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Prevention of Money Laundering Policy

  1. Appointment of Principal Officer
    1. Sufficiently senior person of the company is to be appointed as “Principal Officer” of the company under the Prevention of Money Laundering Act. 2002 and the same is to be intimated to Director, FIU-IND, Financial Intelligence Unit-India, 6th Floor, Hotel Samrat, Chanakyapuri, New Delhi-110 021.
  2. Customer due Diligence/KYC Standards
    1. New customer acceptance procedures:
      1. On acceptance of new customer the documents relating to the identity and address of the customer are to be obtained as per the SEBI regulations and are to be verified through “in person verification”. The phone number of the customer is also to be verified. Reference of KRA agency may also be obtained since in some cases we may rely on KRA Accounts.
      2. The sufficient information is to be obtained for identify of the person who is beneficially owned or control the trading account where the securities acquired or maintained in the account are beneficially owned by the person other than the customer.
      3. The PAN detail obtained from the customer is to be compared with the original and verified from Income tax website/utility provided by NSDL for verification of PAN details. Self attested copies of the documents should be obtained from the clients.
      4. While accepting the documents from the customer relating to KYC norms the same are to be verified with the original documents. ROC search report in case of doubt and registered office/corporate office address verification.
      5. The customer shall be asked for additional information to satisfy his/her/its genuineness and financial standing.
      6. To check whether the customer has any criminal background, whether he/she has been at any point of time been associated in any civil or criminal proceedings anywhere.
      7. To check whether at any point of time the customer has been banned from trading in the stock market or with any depository.
      8. The introduction of customer is to be made by members’ employees.
      9. Risk based KYC procedures should be adopted for all new customers.
      10. Exchanges Review and implement all changes being informed by various statutory authorities and from time to time.
    2. For existing customer:
      1. Review of KYC details of all the existing active clients in context to the PMLA 2002 requirements.
      2. Classification of customers into high, medium or low risk categories based on KYC details, trading activity etc for close monitoring of high risk categories customers.
      3. Obtain annual financial statements from the customers those in high risk categories.
      4. In case of non individual customers additional information about the directors, partners, dominant promoters, major shareholders to be obtained.
    3. Risk based approach:
      1. Classify both the new and existing customers into high, medium or low risk category depending on parameters such as the customer’s background, type of business relationship, transactions etc. The customer due diligence process is to be enhanced for high risk categories of customers.
    4. Customers of special category
      1. The following customers are included in the customers of special category:
        1. Non resident clients
        2. High net worth clients,
        3. Trust, Charities, NGOs and organizations receiving donations
        4. Companies having close family shareholdings or beneficial ownership
        5. Politically exposed persons (PEP) of foreign origin
        6. Current / Former Head of State, Current or Former Senior High profile politicians and connected persons (immediate family, Close advisors and companies in which such individuals have interest or significant influence)
        7. Companies offering foreign exchange offerings.
        8. Clients in high risk countries (where existence / effectiveness of money laundering controls is suspect, where there is unusual banking secrecy, Countries active in narcotics production, Countries where corruption (as per Transparency International Corruption Perception Index) is highly prevalent, Countries against which government sanctions are applied, Countries reputed to be any of the following – Havens / sponsors of international terrorism, offshore financial centers, tax havens, countries where fraud is highly prevalent.
        9. Non face to face clients
        10. Clients with dubious reputation as per public information available.
  3. Upload of KYC details in the KYC Registration Agency (KRA) and In-Person Verification (IPV)
