REGULATORY DOCUMENTS
(i) RIGHTS AND OBLIGATIONS OF STOCK BROKER AND CLIENTS AS PRESCRIBED BY SEBI AND STOCK EXCHANGES
1. The client shall invest/trade in those securities/contracts/other instruments admitted to dealings on the Exchanges as defined in the Rules Byelaws and Regulations of Exchanges/ Securities and Exchange Board of India (SEBI) and circulars/notices issued there under from time to time.
2. The stock broker sub-broker and the client shall be bound by all the Rules Byelaws and Regulations of the Exchange and circulars/notices issued there under and Rules and Regulations of SEBI and relevant notifications of Government authorities as may be in force from time to time.
3. The client shall satisfy itself of the capacity of the stock broker to deal in securities and/or deal in derivatives contracts and wishes to execute its orders through the stock broker and the client shall from time to time continue to satisfy itself of such capability of the stock broker before executing orders through the stock broker.
4. The stock broker shall continuously satisfy itself about the genuineness and financial soundness of the client and investment objectives relevant to the services to be provided.
5. The stock broker shall take steps to make the client aware of the precise nature of the Stock broker’s liability for business to be conducted including any limitations the liability and the capacity in which the stock broker acts.
6. The sub-broker shall provide necessary assistance and co-operate with the stock broker in all its dealings with the client(s).
CLIENT INFORMATION
7. The client shall furnish all such details in full as are required by the stock broker in “Account Opening Form” with supporting details made mandatory by stock exchanges/SEBI from time to time.
8. The client shall familiarize himself with all the mandatory provisions in the Account Opening documents. Any additional clauses or documents specified by the stock broker shall be non-mandatory as per terms & conditions accepted by the client.
9. The client shall immediately notify the stock broker in writing if there is any change in the information in the ‘account opening form’ as provided at the time of account opening and thereafter; including the information on winding up petition/insolvency petition or any litigation which may have material bearing on his capacity. The client shall provide/update the financial information to the stock broker on a periodic basis.
10. The stock broker and sub-broker shall maintain all the details of the client as mentioned in the account opening form or any other information pertaining to the client confidentially and that they shall not disclose the same to any person/authority except as required under any law/regulatory requirements. Provided however that the stock broker may so disclose information about his client to any person or authority with the express permission of the client.
MARGINS
11. The client shall pay applicable initial margins withholding margins special margins or such other margins as are considered necessary by the stock broker or the Exchange or as may be directed by SEBI from time to time as applicable to the segment(s) in which the client trades. The stock broker is permitted in its sole and absolute discretion to collect additional margins (even though not required by the Exchange Clearing House/Clearing Corporation or SEBI) and the client shall be obliged to pay such margins within the stipulated time.
12. The client understands that payment of margins by the client does not necessarily imply complete satisfaction of all dues. In spite of consistently having paid margins the client may on the settlement of its trade be obliged to pay (or entitled to receive) such further sums as the contract may dictate/require.
TRANSACTIONS AND SETTLEMENTS
13. The client shall give any order for buy or sell of a security/derivatives contract in writing or in such form or manner as may be mutually agreed between the client and the stock broker. The stock broker shall ensure to place orders and execute the trades of the client only in the Unique Client Code assigned to that client.
14. The stock broker shall inform the client and keep him apprised about trading/settlement cycles delivery/payment schedules any changes therein from time to time and it shall be the responsibility in turn of the client to comply with such schedules/procedures of the relevant stock exchange where the trade is executed.
15. The stock broker shall ensure that the money/securities deposited by the client shall be kept in a separate account distinct from his/its own account or account of any other client and shall not be used by the stock broker for himself/itself or for any other client or for any purpose other than the purposes mentioned in Rules Regulations circulars notices guidelines of SEBI and/or Rules Regulations Bye-laws circulars and notices of Exchange.
16. Where the Exchange(s) cancels trade(s) suo moto all such trades including the trade/s done on behalf of the client shall ipso facto stand cancelled stock broker shall be entitled to cancel the respective contract(s) with client(s).
17. The transactions executed on the Exchange are subject to Rules Byelaws and Regulations and circulars/notices issued there under of the Exchanges where the trade is executed and all parties to such trade shall have submitted to the jurisdiction of such court as may be specified by the Byelaws and Regulations of the Exchanges where the trade is executed for the purpose of giving effect to the provisions of the Rules Byelaws and Regulations of the Exchanges and the circulars / notices issued there under.
BROKERAGE
18. The Client shall pay to the stock broker brokerage and statutory levies as are prevailing from time to time and as they apply to the Client’s account transactions and to the services that stock broker renders to the Client. The stock broker shall not charge brokerage more than the maximum brokerage permissible as per the rules regulations and bye-laws of the relevant stock exchanges and/or rules and regulations of SEBI.
LIQUIDATION AND CLOSE OUT OF POSITION
19. Without prejudice to the stock broker’s other rights (including the right to refer a matter to arbitration) the client understands that the stock broker shall be entitled to liquidate/close out all or any of the client’s positions for nonpayment of margins or other amounts outstanding debts etc. within 5 days from the date of pay in without intimating to the client and adjust the proceeds of such liquidation/ close out if any against the client’s liabilities/ obligations. Any and all losses and financial charges on account of such liquidation/closing-out shall be charged to and borne by the client.
20. In the event of death or insolvency of the client or his/its otherwise becoming incapable of receiving and paying for or delivering or transferring securities which the client has ordered to be bought or sold stock broker may close out the transaction of the client and claim losses if any against the estate of the client. The client or his nominees successors heirs and assignee shall be entitled to any surplus which may result there from. The client shall note that transfer of funds/securities in favor of a Nominee shall be valid discharge by the stock broker against the legal heir.
21. The stock broker shall bring to the notice of the relevant Exchange the information about default in payment / delivery and related aspects by a client. In case where defaulting client is a corporate entity/partnership/proprietary firm or any other artificial legal entity then the name(s) of Director(s) / Promoter(s) / Partner(s) / Proprietor as the case may be shall also be communicated by the stock broker to the relevant Exchange(s).
DISPUTE RESOLUTION
22. The stock broker shall provide the client with the relevant contact details of the concerned Exchanges and SEBI.
23. The stock broker shall co-operate in redressing grievances of the client in respect of all transactions routed through it and in removing objections for bad delivery of shares rectification of bad delivery etc.
24. The client and the stock broker shall refer any claims and/or disputes with respect to deposits margin money etc. to arbitration as per the Rules Byelaws and Regulations of the Exchanges where the trade is executed and circulars/notices issued there under as may be in force from time to time.
