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Penny Stocks :
Clients may note that all the stocks and securities listed on the Stock Exchange are not actively traded. In other words, there are no readily available sellers or buyers in those securities and/or there are not sufficient trades or volumes from which the market price may be arrived at with some reliability. Such stocks are called 'illiquid securities' or 'Penny stocks'. They are comparatively more vulnerable to market manipulation and / price rigging. The spread, i.e., the difference between the offer price and bid price is usually wide and their purchase or sale at a given time may be difficult and in any case uncertain. Exchanges bring out monthly list of such securities based on the volume during the last calendar month.
We do not encourage trading in penny stocks and trade is not allowed in illiquid securities. In exceptional cases, before allowing a trade in illiquid securities or less liquid securities, we may make further enquiry, in case of instructions for sale, into the nature and duration of holding and in case of purchase instructions, into the client's trading experience, knowledge about the risks in penny stocks, risk appetite and proportion of such stocks to total investment, etc.. This may cause time gap between placing an order and its execution. The Clients will have to bear that risk of delay in execution or our rejection in respect of illiquid securities. Client's instructions for trading in illiquid securities may be rejected without assigning any reason.
Setting up Client's Exposure Limit :
The Exchange may from time to time fix client exposure limits in the interest of orderly working of the markets. Within that overall ceiling, a client can trade within the exposure limit set from time to time by the Broker for the client. Exposure Limit is fixed on the basis of the funds and value, after hair cut of the securities provided by the client for margin. Clients are requested to adhere to the exposure limits as crossing the line may involve either a call for margin or restriction on further position/exposure. We may need to vary or reduce or impose new limits urgently on the basis of our risk perception, risk profile of the client and other factors considered relevant including but not limited to limits on account of exchange/ SEBI directions/ limits (such as broker level/ market level limits in security specific / volume specific exposures etc.). Sometimes we may be unable to inform the client of such variation, reduction or imposition in advance. We shall not be held responsible for such variation, reduction or imposition or the client's inability to route any order through our trading system on account of any such variation, reduction or imposition of limits. In the sole discretion of the Company, a client may be allowed to trade beyond exposure limit or the limit may be increased. A client having availed such indulgence shall not be heard to complain about his trades only on this account and shall meet the margin shortfall at the earliest without waiting for reminder. The golden rule is Limit your exposure so as to limit your risk to your means.
Brokerage Rate :
We do not charge any brokerage in excess of the rate(s) provided by the SEBI / Exchange. The agreed rates of brokerage are part of this book-let and the clients are advised to fully satisfy themselves about the same before signing. The brokerage is charges on both Buy & Sell, except otherwise indicated in the schedule of brokerage. Brokerage rates may be changed from time to time but shall not be increased without prior 15 (fifteen) days' notice.
Delay Payment Charges and Penalties :
Clients are required and expected to meet their fund obligations immediately, when due, as per SEBI / Exchange requirements and not make us use our funds to meet their fund obligation. For the clients who do not pay on time your broker has to pay or the client has to suffer penalties by the Exchange. So as to be compensated in such an eventuality, we may levy Delay Payment Charges on the amounts, not exceeding the debit balance in the ledger, for the period of delay. The present rate of Delay payment charge is 18% per annum calculated on daily basis for the period of delay.
We do not pay interest on the clients' funds received towards margin. In exceptional cases, considering the amount of margin, its utilization and the client's past history, we may agree to deduct out of Delay Payment Charges, interest on any part of the unutilized margin at such rate as determined from time to time but not exceeding the rate of Delay Payment Charges.
We may impose reasonable penalties for bouncing of cheques, bad deliveries, non-delivery, auction on failure of payment, non payment of margin money, excess margin or any trades, actions or omissions contrary to the Rules, Regulations and Byelaws of the SEBI or Exchange, to discourage such violations and recover the same from the Client's Account directly.
Where the Company has to pay or suffer any penalty from any authority as a consequence of / in relation to / in connection with any orders/ instructions/ trades/ deals or actions of a client, the same shall be borne by the client.
Right of Sale of client's securities or closing the client's open position without giving notice:
We maintain specific banking and depository accounts, informed to the clients from time to time, for handling clients' funds and securities. The clients shall ensure timely availability of funds/securities in required form and manner, within stipulated time and in the designated bank and depository account(s) for meeting their liabilities and obtaining proper credit thereof. We do not undertake responsibility for any delay or other consequences arising from payment to any other account or non receipt in time and manner in the designated account(s).