    1. Implementation of SEBI direction to upload the KYC of all the clients existing and new clients as per time schedule given in SEBI circular no. MIRSD/ Cir-5 /2012 dated 13th April 2012 and further circulars from time to time. In-Person verification of all the clients must be carried out as per direction given in SEBI circular no. MIRSD/Cir – 26/2011 dated 23rd December, 2011. Proper verification/authentication of the documents submitted by the clients should be carried out before uploading the data. Scanned images of the KYC documents to the KRA and physical should be retained. SEBI circular in this regard should be implemented from time to time in true spirit. Policy and procedure should be reviewed relating KYC and IPV from time to time. The physical KYC documents or authenticated copies thereof should be provided to KRA in case desired by KRA.
  4. Monitoring of transactions for detecting suspicious transactions:
    1. Under Anti Money Laundering framework ongoing monitoring of accounts are to be made. Through monitoring the accounts of the customers having abnormal transactions are to be identified. The transactions will be allowed based on the financial position of the client as per declaration given by the client at the time of opening the account. The necessary reports / alerts system should be implemented, based on the customer’s profile, nature of business, trading pattern of customer’s, for identifying and detecting such transactions. These reports / alerts are to be analyzed to establish whether the transactions are suspicious or not.
    2. A list of circumstances which may be in the nature of suspicious transactions is given below:
      1. Clients whose identity verification seems difficult or clients appear not being cooperative
      2. Substantial increase in activity without any apparent cause
      3. Large number of accounts having common parameters such as common partners / directors / promoters / address / email addresses / telephone numbers / introducers or authorized signatories;
      4. Transactions with no apparent economic or business rationale
      5. Sudden activity in dormant accounts;
      6. Source of funds are doubtful or inconsistency in payment pattern;
      7. Unusual and large cash deposits made by an individual or business;
      8. Transfer of investment proceeds to apparently unrelated third parties;
      9. Multiple transactions of value just below the threshold limit specified in PMLA so as to avoid possible reporting;
      10. Unusual transactions by Customers of Special Categories;
      11. Clients in high-risk jurisdictions or clients introduced by banks or affiliates or other clients based in high risk jurisdictions;
      12. Clients transferring large sums of money to or from overseas locations with instructions for payment in cash;
      13. Purchases made on own account transferred to a third party through off market transactions through DP Accounts;
      14. Suspicious off market transactions;
      15. Large deals at prices away from the market.
      16. Accounts used as ‘pass through’. Where no transfer of ownership of securities or trading is occurring in the account and the account is being used only for funds transfers/layering purposes.
      17. Trading activity in accounts of high risk clients based on their profile, business pattern and industry segment.
  5. Reporting of suspicious transactions
    1. On analyses of the reports / alerts generated and if it seems to be a suspicious transaction then same is to be reported to the FIU in Suspicious Transaction Report (STR) within 7 days of arriving at a conclusion that the transaction is of suspicious nature.
    2. The STR is to be submitted by the Principal Officer of the company with the FIU. The STR may be dispatched by speed post / registered post at the address mentioned at serial no. 1.
    3. The STR files are to be maintained in confidential manner.
    4. The records of the suspicious transactions have to maintained and preserved for a period of ten years from the date of cessation of the transactions.
  6. Ongoing training of employees
    1. The Principal Officer should sensitize the employees of the requirements under PMLA and the procedures. The Principal Officer is also required to ensure that all the operating and management staff fully understands their responsibilities under PMLA for strict adherence to customer due diligence requirements from establishment of new accounts to transaction monitoring and reporting suspicious transactions to the FIU.
    2. The Management is to organize suitable training program for new staff, front-line staff, supervisory staff, controllers and product planning personnel.
  7. Audit/Testing of Anti Money Laundering Program
    1. The Anti Money Laundering program should be subject to periodic audit specifically with regard to testing its adequacy to meet the compliance requirements.
    2. The audit/testing may be conducted by experienced personnel not involved in framing or implementing the AML program.
    3. The report of such an audit/testing should be placed before the senior management for making suitable modifications / improvements in the AML program.
 

