Policies and Procedures

The Exchanges as well as SEBI has laid down various Rules, Regulations, Bye Laws and guidelines that are to be followed while transacting on an Exchange. As part of our due diligence and risk management we, Pravin Ratilal Share And Stock Brokers Ltd (hereinafter “PRSSB”), through this document has framed out various policies and procedures under the said Rules, Regulations, Bye-laws and guidance with respect to our dealing with the clients for securities market transactions.

All clients are required to take note of the said policies and procedures given herebelow and act accordingly.

1. Refusal of orders for Penny Stocks:

(a) Following type of scrips are categoried under the Penny Stock;

   Scrips which are quoting at less than Rs.10/- on any of the Exchanges.

   Scrips appearing in the list of illiquid securities issued by the Exchanges periodically.

(b) We shall not entertain orders from any of the client for transacting (either buying or selling) in any penny stocks. However, it would be considered on case to case basis,      which shall be at our sole discretion only.

(c) In case any client wants to sell the penny stock already held by them in a Demat account, the same shall be allowed on a case to case basis, at our sole discretion.

(d) Under the above circumstances, the client will have to provide a copy of their Demat Holding wherein the said penny stock is mentioned to be held by the client along with a      valid reason for sale of such penny stock.

2. Exposure Limit

  1. Under the risk management activity, the clients registering their name for trading on the NSE/BSE through us will have to provide their financial details with the required supporting proof (as mentioned in the KYC) of the same, which will be scrutinized by our panel of risk managers and accordingly the respective clients will be provided with a fixed limit for their trading activity called the Exposure Limit.
  2. According to the limit provided to the client, they can undertake transactions only upto that amount and beyond this no order will be accepted by the dealer.
  3. Following is the criteria for granting of an Exposure Limit to a client;

Cash Segment :-

  • From a risk management perspective, exposure based and/or margin based limits may be given to the clients as decided by us. Limits will be given on the basis of credit balance and/or collateral / securities of the client lying with us valued after hair cut. However, on a case to case basis, excess limits may also be allowed.

Derivative Segment :-

  • Margin based limits will be given to clients for doing trades in Derivative Segment.
  • Limits in derivative segment will be given on the basis of free credit balance and/or collateral / securities of the client available with us valued after hair cut, which will be done based on the type and nature of scrip, liquidity and volatility of the scrip, etc., from time to time.
  • In case of excess limit is availed, the same will be regularised by the end of trading session / day. However, on a case to case basis, the excess limit may be allowed to be carried forward.We may from time to time depending on the market conditions, profile and history of the client, type and nature of the scrip, etc., may at our sole discretion and in accordance to the rules, regulation, bye-laws and guidelines of the Exchanges/SEBI, change the rate of haircut applicable on the securities/collateral, number of times the limit to be given in cash / derivatives segments and take such steps as we may deem necessary.

3. Brokerage Rate

(a) According to the Rules, Regulations, Bye Laws and guidelines of the Exchanges / SEBI the maximum brokerage to be charged is 2.50%

(b) The brokerage rate charged by us would be as follows:-

   Maximum – 0.75% for delivery based(Subject to a minimum of 10 paise flat)

   0.20% for intra-day

c. Initially all new clients will be charged the maximum brokerage as mentioned in point 3(b) above. Thereafter, considering the client's volume of business as well as their        financial discipline and risk factor, the brokerage structure could be revised accordingly to a suitable level.

d. Any change in the above rates are subject to change from time to time at the sole discretion of the management. The clients shall be intimated in writing of any increase in       the above rates atleast 15 days prior to such increase. However, the clients shall not be intimated of any decrease in the same.

4. Penalty / Delayed payment charges

  1. As per the Rules, Regulations, Bye Laws and guidelines prescribed by the Exchange / SEBI, a client purchasing any security on any of the Exchanges has to make payment for the said purchases before the settlement / Pay-in date of the said transaction.
  2. In case any client fails to make the said payment within the stipulated period then a penal interest @ 18% per annum will be charged by us on such delayed payment till the time the said payment is cleared by the client.