We do not believe in selling clients' securities or closing out their positions without sufficient notice to them. On the other hand, we expect our esteemed clients to be regular and punctual in meeting their fund obligations. The requirement of margin and the value of, any security given/treated as Margin varies and multiplies with market volatility. For example – if the market goes down by 10%, not only an additional margin would be required equal to this 10%, but further margin would also be required to meet the erosion of value of the securities forming the margin. Higher is the margin deficit, shorter would be the time to make it up. However, in case the available margin falls below the given percentage, say 80%, informed in advance, we reserve the right to sell a client's securities or to close out his all or some open positions to prevent escalation of risk. The client may, however, have no grievance if we do not take such action and wait for the client's margin/response.
We would have the discretion to square off the position of Clients where the margin or security placed by the Client falls short of the requirement or where the limits given to the Client have been breached or where the Client has defaulted on his existing obligation within the stipulated time.
Shortages in obligations (arising out of internal netting of trades or otherwise):
Where a client fails to meet his securities pay-in obligations as due for any settlement and auction is not made by the Exchange because of reasons like internal netting of trades, the client's account is debited for such short delivery at "valuation price or the average of auction rate", whichever is higher. The buyer client shall be credited with the same amount as debited to seller client. In case, no auction price is available in a particular instance, the above mentioned debit/credit shall take place at closing price on the auction day plus 10% and trading day to auction day high price whichever is higher. If the buyer-client requires delivery of the said shares, he is advised to buy the same next day from the market on his own.
Where a client buys securities in one settlement, and sells the same in a subsequent settlement, without having received the payout of the securities, any resulting auction / losses will be the sole responsibility of the client.
Conditions under which a client may not be allowed to take further position or his existing position may be closed:
Subject to a client's KYC verification and his meeting initial margin and other margin requirements, a client may take positions. However, he may not be allowed to take further position under any of the following circumstances:
- SEBI or Exchange imposing restrictions on further exposures in cases of extreme volatility in the market or in a security or group of securities.
- client or the Broker exceeding or touching exposure limits set by the Exchange in the particular scrip.
- reasonable doubt as to bonafide of the transaction or identity of the client in the light of the financial status and objectives as disclosed in the KYC form.
d. reasonable doubt as to the transaction being cross trade, circular trade, fraudulent practice or connected with price manipulation or market rigging.
e. SEBI or other competent authority issuing a debarment order against the client from buying, selling or dealing in securities, unless the order is vacated.
Closing of Account at Client's Request:
The client, subject to his meeting all obligations regarding pending positions, may seek closure of his account by a letter in writing duly signed by him. Such request shall be effective from the time it has been noted in Company’s computer system and the client shall be liable to meet all his obligations.
The request for closure of account should be made by the client and not by his Power of Attorney Holder (POA).
The Company may also withhold any payouts of client or suspend his trading account due to any surveillance action or judicial /regulatory direction.
De-registering a Client:
The Company may de-register a client in any of the following events:
- Death of a client who is a natural person;
- Liquidation or winding up of a client who is a corporate;
- Insolvency or bankruptcy of the client;
- The client being debarred from dealing in securities by an order of SEBI, other Regulatory Authority or Court;
- The client is convicted of fraud or other offence in relation to securities and the said conviction is not stayed by that authority or court or superior thereto.
De-registering of a client will not absolve him from his obligations for transactions at the time of de-registration.
Policy for Inactive Accounts :
A. POLICY FOR INACTIVE ACCOUNTS:
a. How a running account will become inactive?
i. If the Client does not undertake any securities transactions in next financial year, subsequent to the financial year in which the account is made operational or thereafter if no securities transaction is undertaken during the financial year, such account will be classified as temporarily inactive.
ii. If there is no transaction in the Client's account during the next three financial years, subsequent to the financial year in which the account is made operational or if there is no securities transactions done consecutively for three financial years, such account will be classified as permanently inactive.
b. How an Inactive account will be reactivated?
i. Cases falling under the category (a) (i).
An Account can be reactivated on receipt of a written request from the Client requesting to activate such accounts, along with a copy of PAN Card, copy of latest financial statements, copy of latest bank statements / passbook with a declaration that no change has taken place in the information provided in KYC form or alternatively inform the change in KYC form.
ii. Cases falling under category (a) (ii)
The cases falling under the category (a) (ii) shall be intimated by a letter addressing the Client in his / her last known address that the Client is required to update his / her financial details along with other particulars and if the Client does not respond within one month from the date of issuance of the letter, the Client account will be closed.
If the Client wishes to re-establish the relation with the Company, he / she have to open the account afresh by filling up a new KYC form.
B. POLICY FOR RETURN OF CLIENT ASSETS:
i. For Inactive account
When an account is declared inactive, all his / her cash margin / securities margin will be returned after receipt of a written request along with an advanced acknowledgement for receipt of refund of cash margin / securities margin.
ii. For running account
1. Excess securities margin cash margin will be returned within 72 hours after receipt of a written request from the Client.
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