25. The stock broker shall ensure faster settlement of any arbitration proceedings arising out of the transactions entered into between him vis-à-vis the client and he shall be liable to implement the arbitration awards made in such proceedings.
26. The client/stock-broker understands that the instructions issued by an authorized representative for dispute resolution if any of the client/stock-broker shall be binding on the client/stock
TERMINATION OF RELATIONSHIP
27. This relationship between the stock broker and the client shall be terminated; if the stock broker for any reason ceases to be a member of the stock exchange including cessation of membership by reason of the stock broker’s default, death, resignation or expulsion or if the certificate is cancelled by the Board.
28. The stock broker, sub-broker and the client shall be entitled to terminate the relationship between them without giving any reasons to the other party, after giving notice in writing of not less than one month to the other parties. Notwithstanding any such termination, all rights, liabilities and obligations of the parties arising out of or in respect of transactions entered into prior to the termination of this relationship shall continue to subsist and vest in / be binding on the respective parties or his / its respective heirs, executors, administrators, legal representatives or successors, as the case may be.
29. In the event of demise/insolvency of the sub-broker or the cancellation of his/its registration with the Board or/withdrawal of recognition of the sub-broker by the stock exchange and/or termination of the agreement with the sub broker by the stock broker, for any reason whatsoever, the client shall be informed of such termination and the client shall be deemed to be the direct client of the stock broker and all clauses in the ‘Rights and Obligations’ document(s) governing the stock broker, subbroker and client shall continue to be in force as it is, unless the client intimates to the stock broker his/its intention to terminate their relationship by giving a notice in writing of not less than one month.
ADDITIONAL RIGHTS AND OBLIGATIONS
30. The stock broker shall ensure due protection to the client regarding client’s rights to dividends rights or bonus shares etc. in respect of transactions routed through it and it shall not do anything which is likely to harm the interest of the client with whom and for whom they may have had transactions in securities.
31. The stock broker and client shall reconcile and settle their accounts from time to time as per the Rules Regulations ByeLaws Circulars Notices and Guidelines issued by SEBI and the relevant Exchanges where the trade is executed.
32. The stock broker shall issue a contract note to his constituents for trades executed in such format as may be prescribed by the Exchange from time to time containing records of all transactions including details of order number trade number trade time trade price trade quantity details of the derivatives contract client code brokerage all charges levied etc. and with all other relevant details as required therein to be filled in and issued in such manner and within such time as prescribed by the Exchange. The stock broker shall send contract notes to the investors within one working day of the execution of the trades in hard copy and/or in electronic form using digital signature.
33. The stock broker shall make pay out of funds or delivery of securities as the case may be to the Client within one working day of receipt of the payout from the relevant Exchange where the trade is executed unless otherwise specified by the client and subject to such terms and conditions as may be prescribed by the relevant Exchange from time to time where the trade is executed.
34. The stock broker shall send a complete ‘Statement of Accounts’ for both funds and securities in respect of each of its clients in such periodicity and format within such time as may be prescribed by the relevant Exchange from time to time where the trade is executed. The Statement shall also state that the client shall report errors if any in the Statement within such time as may be prescribed by the relevant Exchange from time to time where the trade was executed from the receipt thereof to the Stock broker.
35. The stock broker shall send daily margin statements to the clients. Daily Margin statement should include inter-alia details of collateral deposited collateral utilized and collateral status (available balance/due from client) with break up in terms of cash Fixed Deposit Receipts (FDRs) Bank Guarantee and securities.
36. The Client shall ensure that it has the required legal capacity to and is authorized to enter into the relationship with stock broker and is capable of performing his obligations and undertakings hereunder. All actions required to be taken to ensure compliance of all the transactions which the Client may enter into shall be completed by the Client prior to such transaction being entered into.
ELECTRONIC CONTRACT NOTES (ECN)
37. In case client opts to receive the contract note in electronic form he shall provide an appropriate e-mail id to the stock broker. The client shall communicate to the stock broker any change in the email-id through a physical letter. If the client has opted for internet trading the request for change of email id may be made through the secured access by way of client specific user id and password.
38. The stock broker shall ensure that all ECNs sent through the email shall be digitally signed encrypted nontamperable and in compliance with the provisions of the ITAct 2000. In case ECN is sent through e-mail as an attachment the attached file shall also be secured with the digital signature encrypted and nontamperable.
39. The client shall note that non-receipt of bounced mail notification by the stock broker shall amount to delivery of the contract note at the e-mail ID of the client.
40. The stockbroker shall retain ECN and acknowledgement of the e-mail in a soft and nontamperable form in the manner prescribed by the exchange in compliance with the provisions of the IT Act 2000 and as per the extant rules / regulations / circulars / guidelines issued by SEBI / Stock Exchanges from time to time. The proof of delivery i.e. log report generated by the system at the time of sending the contract notes shall be maintained by the stock broker for the specified period under the extant regulations of SEBI / stock exchanges. The log report shall provide the details of the contract notes that are not delivered to the client/e-mails rejected or bounced back. The stock broker shall take all possible steps to ensure receipt of notification of bounced mails by him at all times within the stipulated time period under the extant regulations of SEBI / stock exchanges.
41. The stock broker shall continue to send contract notes in the physical mode to such clients who do not opt to receive the contract notes in the electronic form. Wherever the ECNs have not been delivered to the client or has been rejected (bouncing of mails) by the e-mail ID of the client the stock broker shall send a physical contract note to the client within the stipulated time under the extant regulations of SEBI/stock exchanges and maintain the proof of delivery of such physical contract notes.
42. In addition to the e-mail communication of the ECNs to the client the stock broker shall simultaneously publish the ECN on his designated web-site if any in a secured way and enable relevant access to the clients and for this purpose shall allot a unique user name and password to the client with an option to the client to save the contract note electronically and/or take a print out of the same.
LAW AND JURISDICTION
43. In addition to the specific rights set out in this document the stock broker sub-broker and the client shall be entitled to exercise any other rights which the stock broker or the client may have under the Rules Bye-laws and Regulations of the Exchanges in which the client chooses to trade and circulars/notices issued there under or Rules and Regulations of SEBI.
44. The provisions of this document shall always be subject to Government notifications any rules regulations guidelines and circulars/notices issued by SEBI and Rules Regulations and Bye laws of the relevant stock exchanges where the trade is executed that may be in force from time to time.
45. The stock broker and the client shall abide by any award passed by the Arbitrator(s) under the Arbitration and Conciliation Act 1996. However there is also a provision of appeal within the stock exchanges if either party is not satisfied with the arbitration award.
46. Words and expressions which are used in this document but which are not defined herein shall unless the context otherwise requires have the same meaning as assigned thereto in the Rules Byelaws and Regulations and circulars/notices issued there under of the Exchanges/SEBI.