Policy for Unauthentic News Circulation

The purpose of this policy is to Protect Investors by avoiding/restricting the unauthenticated news circulation related to various scrips by the Company’s Employees/Temporary Staff or other dealing person and by company Infrastructure without adequate caution.

It has been observed that market news circulated through blogs/chat forums /email by employees without adequate caution can do considerable damage to the normal functioning and behavior of the market and distort the price discovery mechanisms.

As per code of conduct for Stock Broker in SEBI (Stock Brokers and Sub ‐ brokers) Regulations, 1992 and SEBI circular Cir/ISD/1/2011 dated March 23, 2011, all SEBI registered market intermediaries are required to have proper internal code of conduct to govern the conduct of its Employees. In view of same the company implements code of conduct for communicating through various modes of communication. Company Directors/ Officers / Employees/ Temporary Staff Voluntary Workers are prohibited from:

1. Circulation of unauthenticated news related to various Scrips in blogs/chat forums/e ‐ mail etc.

2. Encouraging or circulating rumors or unverified information obtained from client, industry, any trade or any other sources without verification.

3. Either forwarding any market related news received in their official mail/personal mail/blog or in any other manner except after the same has been seen and approved by the Compliance Officer.

Therefore all the employees of the organization including Directors/ Officers / Employees/ Temporary Staff /Voluntary Workers should follow internal code of conduct and controls of the company. Employees/Temporary staff/ voluntary workers etc. working in the office will not encourage or circulate and therefore restricted to circulate rumors or unverified information obtained from the client, industry and trade or any other sources without verification.

Access Control : There is no Access to chat forums/ Messenger sites to all the staff. Only senior officials including Directors, Compliance Officer and Manager have the access to the said. All the logs of such sites shall be treated as records and are maintained by the compliance officer.

Any information or market related news received by staff in official mail or their personal mail should be forwarded only after the same has been seen and approved by the Compliance Officer of the company.

If an employee fails to do so, he/she shall be deemed to have violated the various provisions contained in SEBI Act/Rules/Regulations etc. and shall be liable for disciplinary action.

This code can be modified/amended/altered as required from time to time in compliance of the relevant provisions/regulations in this regard.

 

Error Account Policy

As a matter of principle, Abhipra Capital Limited (ACL) does not allow client code modification of executed trades in order to maintain an orderly trade data.

However, with the expansion of business and large retail clientele trading, the ACL is aware that there is possibility of a trade being executed erroneously under wrong UCC due to genuine punching mistake by the terminal user. For this reason, ACL is adopting a policy for client code modification / error account trade as follows:

  1. Client code modification requests will be strictly accepted only to rectify genuine error in entry of client code at the time of placing /modifying the related order; consequently dealers are advised to take utmost care/precaution while execution of client trades.
  2. As per SEBI circular dated July 5, 2011 on client code modifications, penalty will be levied on all client code modifications w.e.f. August 1, 2011 (including genuine errors).
  3. ACL will allow Modifications in the client Codes of Non - Institutional clients only for the following objective Criteria provided there is no consistent pattern in such modifications:
    1. Error due to communication and / or punching or typing such that the original client code / name and the modified client code / name are similar to each other.
    2. Modification within relatives (Relative for this purpose would mean ' Relative' as defined under sec. 6 the Companies Act, 1956).
  4. For easy identification of “ERROR ACCOUNT”, ACL have registered a fresh client code as “ERROR” in Back Office & same has been uploaded in the UCC database of the Exchange.
  5. Any transfer of trade (institutional or non - institutional) to “ERROR” of ACL would not be treated as modification of client code and would not attract any amount of penalty, provided the trades in “ERROR” are subsequently liquidated in the market and not shifted to some other client code. However operational costs as applicable & Profit / Loss from the transaction will be transferred to the concerned Dealer / Associate.
  6. Client Code Modification requests through “ERROR ACCOUNT” will be accepted only till 3:30 pm.
  7. The ACL shall conduct a special inspection of the concerned Dealer, if modification exceeds 1% of the value of trades executed during a month and take appropriate disciplinary action, if any deficiency is observed.

 

   

Internal Control Policy

POLICY OF INTERNAL CONTROL

At Abhipra, we have all kinds of clients placing orders in person, through telephone, or via themselves through online systems.

In cases where the person is present in person at the branches for transacting in the stock markets, first get verified himself and thereafter operators execute the orders for the person and give the confirmation immediately as soon as received from the exchange.

In cases, phones are received from the investor for transacting in the stock market orders are received on the phone lines placed with the operators at head office are kept on the recording system, and in branches we are in the process of implementing the same. All investors are first required to identify themselves and thereafter only orders for the clients are executed. Confirmation is thereafter made to the investor on the phone itself.

