ANNEXURE - 4 MANDATORY

RIGHTS AND OBLIGATIONS OF STOCK BROKERS, SUB-BROKERS AND CLIENTS

as prescribed by SEBI and Stock Exchanges
1. The client shall invest/trade in those securities/ 10. The stock broker and sub-broker shall maintain all the
contracts/other instruments admitted to dealings on the details of the client as mentioned in the account opening
Exchanges as defined in the Rules, Byelaws and form or any other information pertaining to the client,
Regulations of Exchanges/ Securities and Exchange confidentially and that they shall not disclose the same to
Board of India (SEBI) and circulars/ notices issued there any person/authority except as required under any
under from time to time. law/regulatory requirements. Provided however that
2. The stock broker, sub-broker and the client shall be the stock broker may so disclose information about his
bound by all the Rules, Byelaws and Regulations of the client to any person or authority with the express
Exchange and circulars/ notices issued there under and permission of the client.
Rules and Regulations of SEBI and relevant notifications
MARGINS
of Government authorities as may be in force from time
to time. 11. The client shall pay applicable initial margins, withholding
3. The client shall satisfy itself of the capacity of the stock margins, special margins or such other margins as are
broker to deal in securities and/or deal in derivatives considered necessary by the stock broker or the
contracts and wishes to execute its orders through the Exchange or as may be directed by SEBI from time to
stock broker and the client shall from time to time time as applicable to the segment(s) in which the client
continue to satisfy itself of such capability of the stock trades. The stock broker is permitted in its sole and
broker before executing orders through the stock absolute discretion to collect additional margins (even
broker. though not required by the Exchange, Clearing
4. The stock broker shall continuously satisfy itself about House/Clearing Corporation or SEBI) and the client shall
the genuineness and financial soundness of the client and be obliged to pay such margins within the stipulated
investment objectives relevant to the services to be time.
provided. 12. The client understands that payment of margins by the
5. The stock broker shall take steps to make the client client does not necessarily imply complete satisfaction of
aware of the precise nature of the Stock broker's liability all dues. In spite of consistently having paid margins, the
for business to be conducted, including any limitations, client may, on the settlement of its trade, be obliged to
the liability and the capacity in which the stock broker pay (or entitled to receive) such further sums as the
acts. contract may dictate/require.
6. The sub-broker shall provide necessary assistance and TRANSACTIONS AND SETTLEMENTS
co-operate with the stock broker in all its dealings with
the client(s). 13. The client shall give any order for buy or sell of a
security/derivatives contract in writing or in such form
CLIENT INFORMATION
or manner, as may be mutually agreed between the
7. The client shall furnish all such details in full as are client and the stock broker. The stock broker shall
required by the stock broker in "Account Opening
ensure to place orders and execute the trades of the
Form" with supporting details, made mandatory by
client, only in the Unique Client Code assigned to that
stock exchanges/SEBI from time to time.
client.
8. The client shall familiarize himself with all the mandatory
provisions in the Account Opening documents. Any 14. The stock broker shall inform the client and keep him
additional clauses or documents specified by the stock apprised about trading/settlement cycles, delivery/
broker shall be non-mandatory, as per terms & payment schedules, any changes therein from time to
conditions accepted by the client. time, and it shall be the responsibility in turn of the client
9. The client shall immediately notify the stock broker in to comply with such schedules/procedures of the
writing if there is any change in the information in the relevant stock exchange where the trade is executed.
'account opening form' as provided at the time of 15. The stock broker shall ensure that the money/securities
account opening and thereafter; including the deposited by the client shall be kept in a separate
information on winding up petition/insolvency petition account, distinct from his/its own account or account of
or any litigation which may have material bearing on his any other client and shall not be used by the stock broker
capacity. The client shall provide/update the financial for himself/itself or for any other client or for any
information to the stock broker on a periodic basis. purpose other than the

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 purposes mentioned in Rules, Regulations, circulars, 21. The stock broker shall bring to the notice of the relevant
notices, guidelines of SEBI and/or Rules, Regulations, Exchange the information about default in
Bye-laws, circulars and notices of Exchange. payment/delivery and related aspects by a client. In case
where defaulting client is a corporate entity/
16. Where the Exchange(s) cancels trade(s) suo moto all partnership/proprietary firm or any other artificial legal
such trades including the trade/s done on behalf of the entity, then the name(s) of Director(s)/ Promoter(s)/
client shall ipso facto stand cancelled, stock broker shall Partner(s)/ Proprietor as the case may be, shall also be
be entitled to cancel the respective contract(s) with communicated by the stock broker to the relevant
client(s). Exchange(s).
17. The transactions executed on the Exchange are subject DISPUTE RESOLUTION
to Rules, Byelaws and Regulations and circulars/notices
22. The stock broker shall provide the client with the
issued thereunder of the Exchanges where the trade is
relevant contact details of the concerned Exchanges and
executed and all parties to such trade shall have
SEBI.
submitted to the jurisdiction of such court as may be
specified by the Byelaws and Regulations of the 23. The stock broker shall co-operate in redressing
Exchanges where the trade is executed for the purpose grievances of the client in respect of all transactions
of giving effect to the provisions of the Rules, Byelaws routed through it and in removing objections for bad
and Regulations of the Exchanges and the delivery of shares, rectification of bad delivery, etc.
circulars/notices issued thereunder. 24. The client and the stock broker shall refer any claims
BROKERAGE and/or disputes with respect to deposits, margin money,
etc., to arbitration as per the Rules, Byelaws and
18. The Client shall pay to the stock broker brokerage and Regulations of the Exchanges where the trade is
statutory levies as are prevailing from time to time and as executed and circulars/notices issued thereunder as
they apply to the Client's account, transactions and to may be in force from time to time.
the services that stock broker renders to the Client. The
25. The stock broker shall ensure faster settlement of any
stock broker shall not charge brokerage more than the
arbitration proceedings arising out of the transactions
maximum brokerage permissible as per the rules,
entered into between him vis-à-vis the client and he shall
regulations and bye-laws of the relevant stock
be liable to implement the arbitration awards made in
exchanges and/or rules and regulations of SEBI.
such proceedings.
LIQUIDATION AND CLOSE OUT OF POSITION
26. The client/stock-broker understands that the
19. Without prejudice to the stock broker's other rights instructions issued by an authorized representative for
(including the right to refer a matter to arbitration), the dispute resolution, if any, of the client/stock-broker shall
client understands that the stock broker shall be entitled be binding on the client/stock-broker in accordance
to liquidate/close out all or any of the client's positions with the letter authorizing the said representative to
for non-payment of margins or other amounts, deal on behalf of the said client/stock-broker.
outstanding debts, etc. and adjust the proceeds of such TERMINATION OF RELATIONSHIP
liquidation/close out, if any, against the client's
27. This relationship between the stock broker and the
liabilities/obligations. Any and all losses and financial
client shall be terminated; if the stock broker for any
charges on account of such liquidation/closing-out shall
reason ceases to be a member of the stock exchange
be charged to and borne by the client.
including cessation of membership by reason of the
20. In the event of death or insolvency of the client or his/its stock broker's default, death, resignation or expulsion or
otherwise becoming incapable of receiving and paying if the certificate is cancelled by the Board.
for or delivering or transferring securities which the
28. The stock broker, sub-broker and the client shall be
client has ordered to be bought or sold, stock broker
entitled to terminate the relationship between them
may close out the transaction of the client and claim
without giving any reasons to the other party, after giving
losses, if any, against the estate of the client. The client or
notice in writing of not less than one month to the other
his nominees, successors, heirs and assignee shall be
parties. Notwithstanding any such termination, all
entitled to any surplus which may result there from. The rights, liabilities and obligations of the parties arising out
client shall note that transfer of funds/securities in favor of or in respect of transactions entered into prior to the
of a Nominee shall be valid discharge by the stock termination of this relationship shall continue to
broker against the legal heir.