47. All additional voluntary clauses / document added by the stock broker should not be in contravention with rules / regulations / notices / circulars of Exchanges / SEBI. Any changes in such voluntary clauses/document(s) need to be preceded by a notice of 15 days. Any changes in the rights and obligations which are specified by Exchanges/SEBI shall also be brought to the notice of the clients.
48. If the rights and obligations of the parties hereto are altered by virtue of change in Rules and regulations of SEBI or Bye-laws Rules and Regulations of the relevant stock Exchanges where the trade is executed such changes shall be deemed to have been incorporated herein in modification of the rights and obligations of the parties mentioned in this document.
INTERNET & WIRELESS TECHNOLOGY BASED TRADING FACILITY PROVIDED BY STOCK BROKERS TO CLIENT (All the clauses mentioned in the ‘Rights and Obligations’ document(s) shall be applicable. Additionally the clauses mentioned herein shall also be applicable.)
1. Stock broker is eligible for providing Internet based trading (IBT) and securities trading through the use of wireless technology that shall include the use of devices such as mobile phone laptop with data card etc. which use Internet Protocol (IP). The stock broker shall comply with all requirements applicable to internet based trading/securities trading using wireless technology as may be specified by SEBI & the Exchanges from time to time.
2. The client is desirous of investing/trading in securities and for this purpose the client is desirous of using either the internet based trading facility or the facility for securities trading through use of wireless technology. The Stock broker shall provide the Stock broker’s IBT Service to the Client and the Client shall avail of the Stock broker’s IBT Service on and subject to SEBI/Exchanges Provisions and the terms and conditions specified on the Stock broker’s IBT Web Site provided that they are in line with the norms prescribed by Exchanges/SEBI.
3. The stock broker shall bring to the notice of client the features risks responsibilities obligations and liabilities associated with securities trading through wireless technology/internet/smart order routing or any other technology should be brought to the notice of the client by the stock broker.
4. The stock broker shall make the client aware that the Stock Broker’s IBT system itself generates the initial password and its password policy as stipulated in line with norms prescribed by Exchanges/SEBI.
5. The Client shall be responsible for keeping the Username and Password confidential and secure and shall be solely responsible for all orders entered and transactions done by any person whosoever through the Stock broker’s IBT System using the Client’s Username and / or Password whether or not such person was authorized to do so. Also the client is aware that authentication technologies and strict security measures are required for the internet trading / securities trading through wireless technology through order routed system and undertakes to ensure that the password of the client and/or his authorized representative are not revealed to any third party including employees and dealers of the stock broker
6. The Client shall immediately notify the Stock broker in writing if he forgets his password discovers security flaw in Stock Broker’s IBT System discovers/suspects discrepancies/ unauthorized access through his username/password/account with full details of such unauthorized use the date the manner and the transactions effected pursuant to such unauthorized use etc.
7. The Client is fully aware of and understands the risks associated with availing of a service for routing orders over the internet/securities trading through wireless technology and Client shall be fully liable and responsible for any and all acts done in the Client’s Username/password in any manner whatsoever.
8. The stock broker shall send the order/trade confirmation through email to the client at his request. The client is aware that the order/ trade confirmation is also provided on the web portal. In case client is trading using wireless technology the stock broker shall send the order/trade confirmation on the device of the client.
9. The client is aware that trading over the internet involves many uncertain factors and complex hardware software systems communication lines peripherals etc. are susceptible to interruptions and dislocations. The Stock broker and the Exchange do not make any representation or warranty that the Stock broker’s IBT Service will be available to the Client at all times without any interruption.
10. The Client shall not have any claim against the Exchange or the Stock broker on account of any suspension interruption nonavailability or malfunctioning of the Stock broker’s IBT System or Service or the Exchange’s service or systems or nonexecution of his orders due to any link/system failure at the Client/Stock brokers/Exchange end for any reason beyond the control of the stock broker/Exchanges.
(ii) RISK DISCLOSURE DOCUMENT FOR CAPITAL MARKET AND DERIVATIVES SEGMENTS
This document contains important information on trading in Equities/Derivatives Segments of the stock exchanges. All prospective constituents should read this document before trading in Equities/ Derivatives Segments of the Exchanges. Stock exchanges/ SEBI does neither singly or jointly and expressly nor impliedly guarantee nor make any representation concerning the completeness the adequacy or accuracy of this disclosure document nor have Stock exchanges/ SEBI endorsed or passed any merits of participating in the trading segments. This brief statement does not disclose all the risks and other significant aspects of trading.
In the light of the risks involved you should undertake transactions only if you understand the nature of the relationship into which you are entering and the extent of your exposure to risk.
You must know and appreciate that trading in Equity shares derivatives contracts or other instruments traded on the Stock Exchange which have varying element of risk is generally not an appropriate avenue for someone of limited resources/limited investment and/or trading experience and low risk tolerance. You should therefore carefully consider whether such trading is suitable for you in the light of your financial condition. In case you trade on Stock exchanges and suffer adverse consequences or loss you shall be solely responsible for the same and Stock exchanges/its Clearing Corporation and/or SEBI shall not be responsible in any manner whatsoever for the same and it will not be open for you to take a plea that no adequate disclosure regarding the risks involved was made or that you were not explained the full risk involved by the concerned stock broker. The constituent shall be solely responsible for the consequences and no contract can be rescinded on that account. You must acknowledge and accept that there can be no guarantee of profits or no exception from losses while executing orders for purchase and/or sale of a derivative contract being traded on Stock exchanges.
It must be clearly understood by you that your dealings on Stock exchanges through a stock broker shall be subject to your fulfilling certain formalities set out by the stock broker which may inter alia include your filling the know your client form reading the rights and obligations do’s and don’ts etc. and are subject to the Rules Byelaws and Regulations of relevant Stock exchanges its Clearing Corporation guidelines prescribed by SEBI and in force from time to time and Circulars as may be issued by Stock exchanges or its Clearing Corporation and in force from time to time.
Stock exchanges does not provide or purport to provide any advice and shall not be liable to any person who enters into any business relationship with any stock broker of Stock exchanges and/or any third party based on any information contained in this document. Any information contained in this document must not be construed as business advice. No consideration to trade should be made without thoroughly understanding and reviewing the risks involved in such trading. If you are unsure you must seek professional advice on the same.
In considering whether to trade or authorize someone to trade for you you should be aware of or must get acquainted with the following:-
BASIC RISKS:
1.1 Risk of Higher Volatility:
Volatility refers to the dynamic changes in price that a security/derivatives contract undergoes when trading activity continues on the Stock Exchanges. Generally higher the volatility of a security/ derivatives contract greater is its price swings. There may be normally greater volatility in thinly traded securities/ derivatives contracts than in active securities/ derivatives contracts. As a result of volatility your order may only be partially executed or not executed at all or the price at which your order got executed may be substantially different from the last traded price or change substantially thereafter resulting in notional or real losses.