In cases, the investor is placing the order through online system, he receives the confirmation immediately on the system itself.

Apart from this after the closing of the trading session, all trades executed are further confirmed firstly through the mobile phones via sms thereafter at the branch level confirmation is further made via telephone. At the end of the day all bills and statements are forwarded to the investors through emails.

All transactions executed on the system are as per the instruction of the investors received from time to time. No discretionary rights are executed by us in placing the orders on behalf of the investors.

A. Sending Contract Note, Daily Margin Statement, Quarterly SOA

As stated above we have tried to make the systems as transparent as possible. We have designed the system to provide the information to the investors from every aspect. All the statement of accounts, bills, contract notes, transaction details etc. are made available to the investors on our portal at www.abhipra.com. All investors are provided with their unique user id and password for accessing their information directly from our systems.

Apart from this we are sending on  daily basis contract notes, statement of accounts, bills, margin report etc. to the investors via email and on weekly basis statement of accounts and bills are posted to the investors through courier. Proof of the deliveries are obtained and maintained at least for a period of one year. We are maintaining the statement of accounts and bi8lls with us in the soft copy for a period as per the requirement of the regulations.

Apart from this investor may further approach any of the branch and ask for his statement of accounts and bills as desired. All branches have the systems in place to make the copy of the bills from our portal and provide it to the investors.

All electronic contract notes being sent to the investors are maintained in the contract note archive database for the period as per the regulatory requirements. The log for sending the contract notes to the investor is maintained with the authorised person signing and mailing to the investors and secondly a copy of the same is also retained at the mail server.

B. Square off of Positions/ Liquidation of Securities without consent of clients.

It is herein stated that all investors are informed through physical as well as electronic mediums about their investments and the requirements of money on account of margin and loss in case of the future and options transactions or towards the purchases of the clients in the equity segment. In cases of any shortage of the money, investors are first informed about the same telephonically and are asked to make the balance payments for the shortage either on account of margin or their purchases. All such calls made to the investor through recorded lines from the head office. In case the same is not received on the pay-in date that T+2 in cases of the purchases of the shares in equity and T+1 in case of the future and options segment. Risk and surveillance department square off such position to meet with the deficiency and the same is further informed to the investor firstly through telephone, sms at the end of the day. All bills, statement of accounts are also dispatched via courier at the end of the day to the investor informing them about the squaring of the position standing in the market or selling off of the shares to recover such debits.

C. Client Registration, Documents maintenance

We, have applied all required norms in relation to the compliance of the client registration and the documentation with the clients. All forms are self explanatory about the basic requirements for opening of the account for trading and demat services.

Any investor approaching to the branch for the opening of his account deals with the marketing executive, who in accordance with the norms comply with all the requirements of know your clients and get the complete account opening forms filled and signed as per the requirements. Thereafter, the forms are forwarded to the head office for activation of the account and thereafter, enabling the investor to commence transactions on the exchange.

All such forms received at the head office, are first verified in totality and all the requirements are verified. In cases the forms are not met with the requirements, forms are reverted back to the respective branch to get form completed from the investor including filling up of all the fields with regard to the address, email, contact information etc. After the form is verified at the head office, it is then sent to the account opening division for uploading the Unique Client Code and activating the account for trading. Welcome letter is sent to the investor, informing him about the commissioning of the account. Apart from this user id and password for Abhipra portal is also generated and sent to the investor for accessing his/her information. All proof of dispatch for welcome kit and access rights are kept and maintained.

After activation of the account, all the account opening forms and registration kits are compiled and stored in the store room serially.

Investor may approach either our branches or the head office and ask for updation of details from time to time. All such requests are accepted only through written communications. Same are again firstly verified at the head office and the signatures are matched with the available specimen on record and thereafter the same is forwarded for updating the record in the system. Copy of such records are again serially stored in the store.