5. Right to sell client's securities or close client's position

  1. The client shall be liable to fulfill their settlement / margin obligation.
  2. In case the client fails to fulfill their obligations, we shall have the right to sell / liquidate / close out all or any of the client's position for non-payment of margins, outstanding debts or other amounts, etc., and adjust the proceeds of such sale / liquidation / close out, against the client's settlement / margin obligations.
  3. Any and all losses and financial charges on account of such sale / liquidation / closing out shall be charged to and borne by the client themselves.
  4. We may at our sole discretion, square off any outstanding position of the client due to any restrictions in relation to volume of trading/outstanding business or margin stipulated by the Exchange, Clearing Corporation/Clearing House and/or Stock Broker/s and/or any other extraordinary event warranting such square off, under the provisions of Rule 8(1) and Rule 8(3) of SCRR (Securities Contract (Regulation)) Rules, 1957.

6. Client position

  1. The client shall not be allowed to take any further position if the client has reached their assigned exposure limit or if there is an outstanding debit balance lying in their account over a period of more than 3 days.
  2. Under the above condition the client shall have to bring in additional deposit to increase the exposure limit or make payment of the outstanding dues.
  3. In some cases, the client shall also be not allowed to take further position if their payment history is very irregular.
  4. We may at any time, at our sole discretion disallow the client from creating further/fresh position in any segment on the Exchanges or close out any existing position of the client based on our risk assessment and/or if so directed by any Government / Regulatory / Stock Exchange authority.

7. Shortage in obligation

If the client defaults in their sale obligation by not delivering the shares sold by them, due to which an internal shortage arises in a particular scrip, then under such circumstances, after informing such defaulting seller client, the share to the extent of shortage due to non-delivery by the seller client will be purchased from the market on the next trading day as and when available, under the concerned seller client’s code. It will then be delivered to the buying client on receipt of the same.

In case the share cannot be purchased back for any reason whatsoever, the same shall be closed out at 20% above the closing price on T day. Any loss of corporate benefit to the buyer shall be recovered from the defaulting seller client. Fines / penalties / charges shall be levied on the selling client on account of internal shortage.

8. Suspending or closing a Client's account

Sometimes, the client may not be willing to undertake any transaction for a certain fixed period of time due to any reason. During such periods, if the client so wishes, they may temporarily suspend or close their trading accounts so as to ensure the safety of their securities and account by submitting a written application duly signed by the holder themselves.

Besides, a clients trading account can also be temporarily suspended or closed by us if a client has reached its exposure limit and the outstanding is not being cleared within the stipulated time period, such accounts would be temporarily suspended till the time the client brings in additional deposit for increasing the exposure limit or clears the outstanding dues.

9. De-registering a Client

Notwithstanding anything to the contrary stated in the agreement, we may at our sole discretion de-register the client's account in the circumstances including but not limited to the following;

  1. The client has breached the Agreement, or has misrepresented facts at the time of entering into an Agreement or at the time of giving instruction or otherwise.
  2. If the action of the client are prima facia illegal/improper or such as to manipulate the price of any securities or disturb the normal/proper functioning of securities market, either alone or in conjunction with other.
  3. On the death / lunacy / winding up / bankruptcy / liquidation / legal incapacitation or other disability of the client.
  4. Debarment of the client by any credit rating agency or any regulatory authority.
  5. If there is any commencement of a legal process against the client under any law in force.
  6. If the client fails to fulfill his/her/their payment obligation either fully or partially under this agreement, or suffers any adverse material change in its financial position.
  7. If the client fails to maintain the Securities Account or any replacement thereof.

In such a case, the company shall have the right to close out the existing positions / contracts, sell the collateral to recover its dues, if any, before de-registering the client's account.

The aforementioned policies and procedures have been framed out under various clauses mentioned in the Rules, Regulations, Bye-laws and guidelines prescribed by SEBI and the Exchanges as well as the amendments brought out from time to time. In case of any contravening clause framed herein, the relevant clause mentioned under the said Rules, Regulations, Bye-laws and guidelines of SEBI and the Exchanges shall overrule such contravening clause.

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