1.2 Risk of Lower Liquidity:
Liquidity refers to the ability of market participants to buy and/or sell securities/ derivatives contracts expeditiously at a competitive price and with minimal price difference. Generally it is assumed that more the numbers of orders available in a market greater is the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy and/or sell securities/ derivatives contracts swiftly and with minimal price difference and as a result investors are more likely to pay or receive a competitive price for securities/ derivatives contracts purchased or sold. There may be a risk of lower liquidity in some securities/derivatives contracts as compared to active securities/derivatives contracts. As a result your order may only be partially executed or may be executed with relatively greater price difference or may not be executed at all.
1.2.1 Buying or selling securities/ derivatives contracts as part of a day trading strategy may also result into losses because in such a situation securities/ derivatives contracts may have to be sold/ purchased at low/ high prices compared to the expected price levels so as not to have any open position or obligation to deliver or receive a security/ derivatives contract.
1.3 Risk of Wider Spreads:
Spread refers to the difference in best buy price and best sell price. It represents the differential between the price of buying a security/ derivatives contract and immediately selling it or vice versa. Lower liquidity and higher volatility may result in wider than normal spreads for less liquid or illiquid securities/ derivatives contracts. This in turn will hamper better price formation.
1.4 Risk-reducing orders:
The placing of orders (e.g. “stop loss” orders or “limit” orders) which are intended to limit losses to certain amounts may not be effective many a time because rapid movement in market conditions may make it impossible to execute such orders.
1.4.1 A “market” order will be executed promptly subject to availability of orders on opposite side without regard to price and that while the customer may receive a prompt execution of a “market” order the execution may be at available prices of outstanding orders which satisfy the order quantity on price time priority. It may be understood that these prices may be significantly different from the last traded price or the best price in that security/ derivatives contract.
1.4.2 A “limit” order will be executed only at the “limit” price specified for the order or a better price. However while the customer receives price protection there is a possibility that the order may not be executed at all.
1.4.3 A stop loss order is generally placed “away” from the current price of a stock/ derivatives contract and such order gets activated if and when the security/ derivatives contract reaches or trades through the stop price. Sell stop orders are entered ordinarily below the current price and buy stop orders are entered ordinarily above the current price. When the security/ derivatives contract reaches the pre-determined price or trades through such price the stop loss order converts to a market/limit order and is executed at the limit or better. There is no assurance therefore that the limit order will be executable since a security/ derivatives contract might penetrate the pre-determined price in which case the risk of such order not getting executed arises just as with a regular limit order.
1.5 Risk of News Announcements:
News announcements that may impact the price of stock/ derivatives contract may occur during trading and when combined with lower liquidity and higher volatility may suddenly cause an unexpected positive or negative movement in the price of the security/contract.
1.6 Risk of Rumors:
Rumors about companies/ currencies at times float in the market through word of mouth newspapers websites or news agencies etc. The investors should be wary of and should desist from acting on rumors.
1.7 System Risk:
High volume trading will frequently occur at the market opening and before market close. Such high volumes may also occur at any point in the day. These may cause delays in order execution or confirmation.
1.7.1 During periods of volatility on account of market participants continuously modifying their order quantity or prices or placing fresh orders there may be delays in order execution and its confirmations.
1.7.2 Under certain market conditions it may be difficult or impossible to liquidate a position in the market at a reasonable price or at all when there are no outstanding orders either on the buy side or the sell side or if trading is halted in a security/ derivatives contract due to any action on account of unusual trading activity or security/ derivatives contract hitting circuit filters or for any other reason.
1.8 System/Network Congestion:
Trading on exchanges is in electronic mode based on satellite/leased line based communications combination of technologies and computer systems to place and route orders. Thus there exists a possibility of communication failure or system problems or slow or delayed response from system or trading halt or any such other problem/glitch whereby not being able to establish access to the trading system/network which may be beyond control and may result in delay in processing or not processing buy or sell orders either in part or in full. You are cautioned to note that although these problems may be temporary in nature but when you have outstanding open positions or unexecuted orders these represent a risk because of your obligations to settle all executed transactions.
As far as Derivatives segments are concerned please note and get yourself acquainted with the following additional features:-
2.1 Effect of “Leverage” or “Gearing”:
In the derivatives market the amount of margin is small relative to the value of the derivatives contract so the transactions are ‘leveraged’ or ‘geared’. Derivatives trading which is conducted with a relatively small amount of margin provides the possibility of great profit or loss in comparison with the margin amount. But transactions in derivatives carry a high degree of risk.
You should therefore completely understand the following statements before actually trading in derivatives and also trade with caution while taking into account one’s circumstances financial resources etc. If the prices move against you you may lose a part of or whole margin amount in a relatively short period of time. Moreover the loss may exceed the original margin amount.
Futures trading involve daily settlement of all positions. Every day the open positions are marked to market based on the closing level of the index/ derivatives contract. If the contract has moved against you you will be required to deposit the amount of loss (notional) resulting from such movement. This amount will have to be paid within a stipulated time frame generally before commencement of trading on next day.
If you fail to deposit the additional amount by the deadline or if an outstanding debt occurs in your account the stock broker may liquidate a part of or the whole position or substitute securities. In this case you will be liable for any losses incurred due to such close-outs.
Under certain market conditions an investor may find it difficult or impossible to execute transactions. For example this situation can occur due to factors such as illiquidity i.e. when there are insufficient bids or offers or suspension of trading due to price limit or circuit breakers etc.
In order to maintain market stability the following steps may be adopted: changes in the margin rate increases in the cash margin rate or others. These new measures may also be applied to the existing open interests. In such conditions you will be required to put up additional margins or reduce your positions.
You must ask your broker to provide the full details of derivatives contracts you plan to trade i.e. the contract specifications and the associated obligations.
2.2 Currency specific risks:
The profit or loss in transactions in foreign currency denominated contracts whether they are traded in your own or another jurisdiction will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currency.
Under certain market conditions you may find it difficult or impossible to liquidate a position. This can occur for example when a currency is deregulated or fixed trading bands are widened.
Currency prices are highly volatile. Price movements for currencies are influenced by among other things: changing supply-demand relationships; trade fiscal monetary exchange control programs and policies of governments; foreign political and economic events and policies; changes in national and international interest rates and inflation; currency devaluation; and sentiment of the market place. None of these factors can be controlled by any individual advisor and no assurance can be given that an advisor’s advice will result in profitable trades for a participating customer or that a customer will not incur losses from such events.