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 subsist and vest in/be binding on the respective parties 34. The stock broker shall send a complete 'Statement of
or his/its respective heirs, executors, administrators, Accounts' for both funds and securities in respect of
legal representatives or successors, as the case may be. each of its clients in such periodicity and format within
such time, as may be prescribed by the relevant
29. In the event of demise/insolvency of the sub-broker or
Exchange, from time to time, where the trade is
the cancellation of his/its registration with the Board
executed. The Statement shall also state that the client
or/withdrawal of recognition of the sub-broker by the
shall report errors, if any, in the Statement within such
stock exchange and/or termination of the agreement
time as may be prescribed by the relevant Exchange
with the sub broker by the stock broker, for any reason
from time to time where the trade was executed, from
whatsoever, the client shall be informed of such
the receipt thereof to the Stock broker.
termination and the client shall be deemed to be the
direct client of the stock broker and all clauses in the 35. The stock broker shall send daily margin statements to
'Rights and Obligations' document(s) governing the the clients. Daily Margin statement should include, inter-
stock broker, sub-broker and client shall continue to be alia, details of collateral deposited, collateral utilized and
in force as it is, unless the client intimates to the stock collateral status (available balance/due from client) with
broker his/its intention to terminate their relationship by break up in terms of cash, Fixed Deposit Receipts
giving a notice in writing of not less than one month. (FDRs), Bank Guarantee and securities.
ADDITIONAL RIGHTS AND OBLIGATIONS 36. The Client shall ensure that it has the required legal
30. The stock broker shall ensure due protection to the capacity to, and is authorized to, enter into the
client regarding client's rights to dividends, rights or relationship with stock broker and is capable of
bonus shares, etc. in respect of transactions routed performing his obligations and undertakings hereunder.
through it and it shall not do anything which is likely to All actions required to be taken to ensure compliance of
harm the interest of the client with whom and for whom all the transactions, which the Client may enter into shall
they may have had transactions in securities. be completed by the Client prior to such transaction
31. The stock broker and client shall reconcile and settle being entered into.
their accounts from time to time as per the Rules, 37. The stock broker / stock broker and depository
Regulations, Bye Laws, Circulars, Notices and participant shall not directly / indirectly compel the
Guidelines issued by SEBI and the relevant Exchanges clients to execute Power of Attorney (PoA) or
where the trade is executed. Demat Debit and Pledge Instruction (DDPI) or deny
services to the client if the client refuses to execute
32. The stock broker shall issue a contract note to his PoA or DDPI.
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 ELECTRONIC CONTRACT NOTES (ECN)
order number, trade number, trade time, trade price,
trade quantity, details of the derivatives contract, client 38. In case, client opts to receive the contract note in
code, brokerage, all charges levied etc. and with all electronic form, he shall provide an appropriate e-mail
other relevant details as required therein to be filled in id to the stock broker. The client shall communicate to
and issued in such manner and within such time as the stock broker any change in the email-id through a
prescribed by the Exchange. The stock broker shall send physical letter. If the client has opted for internet trading,
contract notes to the investors within one working day the request for change of email id may be made through
of the execution of the trades in hard copy and/or in the secured access by way of client specific user id and
electronic form using digital signature. password.
33. The stock broker shall make pay out of funds or delivery 39. The stock broker shall ensure that all ECNs sent through
of securities, as the case may be, to the Client within one the e-mail shall be digitally signed, encrypted, non-
working day of receipt of the payout from the relevant tamper able and in compliance with the provisions of the
Exchange where the trade is executed unless otherwise IT Act, 2000. In case, ECN is sent through e-mail as an
specified by the client and subject to such terms and attachment, the attached file shall also be secured with
conditions as may be prescribed by the relevant the digital signature, encrypted and non-tamperable.
Exchange from time to time where the trade is
executed.

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 40. The client shall note that non-receipt of bounced mail force from time to time.
notification by the stock broker shall amount to delivery 5. The stock broker and the client shall abide by any award
of the contract note at the e-mail ID of the client. passed by the Arbitrator(s) under the Arbitration and
The stock broker shall retain ECN and acknow- ledgement Conciliation Act, 1996. However, there is also a
of the e-mail in a soft and non-tamperable form in the manner provision of appeal within the stock exchanges, if either
prescribed by the exchange in compliance with the party is not satisfied with the arbitration award.
provisions of the IT Act, 2000 and as per the extant 6. Words and expressions which are used in this document
rules/regulations/ circulars/ guidelines issued by SEBI/Stock but which are not defined herein shall, unless the
Exchanges from time to time. The proof of delivery i.e., log context otherwise requires, have the same meaning as
report generated by the system at the time of sending the assigned thereto in the Rules, Byelaws and Regulations
contract notes shall be maintained by the stock broker for the and circulars/notices issued thereunder of the
specified period under the extant regulations of SEBI/stock Exchanges/SEBI.
exchanges. The log report shall provide the details of the 7. All additional voluntary clauses/document added by the
contract notes that are not delivered to the client/e- mails stock broker should not be in contravention with
rejected or bounced back. The stock broker shall take all rules/regulations/notices/ circulars of Exchanges/SEBI.
possible steps to ensure receipt of notification of bounced mails Any changes in such voluntary clauses/document(s)
by him at all times within the stipulated time period under the need to be preceded by a notice of 15 days. Any changes
extant regulations of SEBI/stock exchanges. in the rights and obligations which are specified by
1. The stock broker shall continue to send contract notes Exchanges/SEBI shall also be brought to the notice of the
in the physical mode to such clients who do not opt to clients.
receive the contract notes in the electronic form. 8. If the rights and obligations of the parties hereto are
Wherever the ECNs have not been delivered to the altered by virtue of change in Rules and regulations of
client or has been rejected (bouncing of mails) by the e- SEBI or Bye-laws, Rules and Regulations of the relevant
mail ID of the client, the stock broker shall send a stock Exchanges where the trade is executed, such
physical contract note to the client within the stipulated changes shall be deemed to have been incorporated
time under the extant regulations of SEBI/stock herein in modification of the rights and obligations of the
exchanges and maintain the proof of delivery of such parties mentioned in this document.
physical contract notes.
2. 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

