Policy for Inactive Clients

SEBI has advised to define inactive clients. In line with same exercise, it has been decided to review all registered clients once in a half year ending i.e 30th September and 1st April and treat such clients as ‘inactive’ who had not done any trade for one year from the date since the client was registered or one year from the date of end of financial year in which last trade was done, whichever is later and accordingly, now all those clients who fall under this category shall be treated as ‘inactive’ and marked as ‘inactive’.

However, if any such ‘inactive’ client wishes to restart his trading activities, he will be required to summit an application in the enclosed format (Annexure S -1).

Policies and Procedures of Saroj Securities

1. Penny Stocks

Saroj Securities shall be at liberty to refuse trade in Penny Stocks i.e. illiquid securities identified by the Exchanges. Penny stock shall include any illiquid stocks as declared by the stock exchanges and/or illiquid options and/or dealing in far months options and/or highly speculative stocks and/or stocks having low market capitalization and/or securities which are not in dematerialized form and/or securities which are restricted/ not permitted by the stock exchanges/SEBI/Saroj Securities.

2. Client’s Exposure Limits

Saroj Securities may provide an exposure limit for intraday and delivery based purchases by a client which would be a multiple of the clear ledger balance in the account of client plus value of the client collaterals computed after appropriate haircuts.

Saroj Securities may provide exposure for F & O/Currency Derivative based on availability of initial margin (SPAN + EXPOSURE) in the form of cash and approved securities (with appropriate hair cuts).

Saroj Securities shall have the prerogative to allow differential purchase limits and sell limits varying from client to client, depending on client worthiness, integrity and past conduct of each client.

The Client shall abide by the exposure limits, if any, set by Saroj Securities or by the Exchanges or Clearing Corporation or SEBI From time to time 

3. Brokerage Rate 

The Client shall pay to Saroj Securities brokerage and statutory levies as applicable from time to time and as they apply to Clients account, transactions and to the services that Saroj Securities render to the client. Saroj Securities shall not charge brokerage more than the maximum brokerage permissible as per Rules, Bye-Laws and Regulations of Exchanges/SEBI. However, the maximum brokerage chargeable for each transaction is

a) Cash/Capital Market segment shall be 2.5% of the transaction value excluding statutory levies.

b) Futures contracts in derivative segment shall be 2.5% of the transaction value excluding statutory levies.

c) Option contracts in derivative segment shall be 2.5% of the premium amount or Rs 100 whichever is higher.

4. Imposition of Penalty / delayed payment charges by either party, specifying the rate and the period (This must not result in funding by the broker in contravention of the applicable laws)

All Parties i.e. Saroj Securities and Client shall abide by the penalty norms if any, for delayed Payments and other violations, set by the Saroj Securities or by Exchanges or Clearing Corporation or SEBI from time to time.

5. The right to sell clients’ securities or close clients’ positions, without giving notice to the client, on account of non-payment of client’s dues (This shall be limited to the extent of settlement/margin obligation) .

Without prejudice to the other rights ,Saroj Securities shall be entitled to liquidate (sell Client’s securities) in addition to collaterals deposited /close out all or any of the Client’s positions in Cash market/Futures & Options /Currency Derivative Segment  for non payment of margins ,pay in, outstanding debts or other amounts, limited to the extent of settlement /margin obligations, and adjust the proceeds of such liquidation/close out ,if any ,against the client’s liabilities and obligations, without giving notice to the client, Any and all losses and financial charges on account of such liquidation /close out shall be charged to and borne by the Client .

As per the current Exchange requirements ,the member Broker is required to maintain a 50:50 ratio between cash and collaterals margin deposited with the exchange .Saroj Securities shall therefore have the prerogative to insist  for at least 50 % of margin in cash and may not consider the values of securities over and above the cash component for the purpose of calculating margins shortfall and close the F & O positions where it finds the deviation.

6. Shortages in obligations arising out of internal netting of trades.

Saroj Securities shall have the right to adopt a policy of its choice for internals auctions arising out of internal netting of trades and charge to defaulter seller and compensate the impacted purchaser as per the policy .The current procedure is to close such transaction at the closing rate of the settlement  date and charge 10% of  the closing value  from the seller and compensate the buyer by same amount .However this policy may be amended from time to time with prospective effect after publishing the same on our website .