D. Internal Audit System

Internal auditors are appointed for the regular monitoring of the operations and activities being conducted. In cases of any weaknesses in the system, same is immediately pointed out to the management, and thereafter, the controls are implemented to avoid any deviations from the regulatory requirements and hence safeguarding the interest of the investors.

E. Collection of pay in, margin, limits setting for exposures and turnover for clients, terminals, branches and sub-broker level.

All payments from the investors towards collection of the pay-in requirements or the margins is collected at the branches level and same is recorded in the books of accounts as per the system explained here in above.

We have deployed the system based limit setting mechanism, whereby at the end of the day we calculate the securities and monies available in hand for the client and same is uploaded in the trading CTCL system on the basis of which system allow the exposure limit to the investor upto 5 times for the intra-day trading. In case the investor is not able to square off the position, he is required to make the payment maximum by T+2 in case of equity and T+1 in case of the future and options division. System open the limit for the clients as per the deposits made by him to us or the securities lying with us.

F. Allotment, Surrender of trading terminals

All trading terminals are allotted to the dealers as per the requirements of the exchange and the same is first uploaded to the exchange.

For setting limits for all the clients a separate division of RMS is working in Head Office. All clients get limits for trade according to the available balances. The process for Allotment/surrender of Id’s is as per rules and regulations of the exchange. Every time when we require id’s for trading it should be demanded in prescribed format of the exchange & same is for Surrender.

 

Risk Management Policy

The Business model for Abhipra Capital Limited (ACL) consists of both ACL MAIN Office and its various Branches network. The clients are linked or mapped to these branches  herein after called as Branches, and are engaged in trading from these branches. Apart from the trades executed from Branches, there are certain clients who are indulged in trading using the internet trading platform. Controlling and monitoring of all the trades are done by surveillance department.

Major Functions of Risk Management and Surveillance Department :

  • Allocating exposure to the clients’ trading account and enabling the clients’ to do trades.
  • Monitoring of orders & trades by clients. Checking of order rejections and increasing exposure, if required.
  • Monitoring the MTM profit/loss incurred out of trades, comparing the Actual Margin requirements of clients and the Total Margin available for clients on a one to one basis and initiating remedial actions, if required.
  • Decision taking with regard to squaring off positions on account of MTM loss or Margin shortfalls or any other reasons that may come across.
  • In short, the Risk management in relation to all the trading activities for Clients is handled by Surveillance Dept.

HIERARCHY :

In ACL, Surveillance department employs executives &  senior executives, who are reporting to Manager-Surveillance. Manager Surveillance is reporting to Head of Operations. Decisions relating to routine activities are made by Manager-Surveillance. Activities which contain high risk and complications are to be put forward to the notice of Head of Operations and proper guidance should be taken before executing any action on such activities.

Branches across the country are sub divided and allotted to these executives and senior executives and all the queries related to the trading activities and exposure requests from Branches are handled by these executives.

Abhipra Capital Limited classifies clients into High Risk Profile, Medium Risk Profile and Low Risk Profile. Such classification is done based on a personal relationship maintained with clients and respective Branch in Charges. Apart from this, all the clients are evaluated based on the initial margin and subsequent margins paid by them. The trading patterns of clients are also taken into consideration for classification of risk profile.

TRADING :

ACL is a registered stock broker of The National Stock Exchange of India Ltd. (NSE), Bombay Stock Exchange (BSE) and MCX-Stock Exchange (MCX-SX). All these exchanges following online trading system and having a settlement system of T+2 in Capital Market segment and Daily mark to market settlement & Final settlement in Futures & Options segment (including Currency Derivatives). ACL is using NOW (Neat on web) provided and maintained by National Stock Exchange) for trading in Capital Market and Derivatives segment. The software is widely accepted amongst the industry and is used by several other broking companies across the country.

Every exchange fix a minimum initial deposit to be maintained by every trading members as initial margin (Base Minimum Capital) and trading members, at their discretion, can have more deposits (Additional Base Capital) to be used as Margin for the purpose of enabling the trading activities. The exposure levels set by these exchanges are on a member level and not on client level.