3. 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
thereunder or Rules and Regulations of SEBI.
4. 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
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 MANDATORY
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 password of the client and/or his authorized
trading (IBT) and securities trading through the use of representative are not revealed to any third party
wireless technology that shall include the use of devices including employees and dealers of the stock broker.
such as mobile phone, laptop with data card, etc. which 6. The Client shall immediately notify the Stock broker in
use Internet Protocol (IP). The stock broker shall writing if he forgets his password, discovers security
comply with all requirements applicable to internet flaw in Stock Broker's IBT System, discovers/suspects
based trading/securities trading using wireless discrepancies/ unauthorized access through his
technology as may be specified by SEBI & the Exchanges username /password/account with full details of such
from time to time. unauthorized use, the date, the manner and the
2. The client is desirous of investing/trading in securities transactions effected pursuant to such unauthorized
use, etc.
and for this purpose, the client is desirous of using either
the internet based trading facility or the facility for 7. The Client is fully aware of and understands the risks
securities trading through use of wireless technology. associated with availing of a service for routing orders
The Stock broker shall provide the Stock broker's IBT over the internet/securities trading through wireless
Service to the Client, and the Client shall avail of the technology and Client shall be fully liable and responsible
Stock broker's IBT Service, on and subject to for any and all acts done in the Client's Username/
SEBI/Exchanges Provisions and the terms and password in any manner whatsoever.
conditions specified on the Stock broker's IBT Web Site 8. The stock broker shall send the order/trade
provided that they are in line with the norms prescribed confirmation through email to the client at his request.
by Exchanges/SEBI. The client is aware that the order/ trade confirmation is
3. The stock broker shall bring to the notice of client the also provided on the web portal. In case client is trading
features, risks, responsibilities, obligations and liabilities using wireless technology, the stock broker shall send
associated with securities trading through wireless the order/trade confirmation on the device of the client.
technology/internet/smart order routing or any other 9. The client is aware that trading over the internet
technology should be brought to the notice of the client involves many uncertain factors and complex hardware,
by the stock broker. software, systems, communication lines, peripherals,
4. The stock broker shall make the client aware that the etc. are susceptible to interruptions and dislocations.
Stock Broker's IBT system itself generates the initial The Stock broker and the Exchange do not make any
password and its password policy as stipulated in line representation or warranty that the Stock broker's IBT
with norms prescribed by Exchanges/SEBI. Service will be available to the Client at all times without
any interruption.
5. The Client shall be responsible for keeping the
Username and Password confidential and secure and 10. The Client shall not have any claim against the Exchange
shall be solely responsible for all orders entered and or the Stock broker on account of any suspension,
transactions done by any person whosoever through interruption, non-availability or malfunctioning of the
Stock broker's IBT System or Service or the Exchange's
the Stock broker's IBT System using the Client's
service or systems or non-execution of his orders due to
Username and/or Password whether or not such
any link/system failure at the Client/Stock brokers/
person was authorized to do so. Also the client is aware
Exchange end for any reason beyond the control of the
that authentication technologies and strict security
stock broker/Exchanges.
measures are required for the internet trading/
securities trading through wireless technology through
order routed system and undertakes to ensure that the
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 ANNEXURE - 5 MANDATORY
RISK DISCLOSURE DOCUMENT FOR CAPITAL MARKET AND DERIVATIVES SEGMENTS
which may inter alia include your filling the know your client
This document contains important information on trading in
form, reading the rights and obligations, do's and don'ts, etc.,
Equities/Derivatives Segments of the stock exchanges. All
and are subject to the Rules, Byelaws and Regulations of
prospective constituents should read this document before
relevant Stock exchanges, its Clearing Corporation,
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,
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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:-

1. 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 /

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 derivatives contracts as compared to active securities / through, the stop price. Sell stop orders are
derivatives contracts. As a result, your order may only entered ordinarily below the current price, and
be partially executed, or may be executed with buy stop orders are entered ordinarily above the
relatively greater price difference or may not be current price. When the security / derivatives
executed at all. contract reaches the pre -determined price, or
trades through such price, the stop loss order
1.2.1 Buying or selling securities / derivatives contracts converts to a market/limit order and is executed
as part of a day trading strategy may also result at the limit or better. There is no assurance
into losses, because in such a situation, securities / therefore that the limit order will be executable
derivatives contracts may have to be sold / since a security / derivatives contract might
purchased at low / high prices, compared to the penetrate the pre-determined price, in which
expected price levels, so as not to have any open case, the risk of such order not getting executed
position or obligation to deliver or receive a arises, just as with a regular limit order.
security / derivatives contract.
1.5 Risk of News Announcements:
1.3 Risk of Wider Spreads:
Spread refers to the difference in best buy price and best News announcements that may impact the price of
sell price. It represents the differential between the stock / derivatives contract may occur during trading,
price of buying a security / derivatives contract and and when combined with lower liquidity and higher
immediately selling it or vice versa. Lower liquidity and volatility, may suddenly cause an unexpected positive or
higher volatility may result in wider than normal spreads negative movement in the price of the security /
for less liquid or illiquid securities / derivatives contracts. contract.
This in turn will hamper better price formation.
1.6 Risk of Rumors:
1.4 Risk-reducing orders:
Rumors about companies / currencies at times float in
The placing of orders (e.g., "stop loss" orders, or "limit" the market through word of mouth, newspapers,
orders) which are intended to limit losses to certain websites or news agencies, etc. The investors should be
amounts may not be effective many a time because rapid wary of and should desist from acting on rumors.
movement in market conditions may make it impossible
to execute such orders. 1.7 System Risk:
1.4.1 A "market" order will be executed promptly, High volume trading will frequently occur at the market
subject to availability of orders on opposite side, opening and before market close. Such high volumes
without regard to price and that, while the may also occur at any point in the day. These may cause
customer may receive a prompt execution of a delays in order execution or confirmation.
"market" order, the execution may be at available
prices of outstanding orders, which satisfy the 1.7.1 During periods of volatility, on account of market
order quantity, on price time priority. It may be participants continuously modifying their order
understood that these prices may be significantly quantity or prices or placing fresh orders, there
different from the last traded price or the best may be delays in order execution and its
price in that security / derivatives contract. confirmations.
1.4.2 A "limit" order will be executed only at the "limit" 1.7.2 Under certain market conditions, it may be
price specified for the order or a better price. difficult or impossible to liquidate a position in the
However, while the customer receives price market at a reasonable price or at all, when there
protection, there is a possibility that the order are no outstanding orders either on the buy side
may not be executed at all. or the sell side, or if trading is halted in a security /
1.4.3 A stop loss order is generally placed "away" from derivatives contract due to any action on account
the current price of a stock / derivatives contract, of unusual trading activity or security / derivatives
and such order gets activated if and when the contract hitting circuit filters or for any other
security / derivatives contract reaches, or trades reason.

