s dues
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 our 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/obligation.
The client shall ensure timely availability of funds/securities in form and manner at designated time and in designated bank and depository accounts(s), for meeting his/her/its pay in obligation of funds and securities. Any and all losses and financial charges on account of such liquidations/closing out shall be charged to & born by the client. In cases of securities lying in margin account/client beneficiary account and having corporate actions like Bonus, stock split, Right issue etc, for margin or other purpose the benefit of shares due to received under Bonus, stock split, Right issue etc will be given when the shares is actually received in the stock broker designated account.
In case the payment of the margin / security is made by the client through a bank instrument, the stock broker shall be at liberty to give the benefit / credit for the same only on the realization of the funds from the said bank instrument etc, at the absolute discretion of the stock broker. Where the margin / security is made available by way of securities or any other property, the stock broker is empowered to decline its acceptance as margin / security &/or to accept it at such reduced value as the stock broker may deem fit by applying haircuts or by valuing it by marking it to market or by any other method as the stock broker may deem fit in its absolute discretion.
The stock broker has the right but not the obligation, to cancel all pending orders and to sell/close/liquidate all open positions/securities/shares at the pre-defined square off time or when Mark To Market (M-T-M) percentage reaches or crosses stipulated margin percentage, whichever is earlier. The stock broker will have sole discretion to decide referred stipulated margin percentage depending upon the market condition. In the event of such square off, the client agrees to bear all the losses based on actual executed prices, the client shall also be solely liable for all and any penalties and charges levied by the exchange(s).
g) Shortages in obligations arising out of internal netting of trades
Stock broker shall not be obliged to deliver any securities or pay any money to the client unless and until the same has been received by the stock broker from the exchange, the clearing corporation / clearing house or other company or entity liable to make the payment and the client has fulfilled his/her/its obligations first.
Stock broker shall not be obliged to deliver any securities or pay any money to the client unless and until the same has been received by the stock broker from the exchange, the clearing corporation / clearing house or other company or entity liable to make the payment and the client has fulfilled his/her/its obligations first.
a) The Short delivering client is debited by an amount equivalent to amount stated in auction report generated from Stock Exchange data (inclusive of all statutory taxes and levies) is debited to the short delivering seller client along with reversal entry of provisionally amount debited earlier.
b) If 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 where the delivery is matched partially or fully at the Exchange clearing, the delivery and debits/ credits shall be as per Exchange Debits and Credits.
c) 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 compulsory closed out as per rules, regulations & Bye-Law prevails at the time of such event.
h) Conditions under which a client may not be allowed to take further position or the broker may close the existing position of a client
Client may take exposure up to the amount of limit 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 pay in obligation/ outstanding debts.
i) Temporarily suspending or closing a client’s account at the client’s request
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.
j) Deregistering a client
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:
(i) 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;
(ii) If there is any commencement of a legal process against the client under any law in force;
(iii) On the death/lunacy or other disability of the Client;
(iv) If the client being a partnership firm, has any steps taken by the Client and/or its partners for dissolution of the partnership;
(v) If the Client suffers any adverse material change in his/her/its financial position or defaults in any other agreement with the Stock Broker;
(vi) 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;
(vii) If the Client is in the breach of any term, condition or covenant of this Agreement;
(viii) If the Client has made any material misrepresentation of facts, including (without limitations) in relation to the Security;
(ix) 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;
(x) If the Client have taken or suffered to be taken any action for its reorganization, liquidation or dissolution;
(xi) 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;
(xii) If any covenant or warranty of the Client is incorrect or untrue in any material respect;
k) Inactive Client Account
Client account will be considered as inactive if the client does not trade for the period of two years. 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 the indentifying the client as inactive. The client has to register again by entering into fresh KYC forms and agreements. 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. I / we understand that there exists a possibility of communication failure or system problems or slow or delayed response from system or trading halt or any break down in our back office/front end system, or any such other problems/glitch whereby not being able to establish access to the trading system/network, which may be beyond your control and may result in delay in processing or not processing buy or sell Orders either in part or full. I /we shall be fully liable and responsible for any such problem/fault.