The Exchange provides user id for Exchange Trading terminals and ACL in turn activated CTCL login facility and provided NOW terminal to the branches across the country. Exposures on the CTCL terminal are set by ACL surveillance Department  and are done for each and every client based on the margin available. Trading is done from branches and the orders are placed by ACL’s relationship managers.

EXPOSURE RULES :

Each and every client registered with ACL needs to provide initial deposit by way of cheque. On clearance of the cheque the client will be able to put buy or sell orders through ACL’s trading platform. The term ‘Exposure’ means the extent to which the client’s initial deposit can be utilized for trading activities. In simple terms, if a client having Rs.100 deposit is allowed to trade for Rs. 800, his exposure for trading is Eight times of the initial deposit. The multiplier in the said example is Eight times.

ACL have different exposure policy for Investors and day traders. For an investor, ACL is providing a 3 times exposure for taking delivery positions in Capital Market. For e.g.: If a client is having Rs.100000/ in his account as clear funds, he is allowed to take a delivery position up to Rs.300000/-. The difference amount needs to be brought in the form of a cheque on the same day itself or latest by T+1 day.

A day trader is provided with 8 times exposure for indulging in day trading activities. This may vary from time to time in accordance with the market conditions. The positions taken for intra-day should be cleared by 3.15 PM on the same day. Once the MTM loss of the intra-day positions reach 75% of the margin available, the positions shall be cleared from the branch concerned, failing which the positions taken for the intra-day will be cleared off from surveillance department. Intra-day exposure in Capital Market Segment can be availed based on the shares in DP & pool Account subject to a scriptwise defined haircut in the valuation and with available credit balance in the A/C.

The exposure set in Capital Market segment and Futures & options segment (including Currency Derivatives) is different. In capital market the client is allowed to take the exposure on multiplier basis which can be anywhere up to 8 times of initial deposit. Whereas, in Futures & options segment, where exchanges have stipulated fixed initial margins and exposure margin, it is compulsory to keep 100% margin either in the form of clear fund balance or as collateral securities.

The term clear fund (Total Margin Available) means the account balance available for the client in his ledger account. Collateral shares means the share which are bought by the client in respect of which no payments are outstanding and are available in the margin account of the client. All the shares transferred as collateral can be considered for exposure after deducting scriptwise defined haircut on the closing price of the shares.

In short, the total margin for exposure purpose is the sum total of fund balance + after haircut of the value of shares available in the Margin Account.

Notes to the Exposure rules :

  1. Uncleared Funds: Every payment from clients should be in the form of cheque and the same will be considered for margin only after clearance of the instrument. There will not be any exposure provided to clients based on the uncleared funds.
  2. However, based on the client’s previous track record and the value of collaterals available with ACL, exposure can be provided to clients based on uncleared funds. All such exposure will be provided on receipt of Exposure request in the predefined format signed by the Branch in charge concerned with an undertaking of responsibility or the guarantee that the cheque will be cleared. All request for amounts less than Rs. 100,000/ can be approved by the Surveillance Manager after a thorough evaluation of the client’s track record, previous instances of cheque dishonours from the branch and the reliability of the Branch in charge. All request exceeding Rs. 100,000/ will be processed only after getting approval from Head of Operations.
  3. Shares in Pool Account & DP Account will be considered for intra-day exposure in Capital Market segment subject to a haircut. Exposure for delivery will be based only on the clear fund balance.
  4. All the cheque dishonour cases are viewed seriously and debit amounts in such accounts will be cleared from surveillance dept. The normal rule for 5 days debit will not be applicable while selling the shares in cheque dishonour issues.

DEBIT Policy :

Exchanges follow a settlement schedule of T+2 in Capital Market segment, daily M to M settlement & Final Settlement in Derivatives segment. Accordingly, the exposure policy designed by ACL directing the customers to pay the debit balance on the day of purchase itself or on next day. The left out clients’ debit will not be allowed to carry forward beyond 5 days. No extension is possible beyond 5 days in whatsoever circumstances. All the debits aging more than 5 days will be cleared from Surveillance dept without further intimation to branches. It is the duty of Branch in charge/Branch Manager/Relationship Manager (RM) to communicate to the client regarding the debits in their respective accounts. All the requests with genuine reasons for retaining debit up to 5 days shall be considered only after getting approval from Head of Operations through mail.