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1.8 System/Network Congestion: B. If you fail to deposit the additional amount by the
deadline or if an outstanding debt occurs in your
Trading on exchanges is in electronic mode, based on account, the stock broker may liquidate a part of
satellite/leased line based communications, or the whole position or substitute securities. In
combination of technologies and computer systems to this case, you will be liable for any losses incurred
place and route orders. Thus, there exists a possibility of due to such close-outs.
communication failure or system problems or slow or
C. Under certain market conditions, an investor may
delayed response from system or trading halt, or any find it difficult or impossible to execute
such other problem/glitch whereby not being able to transactions. For example, this situation can occur
establish access to the trading system/network, which due to factors such as illiquidity i.e. when there are
may be beyond control and may result in delay in insufficient bids or offers or suspension of trading
processing or not processing buy or sell orders either in due to price limit or circuit breakers etc.
part or in full. You are cautioned to note that although
D. In order to maintain market stability, the following
these problems may be temporary in nature, but when
steps may be adopted: changes in the margin rate,
you have outstanding open positions or unexecuted
increases in the cash margin rate or others. These
orders, these represent a risk because of your new measures may also be applied to the existing
obligations to settle all executed transactions. open interests. In such conditions, you will be
2. As far as Derivatives segments are concerned, please required to put up additional margins or reduce
note and get yourself acquainted with the following your positions.
additional features:- E. You must ask your broker to provide the full
2.1 Effect of "Leverage" or "Gearing": details of derivatives contracts you plan to trade
i.e. the contract specifications and the associated
In the derivatives market, the amount of margin is small obligations.
relative to the value of the derivatives contract so the
2.2 Currency specific risks:
transactions are 'leveraged' or 'geared'. Derivatives
trading, which is conducted with a relatively small 1. The profit or loss in transactions in foreign currency-
amount of margin, provides the possibility of great profit denominated contracts, whether they are traded in
or loss in comparison with the margin amount. But your own or another jurisdiction, will be affected by
transactions in derivatives carry a high degree of risk. fluctuations in currency rates where there is a need to
convert from the currency denomination of the
You should therefore completely understand the contract to another currency.
following statements before actually trading in
2. Under certain market conditions, you may find it difficult
derivatives and also trade with caution while taking into
or impossible to liquidate a position. This can occur, for
account one's circumstances, financial resources, etc. If
example when a currency is deregulated or fixed trading
the prices move against you, you may lose a part of or
bands are widened.
whole margin amount in a relatively short period of
time. Moreover, the loss may exceed the original margin 3. Currency prices are highly volatile. Price movements for
amount. currencies are influenced by, among other things:
changing supply-demand relationships; trade, fiscal,
A. Futures trading involve daily settlement of all monetary, exchange control programs and policies of
positions. Every day the open positions are governments; foreign political and economic events and
marked to market based on the closing level of the policies; changes in national and international interest
index / derivatives contract. If the contract has rates and inflation; currency devaluation; and sentiment
moved against you, you will be required to deposit of the market place. None of these factors can be
the amount of loss (notional) resulting from such controlled by any individual advisor and no assurance
movement. This amount will have to be paid can be given that an advisor's advice will result in
within a stipulated time frame, generally before profitable trades for a participating customer or that a
commencement of trading on next day. customer will not incur losses from such events.

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2.3 Risk of Option holders: 3. TRADING THROUGH WIRELESS TECHNOLOGY /
SMART ORDER ROUTING OR ANY OTHER
1. An option holder runs the risk of losing the entire TECHNOLOGY:
amount paid for the option in a relatively short period
Any additional provisions defining the features, risks,
of time. This risk reflects the nature of an option as a
responsibilities, obligations and liabilities associated with
wasting asset which becomes worthless when it
securities trading through wireless technology/ smart
expires. An option holder who neither sells his option
order routing or any other technology should be brought
in the secondary market nor exercises it prior to its
to the notice of the client by the stock broker.
expiration will necessarily lose his entire investment
in the option. If the price of the underlying does not 4. GENERAL
change in the anticipated direction before the option 4.1 The term 'constituent' shall mean and include a
expires, to an extent sufficient to cover the cost of the client, a customer or an investor, who deals with a
option, the investor may lose all or a significant part of stock broker for the purpose of acquiring and/or
his investment in the option. selling of securities / derivatives contracts through
2. The Exchanges may impose exercise restrictions and the mechanism provided by the Exchanges.
have absolute authority to restrict the exercise of 4.2 The term 'stock broker' shall mean and include a
options at certain times in specified circumstances. stock broker, a broker or a stock broker, who has
2.4 Risks of Option Writers: been admitted as such by the Exchanges and who
holds a registration certificate from SEBI.
1. If the price movement of the underlying is not in the
anticipated direction, the option writer runs the risks
of losing substantial amount.
2. 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.
3. 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.

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 ANNEXURE - 6 MANDATORY
GUIDANCE NOTE - DO'S AND DON'Ts FOR TRADING ON THE EXCHANGE(S) FOR INVESTORS
BEFORE YOU BEGIN TO TRADE 12. Note that facility of Trade Verification is available on
stock exchanges’ websites, where details of trade as
1. Ensure that you deal with and through only SEBI
mentioned in the contract note may be verified. Where
registered intermediaries. You may check their SEBI
trade details on the website do not tally with the details
registration certificate number from the list available on
mentioned in the contract note, immediately get in
the Stock exchanges websites (www.nseindia.com,
www.bseindia.com, www.msei.in) and SEBI website touch with the Investors Grievance Cell of the relevant
Stock exchange.
www.sebi.gov.in.
2. Ensure that you fill the KYC form completely and strike 13. In case you have given specific authorization for
off the blank fields in the KYC form. maintaining running account, payout of funds or delivery
of securities (as the case may be), may not be made to
3. Ensure that you have read all the mandatory documents you within one working day from the receipt of payout
viz. Rights and Obligations, Risk Disclosure Document, from the Exchange. Thus, the stock broker shall
Policy and Procedure document of the stock broker. maintain running account for you subject to the
4. Ensure to read, understand and then sign the voluntary following conditions:
clauses, if any, agreed between you and the stock
a) Such authorization from you shall be dated, signed
broker. Note that the clauses as agreed between you
by you only and contains the clause that you may
and the stock broker cannot be changed without your
revoke the same at any time.
consent.
5. Get a clear idea about all brokerage, commissions, fees b) The actual settlement of funds and securities shall
and other charges levied by the broker on you for be done by the stock broker, at least once in a
trading and the relevant provisions/ guidelines specified calendar quarter or month, depending on your
by SEBI/Stock exchanges. preference. While settling the account, the stock
broker shall send to you a ‘statement of accounts’
6. Obtain a copy of all the documents executed by you containing an extract from the client ledger for
from the stock broker free of charge. funds and an extract from the register of securities
7. In case you wish to execute Power of Attorney (POA) in displaying all the receipts/deliveries of funds and
favour of the Stock broker, authorizing it to operate securities. The statement shall also explain the
your bank and demat account, please refer to the retention of funds and securities and the details of
guidelines issued by SEBI/Exchanges in this regard. the pledged shares, if any.
TRANSACTIONS AND SETTLEMENTS c) On the date of settlement, the stock broker may
retain the requisite securities/funds towards
8. The stock broker may issue electronic contract notes
outstanding obligations and may also retain the
(ECN) if specifically authorized by you in writing. You
funds expected to be required to meet derivatives
should provide your email id to the stock broker for the
margin obligations for next 5 trading days,
same. Don’t opt for ECN if you are not familiar with
calculated in the manner specified by the
computers.
exchanges. In respect of cash market transactions,
9. Don’t share your internet trading account’s password the stock broker may retain entire pay-in
with anyone. obligation of funds and securities due from clients
10. Don’t make any payment in cash to the stock broker. as on date of settlement and for next day’s
business, he may retain funds/securities/margin to
11. Make the payments by account payee cheque in favour
the extent of value of transactions executed on the
of the stock broker. Don’t issue cheques in the name of
day of such settlement in the cash market.
sub-broker. Ensure that you have a documentary proof
of your payment/deposit of securities with the stock d) You need to bring any dispute arising from the
broker, stating date, scrip, quantity, towards which statement of account or settlement so made to the
bank/ demat account such money or securities notice of the stock broker in writing preferably
deposited and from which bank/ demat account. within 7 (seven) working days from the date of