Client Acceptance of Policies and Procedures stated hereinabove:
I / we have fully understood the same and do hereby sign the same and agree not to call into question the validity, enforceability and applicability of any provision/clauses this document any circumstances what so ever. These Policies and Procedures may be amended / changed unilaterally by the broker, providing the change is informed to me / us with through any one or more means or methods. I /we agree never to challenge the same on any grounds including delayed receipt / non receipt or any other reasons whatsoever. These Policies and Procedures shall always be read always be read along with the agreement and shall be compulsorily referred to while deciding any dispute / difference or claim between me / us and stock broker before any court of law / judicial / adjudicating authority including arbitrator / mediator etc.
This is must read for everybody dealing in stock market
Because ignorance of law is not an excuse in the court of law
Due to the tightened security and increased vigilance in the wake of threats emanating from increasing terrorism, any failure on our part to discharge our duties cast on us under the applicable laws or we becoming an instrumental or a part of the chain in certain transaction, even if unknowingly or ignorantly, may land us in trouble.There is an Act called Prevention of Money Laundering Act 2002.(PMLA)The purpose of this act is to prevent the financing of terrorism and to prevent laundering of money i.e. to legalize or officialize or canalize the money generated from illegal activities like drug trafficking, organized crimes, hawala rackets and other serious crimes.This act is a part of the Global measures being taken by all the countries under the initiatives of UN agencies.It is applicable to all SEBI Registered brokers/sub-brokers and other financial institution who are dealing in any kind of financial assets.It is an obligation of the entities to whom this Act is applicable, to report certain kind of transactions routed through them to FINANCIAL INTELIGENCE UNIT, a department specially set up to administer this Act under the Ministry of Finance.The transactions which are supposed to be reported are cash transactions above rupees ten lakhs or series of cash transactions below ten lakhs but aggregating to above ten lakhs in a month or its equivalent in any foreign currency and the transactions which may not be in cash but suspicious in nature.Any such above types of transaction, though not executed but attempted and failed are also required to be reported.The suspicious transaction can be related to the transaction under the circumstances such as;Clients whose identity verification seems difficult or clients that appear not to cooperate;Asset management services for clients where the source of the funds is not clear or not in keeping with clients apparent standing /business activity;Clients based in high risk jurisdictions;Substantial increases in business without apparent cause;Clients transferring large sums of money to or from overseas locations with instructions for payment in cash;Attempted transfer of investment proceeds to apparently unrelated third parties;Businesses undertaken by offshore banks/financial services,Businesses reported to be in the nature of export/import of small items.Unusual transactions by Clients of Special Categories (CSCs).Clients of Special Categories may include;NRI/HNI/Trust/Charities/NGO/Organizations receiving donationsCompanies having close family shareholdings or beneficial ownershipPolitically Exposed PersonsCompanies offering foreign exchange offeringsClients in high risk countriesNon face to face clientsClients with dubious reputation as per public information availableNo trading or demat account can be opened in the name of entity whose name is listed on the banned entity list being maintained at United Nation’s website at http://www.un.org/sc/committees/1267/consolist.shtmlWhile opening the new accounts all the prescribed procedures of KYC and Client identifications should strictly be followed in the context of ensuring the compliance under this act.All the records of transactions and client identifications must be preserved in a manner which can be promptly retrieved and reported to the authorities in the specified format.This is the highlights of the requirements under the Act. Sub-brokers / authorised persons / Remissers are advised to go through the SEBI’s master circular at http://www.sebi.gov.in/circulars/2010/mastercircular/MasterCircular.pdf for detailed information and understanding and also to visit the website of FIU-IND at http://fiuindia.gov.inThe end clients are advised to co-operate with us by providing the additional information / documents, if asked for during the course of your dealings with us to ensure the compliance requirements under this Act.As a responsible citizen, it is our statutory as well as moral duty to be vigilant and to refrain from temptation of easy monetary gains, by knowingly or unknowingly supporting the people who are involved in the activities which are endangering our freedom and causing damage to the nation and to us as well.For any further clarifications or information on the subject, Mr. Tejas Chitharia, 22722814