2.3 Risk of Option holders:
An option holder runs the risk of losing the entire amount paid for the option in a relatively short period of time. This risk reflects the nature of an option as a wasting asset which becomes worthless when it expires. An option holder who neither sells his option in the secondary market nor exercises it prior to its expiration will necessarily lose his entire investment in the option. If the price of the underlying does not change in the anticipated direction before the option expires to an extent sufficient to cover the cost of the option the investor may lose all or a significant part of his investment in the option.
The Exchanges may impose exercise restrictions and have absolute authority to restrict the exercise of options at certain times in specified circumstances.
2.4 Risks of Option Writers:
If the price movement of the underlying is not in the anticipated direction the option writer runs the risks of losing substantial amount.
The risk of being an option writer may be reduced by the purchase of other options on the same underlying interest and thereby assuming a spread position or by acquiring other types of hedging positions in the options markets or other markets. However even where the writer has assumed a spread or other hedging position the risks may still be significant. A spread position is not necessarily less risky than a simple ‘long’ or ‘short’ position.
Transactions that involve buying and writing multiple options in combination or buying or writing options in combination with buying or selling short the underlying interests present additional risks to investors. Combination transactions such as option spreads are more complex than buying or writing a single option. And it should be further noted that as in any area of investing a complexity not well understood is in itself a risk factor. While this is not to suggest that combination strategies should not be considered it is advisable as is the case with all investments in options to consult with someone who is experienced and knowledgeable with respect to the risks and potential rewards of combination transactions under various market circumstances.
TRADING THROUGH WIRELESS TECHNOLOGY/ SMART ORDER ROUTING OR ANY OTHER TECHNOLOGY:
Any additional provisions defining the features risks responsibilities obligations and liabilities associated with securities trading through wireless technology/smart order routing or any other technology should be brought to the notice of the client by the stock broker.
GENERAL
4.1 The term ‘constituent’ shall mean and include a client a customer or an investor who deals with a stock broker for the purpose of acquiring and/or selling of securities/ derivatives contracts through the mechanism provided by the Exchanges.
4.2 The term ‘stock broker’ shall mean and include a stock broker a broker or a stock broker who has been admitted as such by the Exchanges and who holds a registration certificate from SEBI.
(iii) GUIDANCE NOTE – DO’s AND DON’T’S FOR TRADING ON THE EXCHANGE(S) FOR INVESTORS
BEFORE YOU BEGIN TO TRADE
1. Ensure that you deal with and through only SEBI registered intermediaries. You may check their SEBI registration certificate number from the list available on the Stock exchanges www.exchange.com and SEBI website www.sebi.gov.in
2. Ensure that you fill the KYC form completely and strike off the blank fields in the KYC form.
3. Ensure that you have read all the mandatory documents viz. Rights and Obligations Risk Disclosure Document Policy and Procedure document of the stock broker.
4. Ensure to read understand and then sign the voluntary clauses if any agreed between you and the stock broker. Note that the clauses as agreed between you and the stock broker cannot be changed without your consent.
5. Get a clear idea about all brokerage commissions fees and other charges levied by the broker on you for trading and the relevant provisions/ guidelines specified by SEBI/Stock exchanges.
6. Obtain a copy of all the documents executed by you from the stock broker free of charge.
7. In case you wish to execute Power of Attorney (POA) in favour of the Stock broker authorizing it to operate your bank and demat account please refer to the guidelines issued by SEBI/Exchanges in this regard.
TRANSACTIONS AND SETTLEMENTS
8. The stock broker may issue electronic contract notes (ECN) if specifically authorized by you in writing. You should provide your email id to the stock broker for the same. Don’t opt for ECN if you are not familiar with computers.
9. Don’t share your internet trading account’s password with anyone.
10. Don’t make any payment in cash to the stock broker.
11. Make the payments by account payee cheque in favour of the stock broker. Don’t issue cheques in the name of sub-broker. Ensure that you have a documentary proof of your payment/deposit of securities with the stock broker stating date scrip quantity towards which bank/ demat account such money or securities deposited and from which bank/ demat account.
12. Note that facility of Trade Verification is available on stock exchanges’ websites where details of trade as mentioned in the contract note may be verified. Where trade details on the website do not tally with the details mentioned in the contract note immediately get in touch with the Investors Grievance Cell of the relevant Stock exchange.
13. In case you have given specific authorization for maintaining running account payout of funds or delivery of securities (as the case may be) may not be made to you within one working day from the receipt of payout from the Exchange. Thus the stock broker shall maintain running account for you subject to the following conditions:
a). Such authorization from you shall be dated signed by you only and contains the clause that you may revoke the same at any time.
b). The actual settlement of funds and securities shall be done by the stock broker at least once in a calendar quarter or month depending on your preference. While settling the account the stock broker shall send to you a ‘statement of accounts’ containing an extract from the client ledger for funds and an extract from the register of securities displaying all the receipts/deliveries of funds and securities. The statement shall also explain the retention of funds and securities and the details of the pledged shares if any.
On the date of settlement the stock broker may retain the requisite securities/funds towards outstanding obligations and may also retain the funds expected to be required to meet derivatives margin obligations for next 5 trading days calculated in the manner specified by the exchanges. In respect of cash market transactions the stock broker may retain entire payin obligation of funds and securities due from clients as on date of settlement and for next day’s business he may retain funds/securities/margin to the extent of value of transactions executed on the day of such settlement in the cash market.
c) You need to bring any dispute arising from the statement of account or settlement so made to the notice of the stock broker in writing preferably within 7 (seven) working days from the date of receipt of funds/securities or statement as the case may be. In case of dispute refer the matter in writing to the Investors Grievance Cell of the relevant Stock exchanges without delay.
14. In case you have not opted for maintaining running account and pay-out of funds/securities is not received on the next working day of the receipt of payout from the exchanges please refer the matter to the stock broker. In case there is dispute ensure that you lodge a complaint in writing immediately with the Investors Grievance Cell of the relevant Stock exchange.
15. Please register your mobile number and email id with the stock broker to receive trade confirmation alerts/ details of the transactions through SMS or email by the end of the trading day from the stock exchanges.
16. Ensure that the payment of unpaid securities is made within the prescribed time lines to avoid compulsory liquidation.
IN CASE OF TERMINATION OF TRADING MEMBERSHIP
17. In case a stock broker surrenders his membership is expelled from membership or declared a defaulter; Stock exchanges gives a public notice inviting claims relating to only the “transactions executed on the trading system” of Stock exchange from the investors. Ensure that you lodge a claim with the relevant Stock exchanges within the stipulated period and with the supporting documents.