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 receipt of funds/securities or statement, as the 17. Familiarize yourself with the protection accorded to the
case may be. In case of dispute, refer the matter in money and/or securities you may deposit with your
writing to the Investors Grievance Cell of the stock broker, particularly in the event of a default or the
relevant Stock exchanges without delay. stock broker’s insolvency or bankruptcy and the extent
to which you may recover such money and/or securities
14. In case you have not opted for maintaining running
may be governed by the Bye-laws and Regulations of the
account and pay-out of funds/securities is not received
relevant Stock exchange where the trade was executed
on the next working day of the receipt of payout from
and the scheme of the Investors’ Protection Fund in
the exchanges, please refer the matter to the stock
force from time to time.
broker. In case there is dispute, ensure that you lodge a
complaint in writing immediately with the Investors DISPUTES/ COMPLAINTS
Grievance Cell of the relevant Stock exchange.
18. Please note that the details of the arbitration
15. Please register your mobile number and email id with proceedings, penal action against the brokers and
the stock broker, to receive trade confirmation alerts/ investor complaints against the stock brokers are
details of the transactions through SMS or email, by the displayed on the website of the relevant Stock exchange.
end of the trading day, from the stock exchanges.
19. In case your issue/problem/grievance is not being sorted
IN CASE OF TERMINATION OF TRADING out by concerned stock broker/sub-broker then you
MEMBERSHIP may take up the matter with the concerned Stock
16. In case, a stock broker surrenders his membership, is exchange. If you are not satisfied with the resolution of
expelled from membership or declared a defaulter; your complaint then you can escalate the matter to SEBI.
Stock exchanges gives a public notice inviting claims 20. Note that all the stock broker/sub-brokers have been
relating to only the "transactions executed on the trading mandated by SEBI to designate an e-mail ID of the
system" of Stock exchange, from the investors. Ensure grievance redressal division/ compliance officer
that you lodge a claim with the relevant Stock exchanges
exclusively for the purpose of registering complaints.
within the stipulated period and with the supporting
documents.

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 MANDATORY
POLICIES AND PROCEDURES AS PER SEBI CIRCULAR NO. MIRSD/ SE /CIR-19/2009 DATED 3 DEC,
2009
1. Refusal of orders for penny/illiquid stock appropriate in the circumstances. The client agrees that
The stock broker may from time to time limit (quantity/ the losses, if any on account of such refusal or due to
value)/refuse orders in one or more securities due to delay caused by such review, shall be borne exclusively
various reasons including market liquidity, value of by the client alone.
security(ies), the order being for securities which are not The stock broker is required only to communicate/
in the permitted list of the stock broker/ advise the parameters for the calculation of the
exchange(s)/SEBI. Provided further that stock broker margin/security requirements as rate(s)/percentage(s)
may require compulsory settlement/advance payment of the dealings, through anyone or more means or
of expected settlement value/ delivery of securities for methods such as post /speed post/courier/registered
settlement prior to acceptance/placement of order(s) as post/registered A.D/ facsimile/telegram/cable/e-
well. The client agrees that the losses, if any on account mail/voice mails/ telephone (telephone includes such
of such refusal or due to delay caused by such limits, shall devices as mobile phones etc.) including SMS on the
be borne exclusively by the client alone. The stock mobile phone or any other similar device; by messaging
broker may require reconfirmation of orders, which are on the computer screen of the client's computer; by
larger than that specified by the stock broker's risk informing the client through employees/agents of the
management, and is also aware that the stock broker has stock broker; by publishing/displaying it on the website
the discretion to reject the execution of such orders of the stock broker/making it available as a download
based on its risk perception. from the website of the stock broker; by displaying it on
2. Setting up client's exposure limits and conditions the notice board of the branch/office through which the
under which a client may not be allowed to take client trades or if the circumstances, so require, by radio
further position or the broker may close the broad cast/ televi sion broad ca st/ newspa pe rs
existing position of a client. advertisements etc; or any other suitable or applicable
mode or manner. The client agrees that the postal
The stock broker may from time to time impose and department/the courier company /newspaper company
vary limits on the orders that the client can place through and the e-mail/voice mail service provider and such
the stock broker's trading system (including exposure other service providers shall be the agent of the client
limits, turnover limits, limits as to the number, value and the delivery shall be complete when communication
and/or kind of securities in respect of which orders can is given to the postal department/the courier
be placed etc.). The client is aware and agrees that the company/the e-mail/voice mail service provider, etc. by
stock broker may need to vary or reduce the limits or the stock broker and the client agrees never to challenge
impose new limits urgently on the basis of the stock the same on any grounds including delayed receipt/non
broker's risk perception and other factors considered receipt or any other reasons whatsoever and once
relevant by the stock broker including but not limited to parameters for margin/security requirements are so
limits on account of exchange/ SEBI directions/limits ( communicated, the client shall monitor his/her/its
such as broker level/ market level limits in security position (dealings/trades and valuation of security) on
specific/volume specific exposures etc.) , and the stock his/her/its own and provide the required/deficit
broker may be unable to inform the client of such margin/security forthwith as required from time to time
variation, reduction or imposition in advance. The client whether or not any margin call or such other separate
agrees that the stock broker shall not be responsible for communication to that effect is sent by the stock broker
such variation, reduction or imposition or the client's to the client and /or whether or not such
inability to route any order through the stock broker's communication is received by the client.
trading system on account of any such variation,
reduction or imposition of limits. The client further The client is not entitled to trade without adequate
agrees that the stock broker may at any time, at its sole margin/security and that it shall be his/her/its
discretion and without prior notice, prohibit or restrict responsibility to ascertain beforehand the
the client's ability to place orders or trade in securities margin/security requirements for his/ her /its
through the stock broker, or it may subject any order orders/trades/deals and to ensure that the required
placed by the client to a review before its entry into the margin/security is made available to the stock broker in
trading systems and may refuse to execute/allow such form and manner as may be required by the stock
execution of orders due to but not limited to the reason broker. If the client's order is executed despite a shortfall
of lack of margin/securities or the order being outside in the available margin, the client, shall, whether or not
the limits set by stock broker/exchange/ SEBI and any the stock broker intimates such shortfall in the margin to
other reasons which the stock broker may deem the client, make up the shortfall suo moto immediately.