Futures & options Segment (Including Currency Derivatives) :

In this segment, the exchanges stipulate that every position taken should be based on the available initial margin. Apart from the initial margin, exchanges have introduced exposure margin in order to meet the market volatility and risk associated.

Based on the requirements of exchanges, ACL insists that all the clients in F&O segment should have sufficient margins (Initial + Exposure margin) for taking position in the F&O segment. The margin should either be clear credit balance or in the form of exchange approved collaterals or shares duly transferred to Margin Account or as a combination of these three. The hair cut is applicable for collaterals in the form of shares before taking the valuation.

The MTM loss arising in F&O positions need to be paid on the same day (T day) so that MTM settlement can be performed properly, failing which the positions will be reduced to the available margin level. No fresh positions will be granted against unclear cheque. ACL surveillance will reduce the positions if the MTM loss incurred on a day is more than 40% of the actual margin requirement. In order to retain the position in such cases is possible only if Funds are transferred from the client’s bank account either through online banking or Fund Transfer.

Clients can provide margin in the form of securities only by transferring the securities to margin account. In such cases also sufficient credit balance should be maintained in client’s trading account in order to meet the daily MTM requirements. MSTL stipulates that minimum 10% of the total margin should be in the form of clear credit (Cash component should be 10%). If the cash component is not sufficient to meet the MTM, the shares given as margin will be liquidated to bring the position to required margin level on T+1 day.

Special Points relating to Options segment :

  1. The options buying should be allowed only against premium margin which should be in the form of clear credit balance only. Collaterals, in any form, will not be considered as margin for options buying.
  2. Options selling involve unlimited risk and thereby Exchanges specify high initial margin & exposure margin and hence will be allowed only against the exchange specified margin. Deep out of the money options selling will not be entertained and similarly option s having lesser activities will not be allowed. The credit realizing from selling of options will not be considered as liquid credit balance and henceforth will not be considered for payout of funds.

Securities under Ban Period- [Market-wide Position Limit (MWPL)] :

A facility is available on the trading system to display an alert once the open interest in the futures and options contract in a security exceeds 60% of the market wide position limits specified for such security. Such alerts are presently displayed at time intervals of 10 minutes. The aggregate open interest of the security across Exchanges shall be considered for the purpose of monitoring of MWPL. If the aggregate open interest of the security across exchanges exceeds 95% of the MWPL, no fresh positions shall be permitted for the said security from the subsequent trading day. The normal trading in the security shall be resumed only after the aggregate open outstanding position across Exchanges comes down to 80% or below of the MWPL. Once a client is taking any further position in the security for which MWPL has crossed 95% will be penalized with the amount of penalty as fixed by the exchanges. Hence, the responsibility of informing the clients regarding the MWPL limits is primarily vested with BIC/BM/Relationship Mangers.

Trading in Newly Listed Shares & Illiquid Securities :

Newly listed shares, illiquid securities and Trade-to-Trade shares having high VaR margin and trading in these scrips are subject to the high market risks and rate fluctuations. Illiquid securities & Trade-to-Trade securities will have a daily price range and there are chances that these shares reach the upper DPR or Lower DPR during a trading day. Hence, the dealing in these securities will be subject to the permission from the surveillance dept and will be subject to the available credit balance only.

Newly listed shares usually do not have any DPR and hence, the chances for rate fluctuations are more. The dealing in newly listed shares will be restricted to the available credit balance after considering the MtoM levels.

Internet Based Trading (IBT) :

ACL provides internet based trading facility for its clients through NOW software.

The exposure for IBT clients in capital market segment for intra-day will be EIGHT times and Delivery will be THREE times of the margin available. The primary responsibility to monitor the risk of IBT customer lies with the branch where the client is mapped. However, RMS team will closely monitor the risk associated with trading of such clients.

 

   

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