18. Familiarize yourself with the protection accorded to the money and/or securities you may deposit with your stock broker particularly in the event of a default or the stock broker’s insolvency or bankruptcy and the extent to which you may recover such money and/or securities may be governed by the Bye-laws and Regulations of the relevant Stock exchange where the trade was executed and the scheme of the Investors’ Protection Fund in force from time to time.
DISPUTES/ COMPLAINTS
19. Please note that the details of the arbitration proceedings penal action against the brokers and investor complaints against the stock brokers are displayed on the website of the relevant Stock exchange.
20. In case your issue/problem/grievance is not being sorted out by concerned stock broker/sub-broker then you may take up the matter with the concerned Stock exchange. If you are not satisfied with the resolution of your complaint then you can escalate the matter to SEBI.
21. Note that all the stock broker/sub-brokers have been mandated by SEBI to designate an e-mail ID of the grievance redressal division/compliance officer exclusively for the purpose of registering complaints.
(iv) POLICIES AND PROCEDURES APPLICABLE TO CLIENTS OF AARITYA BROKING PRIVATE LIMITED
1. REFUSAL OF ORDERS FOR PENNY STOCKS
Aaritya Broking Private Limited (“AARITYA”) normally offers trading facility to its clients in all the compulsorily dematerialised stocks which are listed on the Stock Exchanges. However AARITYA discourages/ restricts trading in penny stocks by the clients as they are susceptible to manipulation and risky for investors and in turn to AARITYA.
“Penny Stocks” for this purpose shall include:
a. Stocks appearing in the list of illiquid securities issued by the Exchanges from time to time.
b. Stocks which are highly illiquid and have a low market capitalization and ‘Z’Group Securities.
c. Any securities as may be restricted for trading by Exchanges.
d. Stocks categorized by exchange in ASM GSM Unsolicited SMS
e. Any other securities as may be restricted for trading by AARITYA based on its internal evaluation.
As a part of Risk Management System AARITYA restricts clients to buy/ sell in penny stocks only on the basis of 100% upfront margin and on delivery basis. Also AARITYA have/may have in place further restrictions in terms of quantity/ value in each/all penny stocks together as notified by its extant circulars. Further in case of Internet Trading clients AARITYA may at any time at its sole discretion block/ restrict the client’s online trading terminal to prevent the client from placing orders in such penny stocks through the Online Trading Platform of AARITYA. Further in case the client is able to place an order for penny stocks which are restricted by AARITYA through Online Trading Platform or otherwise AARITYA may not accept such order.
AARITYA shall not be held liable for restricting/ prohibiting trade in penny stocks at any time. Further AARITYA shall not be held liable or responsible in any manner whatsoever for any refusal/cancellation of orders for trading in penny stocks/other securities and the Client shall indemnify AARITYA in respect of any loss caused to AARITYA by virtue of the Client trading in penny stocks.
2. SETTING UP OF CLIENT’S EXPOSURE LIMITS
As part of risk management Aaritya Broking Private Limited (“AARITYA”) accepts margin from clients in form of funds pledged securities and other forms prescribed by Regulator from time to time.
Margin available for trading margin = Adjusted Ledger Balance + After Haircut Value of pledge stocks – Required exchange margin on unsettled sell transactions/Unsettled derivative credit bills.
The trading ledger balance is adjusted to factor unclear cheque 1.5 times value of undelivered stocks and debit balance in broker margin funding account from the clients trading ledger balance.
AARITYA shall set client's exposure limits depending on the type of securities provided as Margin/ available funds in the client's ledger plus Fixed Deposits/ Bank Guarantees provided by the client and the client profile/ financial status. Exposure limits are also set based on categories of stocks/ position (derivatives) client can trade. Securities that are acceptable as margin and their categorization may be changed by AARITYA from time to time at its sole discretion. Further client categorization may also be changed based on various factors including trading pattern of clients profile/ residential status/ financial status of client.
AARITYA from time to time shall apply such haircuts as may be decided by AARITYA on the approved securities against which the Exposure limits are given to the client. AARITYA may from time to time change the applicable hair cut or apply a haircut higher than that specified by the Regulators/Exchanges as part of its Risk Management System.
Subject to the client's exposure limits client may trade in securities and/ or take positions in the futures and options segment. Client shall abide by the exposure limits if any set by AARITYA or by the Exchange or Clearing Corporation or SEBI from time to time. Limits/ Exposure provided shall vary based on the intraday/ delivery/ carry forward positions made by the client.
The exposure limits set by AARITYA does not by itself create any right for the Client and are liable to be withdrawn at any time without notice and the client shall bear the loss on account of withdrawal of such limits. The client agrees to compensate AARITYA in the event of AARITYA suffering any loss harm or injury on account of exposure given and/or withdrawn. In case of sale of Securities such sale may at the discretion of AARITYA be provided only to the extent of the availability of securities in the account of the client (DP free Stock DP lien/ hold marked securities beneficiary and collateral stock). Further the credit received against sale may be used for exposure as may be decided by AARITYA from time to time.
In case of derivatives Clients shall be allowed to trade only up to the applicable client-wise position limits set by the Exchanges/Regulators from time to time. AARITYA may from time to time demand additional margin from the client in the form of funds or securities if there is a requirement for the same and the client shall be required to provide the same.
A. Capital Market Segment
It is mandatorily to pay VaRmargins Extreme loss Margin (ELM) and other applicable margins (ranging between 20% - 100%) on an upfront basis i.e. in advance of trade. Other margins such as Mark-to-market margin (MTM) delivery margin special/additional Margin or such other margins as may be prescribed from time to time shall be collected within timeslines as prescribed by SEBI/Exchanges
Intraday trading Cover and bracket order (in Equity segment of NSE BSE) is provided on selected scrips to clients for buying and short selling subject to upfront margin between 20% to 100% (subject to changes). All open positions of the client marked as intraday trades are compulsorily squared off on best effort basis before end of the day irrespective of profit- or loss-making positions.
B. Derivative segment
It is mandatory to pay SPAN/ Initial margin & Extreme loss margin (ELM) on an upfront basis i.e. in advance of trade. Delivery Margin (for F&O) and margin on consolidated crystallized obligation (for F&O and Currency) shall be payable by T+1 day.
Intraday trading is provided on selected derivative contracts with upfront margin requirement of 100% of SPAN + ELM + other applicable margin (subject to changes). All open positions of the client marked as intraday trades are compulsorily squared off on best effort basis before end of the day irrespective of profit- or loss-making positions.