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 The client further agrees that he /she/it shall be on the strike price of the option contract. It is hereby
responsible for all orders (including any orders that may clarified that brokerage charged on options
be executed without the required margin in the client's contracts shall not exceed 2.5% of the premium
account) &/or any claim /loss/ damage arising out of the amount or Rs 100/- (per lot) whichever is higher.
non availability /shortage of margin /security required by 4. Imposition of penalty/delayed payment charges
the stock broker &/or exchange &/or SEBI. The client agrees that any amounts which are overdue
The stock broker is entitled to vary the form (Le., the from the client towards trading or on account of any
replacement of the margin/security in one form with the other reason to the stock broker will be charged with
margin/security in any other form, say, in the form of delayed payment charges @1.5% per month. The client
money instead of shares) &/or quantum &/or percentage agrees that the stock broker may impose fines/penalties
of the margin &/or security required to be for any orders/trades/deals/actions of the client which
deposited/made available, from time to time. are contrary to this agreement/rules/ regulations/bye
The margin/security deposited by the client with the laws of the exchange or any other law for the time being
stock broker are not eligible for any interest. in force, at such rates and in such form as it may deem fit.
Further where the stock broker has to pay any fine or
The stock broker is entitled to include/appropriate bear any punishment from any authority in connection
any/all payout of funds &/or securities towards with/as a consequence of/in relation to any of the
m argi n/ securit y without requi ring speci fic orders/trades/deals/actions of the client, the same shall
authorizations for each payout. be borne by the client. The client agrees to pay to the
The stock broker is entitled to transfer funds &/ or stock broker brokerage, commission, fees, all taxes,
securities from his account for one exchange &/or one duties, levies imposed by any authority including but not
segment of the exchange to his/her/its account for limited to the stock exchanges (including any amount
another exchange &/or another segment of the same due on account of reassessment/backlogs etc.),
exchange whenever applicable and found necessary by transaction expenses, incidental expenses such as
the stock broker. postage, courier etc. as they apply from time to time to
The client also agrees and authorises the stock broker to the client's account/ transactions/services that the client
treat/adjust his/ her/its margin/security lying in one avails from the stock broker.
exchange &/or one segment of the exchange/towards 5. The right to sell clients' securities or close clients'
the margin/security/pay in requirements of another positions, without giving notice to the client, on
exchange &/or another segment of the exchange. account\ of non-payment of client's dues
The stock broker is entitled to disable/freeze the The stock broker maintains centralized banking and
account &/or trading facility/any other service. facility, if, securities handling processes and related banking and
in the opinion of the stock broker, the client has depository accounts at designated place. The client shall
committed a crime/fraud or has acted in contradiction of ensure timely availability of funds/securities in
this agreement or/is likely to evade/violate any laws, designated form and manner at designated time and in
rules, regulations, directions of a lawful authority designated bank and depository account(s) at
whether Indian or foreign or if the stock broker so designated place, for meeting his/her/its pay in
apprehends. obligation of funds and securities. The stock broker shall
3. Applicable brokerage rate not be responsible for any claim/loss/damage arising out
of non availability/short availability of funds/securities by
The stock broker is entitled to charge brokerage within the client in the designated account(s) of the stock
the limits imposed by exchange which at present is as broker for meeting the pay in obligation of either funds
under: or securities. If the client gives orders/trades in the
a. For Cash Market Segment: The maximum brokerage anticipation of the required securities being available
chargeable in relation to trades effected in the subsequently for pay in through anticipated payout from
securities admitted to dealings on the Capital Market the exchange or through borrowings or any off market
segment of the Exchange shall be 2.5 % of the delivery(s) or market delivery(s) and if such anticipated
contract price exclusive of statutory levies. It is availability does not materialize in actual availability of
hereby further clarified that where the sale/purchase securities/funds for pay in for any reason whatsoever
value of a share is Rs.10/ - or less, a maximum including but not limited to any delays/shortages at the
brokerage of 25 paise per share may be collected. exchange or stock broker level/non release of margin by
b. For Option contracts: Brokerage for option the stock broker etc., the losses which may occur to the
contracts shall be charged on the premium amount at client as a consequence of such shortages in any manner
which the option contract was bought or sold and not such as on account of auctions/square off/closing outs