7. Conditions under which a client may not be allowed to take further Position or the broker may close the existing position of a client

As per NSE Circular No- NSE/INVG /43144 dated January 07,2020 , the Exchange shall levy a penalty of minimum of 15 % upto a maximum of 100 % of profit earned /loss incurred on the trading members for both profit and loss making abnormal / non- genuine transactions executed on behalf of Clients. The client will not be allowed to place order in case the same qualifies under the purview of abnormal / non- genuine transactions. Where client is not having adequate margins as per conditions defined in risk management policies of Saroj Securities /Exchange /SEBI.

Where the client has not able to meet his pay-in /Mark to Market obligation in cash by the schedule date of pay-in irrespective of the value of collaterals available with Saroj Securities.Clear proceeds of the cheque deposited by the client to meet the pay-in /Mark To Market obligations has not yet been received by Saroj Securities .Where the open positions in a contract exceeds or are close to market wide cut off limits This policy may be amended from time to time with prospective effect after publishing the same on our website .

8. Temporarily suspending or closing a client’s account

On Receipt of written Request of the client, his account shall be closed or temporarily suspended. Saroj Securities shall have right to suspend or close the client’s account at its own discretion without any prior notice to the client if at any point of time the Saroj Securities observe the followings-:

a) Clients’ breach of any of the terms of member client agreement/ rules, Bylaws and regulations of the exchanges and/or SEBI directives.

b) Clients’ involvement in suspicious transactions, price manipulation of the securities, matching of trades and/or money laundering.

c) Client has not traded in his/her/its account for a significant period of time.

d) Clients’ failure to complete the KYC due diligence.

e) Delivery failure of important communication from the Saroj Securities such as contract notes, statement of account, statement of holding etc. sent to the client at its registered correspondence address; email id, mobile no. as per the record

f) Under any unpleasant event such as death/disablement as reported to the Saroj Securities

g) Client restricted/ prohibited to deal in the securities by the SEBI/ Exchanges

h) Clients’ inability to provide important financial/ non-financial documents / any such mandatory document as  required by Saroj Securities from time to time and/or as directed by the exchanges/SEBI to maintain such document in the records of the Saroj Securities.

9. Deregistration of Client

Saroj Securities may carry a periodic review of the client accounts every six months and as per the policy ,the Client shall be put in the inactive list or finally deregistered, under the norms, if any, specified by Saroj Securities or by the Exchanges or Corporation or SEBI From time to time.

Saroj Securities at its sole discretion may at  any time without any notice to the client, terminate the member client agreement with immediate effect and deregister the client in any of the following circumstances -:

a) If the action of the client are prima facie illegal/improper or such as to suspicious transaction or manipulate the price of any securities or facilitating money laundering /terrorist financing or disturb the normal/proper functioning of the market, either alone or in conjunction with others

b) If there is any commencement of a legal process against the client under any law in force

c) On the death/lunacy or other disability of the client.

d) If the client has been declared/filed its bankruptcy or insolvency

e) If the client, him/her/itself admitted its inability to pay his/her/its dues towards his/her/its obligations.

f) Before deregistering the client, Saroj Securities shall have right to settle any dues/debit balance in the Clients’ account by selling the securities lying in the margin account and/or beneficiary account of the client.

g) Either party can terminate the agreement between the parties upon written notice of at least 30 days in advance.

10.Client Opting for internet trading through NOW .

 Dotex international limited shall ,in no event be liable to Saroj Securities or to any third party for any loss, damage, loss of profits or for any other consequential damages ,however  caused and on any theory of liability.

Policy for prevention of money laundering

1. Obtaining sufficient information in order to identify persons who beneficially own or control securities account.

2. Verify the customer’s identity using reliable, independent source Documents, data or information.

3. Identify beneficial ownership and control, i.e. determine which Individual ultimately own(s) or control(s) the customer and/or the Person on whose behalf a transaction is being conducted.

4. Conduct ongoing due diligence and scrutiny, i.e. perform ongoing scrutiny of the transactions and account throughout the course of the business Relationship to ensure that the transactions being conducted are consistent with the registered intermediary’s knowledge of the customer, its business And risk profile, taking into account, where necessary, the customer’s source of funds.