APPLICABLE BROKERAGE RATES
The Schedule of Brokerage and other charges leviable by AARITYA on the clients are provide under the heading “Schedule of Brokerage and Other Charges” in this Form. Within the mentioned scale the brokerage and other charges as agreed by the client is indicated and duly signed by the client in that section. If there is any upward revision of brokerage the same will be informed to the client with 15 days prior notice. However all the brokerage and other charges are subject to the maximum limits as prescribed by SEBI/ Exchanges/ Government and other Regulatory authorities from time to time.
IMPOSITION OF PENALTY OR DELAYED PAYMENT CHARGES
The clients are required to settle the pay-in/ provide margin within the time limits provided by Exchanges/ SEBI/ AARITYA risk management system. In case the client fails to provide the same within the prescribed time delayed payment charges up to 0.045% per day simple interest compounded monthly shall be levied on the client's account on any delayed payments towards trading either in the cash or derivatives segments or on account of any other reason beyond the due date of payment as may be prescribed by AARITYA. Such delayed payment charges shall be directly debited to the account of the Client at the end of every month. This is only a penal measure and brings in discipline in the clients to clear the dues in time as AARITYA had to clear its obligations to the Exchange as per the time limits set by the Exchanges. AARITYA reserves the right of imposition of delayed payment charges on the client account and the client shall be liable for payment of such charges at such rate as may be prescribed by AARITYA from time to time.
MARK TO MARKET LOSS
The mark to market loss is monitored against the net-worth / margins available in the trading account. The Client's net-worth/ margins available is total of adjusted ledger balance + Holding value of pledge securities + SPAN + Exposure margin requirement on derivative segment + Receipt of funds during the day – payment of funds during the day. AARITYA shall not be hold responsible for any delay losses brokerage other charges margin shortfall penalties etc.
The client is notified once mark to market loss reaches to 50% of the client net-worth available in trading account.
All open positions of all derivative segment and intraday products are liquidated once mark to market loss reaches to 80% of the client net-worth available in trading account.
SHORTAGES IN OBLIGATION ARISING OUT OF INTERNAL NETTING OF TRADES FOR EQUITIES OR PHYSICAL SETTLEMENT OF EQUITY DERIVATIVE CONTRACT
Shortages arising out of internal netting of trades shall be strictly handled as per SEBI/Exchange prescribed Self Auction mechanism. Any charges levied by Exchanges/SEBI shall be recovered from clients
CONDITIONS UNDER WHICH CLIENT MAY NOT BE ALLOWED TO TAKE FURTHER POSITIONS OR BROKER MAY CLOSE EXISTING POSITIONS OF CLIENT
In addition to the conditions as provided under the policy of right to sell securities and close out client’s open position as detailed in point 5 above AARITYA shall have the right to refuse to execute trades/ allow the client to take further positions and/ or close out the existing positions of client under following circumstances:
As a result of any Regulatory directive/ restriction;
Non-receipt of funds/ securities and/ or bouncing of cheque received from the client towards the obligations/margin/ ledger balances;
Due to technical reasons;
securities breaching the limits specified by the Exchanges/ regulators from time to time
In case of failure to meet margin including mark to market margins by the client;
In case securities to be transacted by client are not in dematerialized form
Any other conditions as may be specified by AARITYA from time to time in view of market conditions regulatory requirements internal policies etc and risk management system;
Due to any force majeure event beyond the control of AARITYA
AARITYA shall not be responsible for any loss incurred and the client shall indemnify AARITYA in this regard.
TEMPORARILY SUSPENDING OR CLOSING OF CLIENT’S ACCOUNT AT THE CLIENT’S REQUEST
AARITYA may suspend or close the trading account of the client pursuant to SEBI or any other Regulatory directive for such period as may be prescribed by the respective Regulator. AARITYA may further at its sole discretion and with/without information to the CLIENT prohibit or restrict or block the CLIENT’s access to the use of the web site or related services and the CLIENT’s ability to trade due to market conditions and other internal policies including policy with respect to prevention of money laundering.
Client can initiate temporary suspension/ closure of its account at any time by giving a request to AARITYA in writing 15 days in advance. However such suspension/ closure will be effected subject to clearance of all dues and settlement obligations by the client.
Trades in the account of the client during the period of such temporary suspension shall not be permitted.
Notwithstanding any such suspension/ closure all rights liabilities and obligations of the parties arising out of or in respect of transactions entered into prior to such closure/ suspension shall continue to subsist and binding on the client.
In case the account has been temporarily suspended at the request of the client the account shall be reactivated only on submission of a written request for reactivation by the client.
POLICY OF VOLUNTARY FREEZE OF TRADING ACCOUNT BY CLIENTS
Clients can voluntarily Freeze their AARITYA Trading Account (via contacting Customer Support or dropping mail to stoptrade@aaritya.com from registered e-mail id in case of any they wish to stop the trades in their account. Once an account is freezed the users will not be able to login to online platforms. To gain access to the online trading account again clients can again use the above-mentioned mode of communication to unfreeze the trading account.
Below points to be noted upon request received for Account Freezing:
Account freeze request will be validated and then the account would be freezed.
Intimation of the account being freezed will be sent to the client.
The account will be inaccessible till the time it is unfreezed through a request from your end. This will not stop the RMS actions of liquidating positions or shares wherever required as per the Risk Management policy.
All Pending Orders will be cancelled.
Open Positions will not be closed.
Client will receive the intimation of Open Positions over registered mail id.
DEREGISTRATION OF A CLIENT
Deregistration of the client/ Termination shall be at the sole discretion of AARITYA. AARITYA may deregister the client if the client breaches the terms and conditions of the member-client agreement or provides any false information or declarations. Further AARITYA may deregister the client if the client is suspected to be involved in any activities in violation of applicable Rules and Regulations. Further the client may be deregistered due to any Regulatory directive market conditions and other internal policies of AARITYA including policy with respect to prevention of money laundering. Such deregistration/termination shall not effect the rights and liabilities of the parties in respect of the transactions executed before the date of such deregistration/ termination.
TREATMENT OF INACTIVE ACCOUNTS
Pursuant to SEBI and Exchange directive Trading and/or demat account will be considered as 'Inactive account' if the client has not operated the same for continuous period of one year. Such inactive account will be blocked for further transactions by the client. The client will have to submit following documents / confirmation for re-activation of such blocked account:
Call the customer care centre identifying himself (through validation questions) and requesting for activation of account for placing orders / transacting in the account; OR
Client can give the duly signed request in writing at any Branch offices of Aaritya Broking Private Limited; OR
By placing the request for re-activation of account through the Internet Trading portal.
During the blocked period if there is any debit / dues to Aaritya Broking Private Limited in client's account AARITYA shall have the authority to liquidate the client's position to the required extent during the blocked period.
During the blocked period if any corporate actions or pay-outs are due for return to the client the same will be affected / returned by AARITYA to the client's account.