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etc., shall be solely to the account of the client and the selling the same in such manner and at such rate
client agrees not to hold the stock broker responsible for which the stock broker may deem fit in its absolute
the same in any form or manner whatsoever. discretion. It is agreed and understood by the client
that securities here includes securities which are
In case the payment of the margin/security is made by pending delivery/receipt.
the client through a bank instrument, the stock broker
shall be at liberty to give the benefit/credit for the same iv. To liquidate/square off partially or fully the position of
only on the realization of the funds from the said bank sale &/or purchase in anyone or more
instrument etc. at the absolute discretion of the stock securities/contracts in such manner and at such rate
broker. which the stock broker may decide in its absolute
discretion.
Where the margin /security is made available by way of
securities or any other property, the stock broker is v. To take any other steps which in the given
empowered to decline its acceptance as margin/security circumstances, the stock broker may deem fit.
&/or to accept it at such reduced value as the stock The client agrees that the loss(s) if any, on account of
broker may deem fit by applying haircuts or by valuing it anyone or more steps as enumerated herein above
by marking it to market or by any other method as the being taken by the stock broker, shall be borne
stock broker may deem fit in its absolute discretion. exclusively by the client alone and agrees not to
The stock broker has the right but not the obligation, to question the reasonableness, requirements, timing,
cancel all pending orders and to sell/close/liquidate all manner, form, pricing etc., which are chosen by the
open positions/ securities/shares at the pre-defined stock broker.
square off time or when Mark to Market (M-T-M) vi. All open positions in the F&O segment (except for
percentage reaches or crosses stipulated margin those who have opted for physical settlement)
percentage mentioned on the website, whichever is
earlier. The stock broker will have sole discretion to should be squared off before 10 am on expiry day.
decide referred stipulated margin percentage depending Stock Broker will square off all the open positions
upon the market condition. In the event of such square from 10 am onwards on expiry day for all open
off, the client agrees to bear all the losses based on actual
executed prices. In case open position (Le. short/long) positions (in stock derivatives) for that expiry
gets converted into delivery due to non square off Irrespective of the margin availability.
because of any reason whatsoever, the client agrees to
provide securities/funds to fulfill the payin obligation vii. In case of price moment >80% of circuit limit,
failing which the client will have to face auctions or open positions will be squared off in case of adverse
internal close outs; in addition to this the client will have MTM for that security . E.g., in case of circuit limit
to pay penalties and charges levied by exchange in actual being 20%, for any 16% up moments, all short
and losses, if any. Without prejudice to the foregoing, the position will be squared off.
client shall also be solely liable for all and any penalties
and charges levied by the exchange(s). a) In case of positions cannot squared off due to
lack of liquidity, the trade will result in delivery
The stock broker is entitled to prescribe the date and trade and will be settled accordingly.
time by which the margin/security is to be made available
and the stock broker may refuse to accept any payments b) In case of non squared off short positions, 30 %
in any form after such deadline for margin/security (or above) extra margin will be blocked till
expires. auction settlement is complete.
Notwithstanding anything to the contrary in the c) In case of non square off long positions, client
agreement or elsewhere, if the client fails to maintain or need to pay the balance amount to the extent of
provide the required margin/fund/security or to meet entire obligation on T day only. We will initiate
the funds/margins/ securities pay in obligations for the square off non-paid up obligations on T+1 day
orders/trades/deals of the client within the prescribed from start of market hours.
time and form, the stock broker shall have the right
without any further notice or communication to the 6. Shortages in obligations arising out of internal
client to take any one or more of the following steps: netting of trades
i. To withhold any payout of funds/securities. Stock broker shall not be obliged to deliver any
ii. To withhold/disable the trading/dealing facility to the securities or pay any money to the client unless and until
client. the same has been received by the stock broker from
iii. To liquidate one or more security(s) of the client by the exchange, the clearing corporation/ clearing house
or other company or entity liable to make the payment
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 and the client has fulfilled his/her/ its obligations first. iv. If a receiver, administrator or liquidator has been
The policy and procedure for settlement of shortages in appointed or allowed to be appointed of all or any
obligations arising out of internal netting of trades is as part of the undertaking of the Client;
under:
v. If the Client has voluntarily or compulsorily become
The securities delivered short are purchased from the subject of proceedings under any bankruptcy or
market on T+3 day which is the Auction Day on insolvency law or being a company, goes into
Exchange, and the purchase consideration (inclusive of all liquidation or has a receiver appointed in respect of its
statutory taxes & levies) is debited to the short delivering assets or refers itself to the Board for Industrial and
seller client. Financial Reconstruction or under any other law
a. If securities cannot be purchased from market due to providing protection as a relief undertaking;
any reason whatsoever on T+3 day they can be vi. If the Client being a partnership firm, has any steps
covered from the market on any subsequent trading taken by the Client and/ or its partners for
days. In case any reason whatsoever (any error or dissolution of the partnership;
omission) any delay in covering of securities leads to vii. If the Client have taken or suffered to be taken any
higher losses, stock broker will not be liable for the action for its reorganization, liquidation or
same. Where the delivery is matched partially or dissolution;
fully at the Exchange Clearing, the delivery and viii. If the Client has made any material
debits/credits shall be as per Exchange Debits and misrepresentation of facts, including (without
Credits. limitation) in relation to the Security;
ix. If there is reasonable apprehension that the Client is
b. In cases of securities having corporate actions all unable to pay its debts or the Client has admitted its
cases of short delivery of cum transactions which inability to pay its debts, as they become payable;
cannot be auctioned on cum basis or where the cum
basis auction payout is after the book closure/record x. If the Client suffers any adverse material change in
date, would be compulsory closed out at higher of his/her/its financial position or defaults in any other
agreement with the Stock broker; If the Client is in
10% above the official closing price on the auction
breach of any term, condition or covenant of this
day or the highest traded price from first trading day Agreement;
of the settlement till the auction day
xi. If any covenant or warranty of the Client is incorrect
7. Conditions under which a client may not be or untrue in any material respect; However
allowed to take further position or the broker may notwithstanding any termination of the agreement,
close the existing position of a client. all transactions made under/pursuant to this
agreement shall be subject to all the terms and
We have margin based RMS System. Client may take conditions of this agreement and parties to this
exposure upto the amount of margin available with us. agreement submit to exclusive jurisdiction of courts
Client may not be allowed to take position in case of of law at the place of execution of this agreement by
non-availability/ shortage of margin as per our RMS Stock Broker.
policy of the company. The existing position of the client 9. Policy regarding treatment of inactive accounts:
is also liable to square off/ close out without giving notice Client account will be considered as in active if the client
due to shortage of margin/non making of payment for does not trade for a period of one year. Calculation will
their pay-in obligation/outstanding debts. be done at the beginning of every month and those
clients who have not traded even a single time will be
8. De-registering a client considered as inactive. Steps will be taken for
Notwithstanding anything to the contrary stated in the transferring the shares/credit balance, if any, to such
agreement, the stock broker shall be entitled to client within one week of identifying the client as inactive.
Whenever such inactive account holders restart trading, a
terminate the agreement with immediate effect in any of
telephonic/personal confirmation will be made from the
the following circumstances: client to ensure that there is no error in identification the
i. If the action of the Client are prima facie illegal/ client.
improper or such as to manipulate the price of any Client Acceptance of Policies and Procedures
securities or disturb the normal/ proper functioning stated hereinabove:
of the market, either alone or in conjunction with I/We have fully understood the same and do hereby sign
others. the same and agree not to call into question the validity,
ii. If there is any commencement of a legal process enforceability and applicability of any provision/clauses
against the Client under any law in force; this document any circumstances what so ever. These
Policies and Procedures may be amended/changed unilaterally
iii. On the death/lunacy or other disability of the Client; by the broker, provided the change is informed to me/us
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with through anyone or more means or methods such as
post/speed post/courier/registered post/registered
AD/facsimile/telegram/cable/e-mail/voice mails/telephone
(telephone includes such devices as mobile phones etc.)
including SMS on the mobile phone or any other similar
device; by messaging on the computer screen of the client's
computer; by informing the client through employees/agents
of the stock broker; by publishing/displaying it on the website
of the stock broker/making it available as a download from
the website of the stock broker; by displaying it on the notice
board of the branch/office through which the client trades or
if the circumstances, so require, by radio broadcast/television
broadcast/newspapers advertisements etc; or any other
suitable or applicable mode or manner. I/we agree that the
postal department/the courier company /newspaper
company and the e-mail/ voice mail service provider and such
other service providers shall be my/our agent and the
delivery shall be complete when communication is given to
the postal department/the courier company/the e-mail/voice
mail service provider, etc. by the stock broker and I/we agree
never to challenge the same on any grounds including delayed
receipt/non receipt or any other reasons whatsoever. These
Policies and Procedures shall always be read along with the
agreement and shall be compulsorily referred to while
deciding any dispute/difference or claim between me/ us and
stock broker before any court of law/judicial/adjudicating
authority including arbitrator/ mediator etc.