5. No account is opened in a fictitious / benami name or on an anonymous basis.

6. Factors of risk perception (in terms of monitoring suspicious Transactions) of the client are clearly defined having regard to Clients’ location (registered office address, correspondence Addresses and other addresses if applicable), nature of business Activity, trading turnover etc  and manner of making payment for Transactions undertaken. The parameters should enable classification of clients into low, medium and high risk. .High risk clients require higher degree of due diligence and regular update of KYC profile.

7. Documentation requirement and other information to be collected in respect of different classes of clients depending on perceived risk and having regard to the requirement to the Prevention of Money Laundering Act 2002, guidelines issued by RBI and SEBI from time to time.

8. Ensure that an account is not opened where the intermediary is unable to apply appropriate clients due diligence measures / KYC policies.

9. The circumstances under which the client is permitted to act on behalf of another person / entity should be clearly laid down. It should be specified in what manner the account should be operated, transaction limits for the operation, additional authority required for transactions exceeding a specified quantity / value and other appropriate details.

10. Necessary checks and balance to be put into place before opening an account so as to ensure that the identity of the client does not match with any person having known criminal background or is not banned in any other manner.

Policy for Risk Management

1. Compliance with relevant statutory and regulatory requirements;

2. Co-operation with the relevant law enforcement authorities, including the timely disclosure of information;

3. It is generally recognized that certain clients may be of a higher or lower risk category depending on circumstances such as the client’s background, type of business relationship or transaction etc. Saroj Securities would apply to each of the clients due diligence measures on a risk sensitive basis. The basic principle enshrined in this approach is that the registered intermediaries should adopt an enhanced customer due diligence process for higher risk categories of customers.

4. Conversely, a simplified customer due diligence process may be adopted for lower risk categories of clients. In line with the risk-based approach, the type and amount of identification information and documents that Saroj Securities should obtain necessarily depend on the risk category of a particular clients.

5. All the clients should be classified in to low, medium and high risk .All the clients should be analyzed in a manner that would enable to identify client who are likely to pose a higher than the average risk. These parameters would enable Classification of clients into low, medium and high risk. Medium and High risk clients require higher degree of due diligence and requires regular update of KYC profile.

• A-Low risk clients are those who mainly purchase the shares for investment purpose takes the delivery of the shares and hold it for some time depending on the market condition.
• B- Medium risk clients are those who are engaged partially in investment activities and partially in speculative activities.
• C-High risk clients are those who are engaged in speculative activities, intraday trading in high volume and are more prone to market volatility and risk.

 6. Saroj Securities should undertake customer due diligence (“CDD”) measures depending on the type of customer, business relationship depending on client worthiness, integrity and past conduct of each client, nature of business activity, trading turnover and manner of making payment for transactions undertaken.

 7. Documentation requirement and other information to be collected in respect of different classes of clients depending on perceived risk and having regard to the requirement and guidelines issued by NSE and SEBI from time to time.

8. Ensure that an account is not opened where the Saroj Securities is unable to apply appropriate clients due diligence measures / KYC requirement .This may be applicable in cases where it is not possible to ascertain the identity of the client, information provided to the Saroj Securities is suspected to be non genuine, perceived non cooperation of the client in providing full and complete information.

9. Necessary checks and balance to be put into place before opening an account so as to ensure that the identity of the client does not match with any person having known criminal background or is not banned in any other manner

10. The Saroj Securities would do the periodic review of the trades done by clients to ascertain whether the change in risk profile of the client‘s is required.

11. The client should be identified by the Saroj Securities by using reliable sources including documents / information and personnel verification. The Saroj Securities should obtain adequate information to satisfactorily establish the identity of each new client and the purpose of the intended nature of the relationship.

12. The information should be adequate enough to satisfy competent authorities (regulatory / enforcement authorities) in future that due diligence was observed by the Saroj Securities in compliance with the Guidelines. Each original document should be seen prior to acceptance of a copy.

13. The Saroj Securities should ensure compliance with the record Keeping requirements contained in the SEBI Act, 1992, Rules and Regulations made there-under, PML Act, 2002 as well as other relevant legislation, Rules, Regulations, Exchange Bye-laws and circulars.