PAYMENT
12.1 Time of Payment
12.1.1 The Client shall make all remittances to Stock Broker (i.e. payment for all purchase transactions plus taxes brokerage handling charges and depository related fees and transaction fees of Stock Broker) by the value date for each transaction. The value date for all purchases will be the pay-in day less two days where the pay-in day is specified by the Exchange Clearing House for the relevant settlement period. Provided that subject to Clause 6.1.4 a notional debit may be made with respect to the Limit on the last day of the Settlement Cycle notwithstanding that actual payment is due on a later date and such notional debit shall be reversed on receipt of payment.
12.1.2 The Client will also have to make a margin payment for shares purchased and sold either for square-off or delivery or on derivative contracts. The amount will be as charged by the relevant Exchange. However in case the Exchange charges a margin amount over and above the normal margins Stock Broker can make a margin call to the Client who will need to have to pay the relevant margin as charged by the Exchange.
12.1.3 Stock Broker shall remit funds to the Client (i.e. payment for all sale transactions less taxes brokerage handling charges and depository related fees and transaction fees of Stock Broker) less any amounts deducted for shortages by the value date. The value date for all sales will be pay-out day plus two days where the pay-out day is specified by the Exchange Clearing House for the relevant settlement period.
12.1.4 In the event of the Client having made both sales and purchases during a Settlement Cycle on the same Stock Exchange the amount due from and to the Client shall be netted off and only the difference shall be payable by or to the Client. A notional debit or credit as the case may be may be made to the Limit at the end of day until the actual payment is made.
12.2 Mode of Payment
No cash payment will be received from/ made to the client as per the extract SEBI/ Exchange/ Income Tax/ PMLA Regulation Guidelines Circulars etc. Accordingly AARITYA will not be responsible for any claim of receipt/ payment in cash by client from/ to AARITYA. In the case of a purchase transaction the Client shall remit funds within the time period provided in subclause 6.1.1 above to Stock Broker in any of the following ways:
12.2.1 Acceptable credit or debit card provided Stock Broker has agreed to receipt of payment in this manner or
12.2.2 Authorized electronic transfer of funds from Client’s Bank Account to Stock Broker’s bank account in the same Designated Bank; or
12.2.3 Demand draft in favour of “Aaritya Broking Private limited – (Client’s Login id) or account payee crossed cheques drawn on designated bank or any other bank with which the Client maintains a regular account proof of which is provided at the time of payment. In the case of sub-clauses (1) and
credit will be given to the Client immediately on authentication of payment authorization however Client has to intimate Stock Broker immediately after making payment through option as mentioned in subclauses (1) and (2). In the case of (3) credit will be given only on receipt of clear funds.
12.2.4 Payment referred to in sub-clauses (1) (2) & (3) shall be accepted only from Client’s account.
12.2.5 Payment shall be made by the Client only as referred to in sub-clauses (1) (2) & (3) above. Stock Broker shall not accept/ acknowledge/ give credit for any payment made in cash.
12.2.6 The client agrees to pay Rs.500/- to Stockbroker in case if the cheque deposited by client is bounced/ uncleared/rejected due to any reason.
The same shall be deducted from the client’ s ledger account held with the Stockbroker.
12.3 In the case of a sale transaction Stock Broker shall remit funds to the Client within the time period provided in subclause 6.1.3 above provided the Client has delivered the securities sold to Stock Broker within the time prescribed in clause 8.1.1 in any of the following ways as may be requested by the Client:
12.3.1 Electronic transfer of funds into the Bank Account of the Client opened with the Designated Bank.
12.3.2 Electronic transfer of funds into any other bank account of the Client as may be specified by the Client and accepted by Stock Broker; or
12.3.3 Account payee cheque.
12.3.4 All payments shall be made only in the name of the client.
12.4 Please note that the mode of payment should be only by way of account payee crossed cheques or Demand draft in favour of “Aaritya Broking Private limited – (Client’s Login id). No cash receipts payments will be entertained for any transactions made by the client. AARITYA will not be responsible for any kind of claims raised by the clients regarding payment made in cash. Mobile number is compulsory for opening of Demat/ Trading account with AARITYA.
12.5 Interface with a payment gateway will be offered to the Client at the portal itself.
12.6 DEFAULT IN PAYMENT
The Client agrees that Stock Broker may set off his/ her credit balances on NSE and BSE hereinafter referred to as the “Exchanges” against the debit balances in one or more accounts of the Client in relation to the said Exchanges and segments of the Exchanges.
Without prejudice to the Stock Broker’s other rights (including the right to refer a matter to arbitration) Stock Broker shall be entitled to liquidate/ close out all or any of the Client’s positions in cash segment or derivative segment on any Exchange for nonpayment of margins or other amounts outstanding debts etc. and adjust the proceeds of such liquidation/ close out if any against the Client’s liabilities/ obligations. Any and all losses and financial charges on account of such liquidation/ closing-out shall be charged to and borne by the Client.
On a default by the Client to remit any monies payable to Stock Broker Stock Broker shall be entitled to appropriate the monies maintained by the Client in the Minimum Margin Deposit towards its dues. The Minimum Margin Deposit with Stock Broker shall be subject to a lien for the discharge of any and all indebtedness or any other obligation that the Client may have to Stock Broker. The Online broking Services shall be suspended to the Client until such time as the Client replenishes funds adequate to maintain the Minimum Margin Deposit at the stipulated level.
Not with standing anything contained in these present any amounts which are overdue from the Client towards trading either in the cash or derivative segments or on account of any other reason the Client will be charged delayed payment charges at the rate of 2% per month or such other rate as may be determined by the Stock Broker.
The Client hereby authorises the Stock Broker to directly debit the same to the account of the Client.
12.7 In the event the client makes the specific request to the stockbroker for the physical documents instead of electronic/digitally signed documents including contract notes/ statement of accounts etc and subject to the stockbroker being in a position to do so; the client agrees to pay all such amounts that the stockbroker may charge to cover the operational cost that the stockbroker incurs in preparing and delivering the said communications documents reports and alerts.
12.8 The Client hereby agrees and understands that in case of any noncompliance and/ or default by the Client such as cheque bouncing trade change F&O short margin UCC violation price rigging or for any other matters as may be decided by Stock broker from time to time without prejudice to the Stock Broker’s other rights Stock Broker may levy charges/ penalty(ies) on the Client and debit such charges/ penalty in the Client’s account.
12.9 The Client authorizes the Stock Broker to use his discretion to buy sell or close out any part or all of the contracts held in the Clients account with the Stock Broker for the protection of the Stock Broker in case of any default by the Client. The Client agrees to reimburse any or all such incidental expenses incurred by the Stock Broker.