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 DEPOSITORY ACCOUNT DOCUMENT MANDATORY
RIGHTS AND OBLIGATIONS OF BENEFICIAL OWNER AND DEPOSITORY PARTICIPANT
AS PRESCRIBED BY SEBI & DEPOSITORIES
General Clause Separate Accounts
1. The Beneficial Owner and the Depository participant 9. The DP shall open separate accounts in the name of
(DP) shall be bound by the provisions of the each of the beneficial owners and securities of each
Depositories Act, 1996, SEBI (Depositories and beneficial owner shall be segregated and shall not be
Participants) Regulations, 1996, Rules and Regulations of mixed up with the securities of other beneficial owners
Securities and Exchange Board of India (SEBI), and/or DP's own securities held in dematerialized form.
Circulars/Notifications/Guidelines issued there under, 10. The DP shall not facilitate the Beneficial Owner to
Bye Laws and Business Rules/Operating Instructions create or permit any pledge and /or hypothecation or
issued by the Depositories and relevant notifications of any other interest or encumbrance over all or any of
Government Authorities as may be in force from time to such securities submitted for dematerialization and/or
time. held in demat account except in the form and manner
2. The DP shall open/activate demat account of a prescribed in the Depositories Act, 1996, SEBI
beneficial owner in the depository system only after (Depositories and Participants) Regulations, 1996 and
receipt of complete Account opening form, KYC and Bye-Laws/Operating Instructions/ Business Rules of the
supporting documents as specified by SEBI from time to Depositories.
time. Transfer of Securities
Beneficial Owner information 11. The DP shall effect transfer to and from the demat
3. The DP shall maintain all the details of the beneficial accounts of the Beneficial Owner only on the basis of an
owner(s) as mentioned in the account opening form, order, instruction, direction or mandate duly authorized
supporting documents submitted by them and/or any by the Beneficial Owner and the DP shall maintain the
other information pertaining to the beneficial owner original documents and the audit trail of such
confidentially and shall not disclose the same to any authorizations.
person except as required by any statutory, legal or
12. The Beneficial Owner reserves the right to give standing
regulatory authority in this regard.
instructions with regard to the crediting of securities in
4. The Beneficial Owner shall immediately notify the DP in
his demat account and the DP shall act according to such
writing, if there is any change in details provided in the
instructions.
account opening form as submitted to the DP at the
time of opening the demat account or furnished to the Statement of account
DP from time to time. 13. The DP shall provide statements of accounts to the
Fees/Charges/Tariff beneficial owner in such form and manner and at such
5. The Beneficial Owner shall pay such charges to the DP time as agreed with the Beneficial Owner and as
for the purpose of holding and transfer of securities in specified by SEBI/depository in this regard.
dematerialized form and for availing depository services 14. However, if there is no transaction in the demat
as may be agreed to from time to time between the DP account, or if the balance has become Nil during the
and the Beneficial Owner as set out in the Tariff Sheet year, the DP shall send one physical statement of holding
provided by the DP. It may be informed to the Beneficial annually to such BOs and shall resume sending the
Owner that "no charges are payable for opening of demat transaction statement as and when there is a transaction
accounts” in the account.
6. In case of Basic Services Demat Accounts, the DP shall 15. The DP may provide the services of issuing the
adhere to the charge structure as laid down under the statement of demat accounts in an electronic mode if
relevant SEBI and/or Depository circulars/directions/ the Beneficial Owner so desires. The DP will furnish to
notifications issued from time to time. the Beneficial Owner the statement of demat accounts
7. The DP shall not increase any charges/tariff agreed upon under its digital signature, as governed under the
unless it has given a notice in writing of not less than Information Technology Act, 2000. However if the DP
thirty days to the Beneficial Owner regarding the same. does not have the facility of providing the statement of
Dematerialization demat account in the electronic mode, then the
8. The Beneficial Owner shall have the right to get the Participant shall be obliged to forward the statement of
securities, which have been admitted on the demat accounts in physical form.
Depositories, dematerialized in the form and manner 16. In case of Basic Services Demat Accounts, the DP shall
laid down under the Bye Laws, Business Rules and send the transaction statements as mandated by SEBI
Operating Instructions of the depositories. and/or Depository from time to time.

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Manner of Closure of Demat account 23. The DP or the Depository shall have the right to
17. The DP shall have the right to close the demat account freeze/defreeze the accounts of the Beneficial Owners
of the Beneficial Owner, for any reasons whatsoever, on receipt of instructions received from any regulator
provided the DP has given a notice in writing of not less or court or any statutory authority.
than thirty days to the Beneficial Owner as well as to Redressal of Investor grievance
the Depository. Similarly, the Beneficial Owner shall 24. The DP shall redress all grievances of the Beneficial
have the right to close his/her demat account held with Owner against the DP within a period of thirty days
the DP provided no charges are payable by him/her to from the date of receipt of the complaint.
the DP. In such an event, the Beneficial Owner shall Authorized representative
specify whether the balances in their demat account 25. If the Beneficial Owner is a body corporate or a legal
should be transferred to another demat account of the entity, it shall, along with the account opening form,
Beneficial Owner held with another DP or to furnish to the DP, a list of officials authorized by it, who
rematerialize the security balances held. shall represent and interact on its behalf with the
18. Based on the instructions of the Beneficial Owner, the Participant. Any change in such list including additions,
DP shall initiate the procedure for transferring such deletions or alterations thereto shall be forthwith
security balances or rematerialize such security communicated to the Participant.
balances within a period of thirty days as per procedure Law and Jurisdiction
specified from time to time by the depository. Provided 26. In addition to the specific rights set out in this
further, closure of demat account shall not affect the document, the DP and the Beneficial owner shall be
rights, liabilities and obligations of either the Beneficial entitled to exercise any other rights which the DP or
Owner or the DP and shall continue to bind the parties the Beneficial Owner may have under the Rules, Bye
to their satisfactory completion. Laws and Regulations of the respective Depository in
Default in payment of charges which the demat account is opened and
19. In event of Beneficial Owner committing a default in circulars/notices issued there under or Rules and
the payment of any amount provided in Clause 5 & 6 Regulations of SEBI.
within a period of thirty days from the date of demand, 27. The provisions of this document shall always be subject
without prejudice to the right of the DP to close the to Government notification, any rules, regulations,
demat account of the Beneficial Owner, the DP may guidelines and circulars/ notices issued by SEBI and
charge interest at a rate as specified by the Depository Rules, Regulations and Bye-laws of the relevant
from time to time for the period of such default. Depository, where the Beneficial Owner maintains his/
20. In case the Beneficial Owner has failed to make the her account, that may be in force from time to time.
payment of any of the amounts as provided in Clause
28. The Beneficial Owner and the DP shall abide by the
5&6 specified above, the DP after giving two days
arbitration and conciliation procedure prescribed
notice to the Beneficial Owner shall have the right to
under the Bye-laws of the depository and that such
stop processing of instructions of the Beneficial Owner
procedure shall be applicable to any disputes between
till such time he makes the payment along with interest,
the DP and the Beneficial Owner.
if any.
29. Words and expressions which are used in this
Liability of the Depository
document but which are not defined herein shall unless
21. As per Section 16 of Depositories Act, 1996,
the context otherwise requires, have the same
1. Without prejudice to the provisions of any other
meanings as assigned thereto in the Rules, Bye-laws
law for the time being in force, any loss caused to
and Regulations and circulars/notices issued there
the beneficial owner due to the negligence of the
under by the depository and/or SEBI
depository or the participant, the depository shall
indemnify such beneficial owner. 30. Any changes in the rights and obligations which are
2. Where the loss due to the negligence of the specified by SEBI/Depositories shall also be brought to
participant under Clause (1) above, is indemnified the notice of the clients at once.
by the depository, the depository shall have the 31. If the rights and obligations of the parties hereto are
right to recover the same from such participant. altered by virtue of change in Rules and regulations of
Freezing/ Defreezing of accounts SEBI or Bye-laws, Rules and Regulations of the relevant
22. The Beneficial Owner may exercise the right to Depository, where the Beneficial Owner maintains
freeze/defreeze his/her demat account maintained his/her account, such changes shall be deemed to have
with the DP in accordance with the procedure and been incorporated herein in modification of the rights
subject to the restrictions laid down under the Bye and obligations of the parties mentioned in this
Laws and Business Rules/Operating Instructions. document.

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