Risk Management Policy

Monitoring of transaction is done with co-ordination of our Account Opening department, Accounts and Risk Management Department, Technical and Compliance Department.

All these department co-ordinate and watch the client activity and assign the limit to the clients and his risk profiling accordingly..

Risk based approach

Classification of both the new and existing clients into high, medium or low risk category depending on parameters such as the customer’s background, type of business relationship, transactions etc. Application of each of the client due diligence measures on a risk sensitive basis and adoption of an enhanced customer due diligence process for high risk categories of customers and vice-á-versa.

Limit Setting

Limits shall be monitored on daily basis, taking following criteria’s: Turnover, Exposure, past trends, Location, Deposit/Collateral.

Margins

Margin must be collected on all derivative trades. Client level margin will be at management discretion in cash segment. Criteria to collect margin will be on the basis of volume of client and Past history of clients. Same client should not figure in default list in more than 5 days in a month

Trading

Trading in illiquid scrip shall not be permitted. On detection of such trading, the risk manager shall use his discretion to shutdown the terminal after intimating branch manager and sub broker

Pay-in Of Fund & Stock

Third party pay-in of securities & fund will not be accepted. Same way pay out of shares and fund will be directly done to client account only. No securities belonging to one client be used/transferred for Own purpose or for other client.

Collections

Cash will not be accepted under any circumstances. Collection of cheques from clients must be done by T+2 days except clients who have authorized us to have running account balance.

Exposure

We shall not grant further exposure to the clients when debit balances arise out of client's failure to pay the required amount and such debit balances continues beyond the fifth trading day, as reckoned from date of pay-in. (Refer SEBI Circular CIR/HO/MIRSD/MIRSD2/CIR/P/2017/64)

Apart from this there is also proper system to generate, monitor and report the suspicious transaction report.

Generation of STR

We have adequate system to get STR files from NSDL/CDSL on fortnightly basis and we keep the log of the same for our records.

Monitoring of STR

Once we received the STR files we check and verify the details of each and every client with the records available with us in respect of bank account and volume of transactions by means of their financial capabilities.

For monitoring the large volumes done by the clients we at the end of day scrutinize and analyze the volumes of each and every client with the help of trial balance of the particular trade date and assess his financial capabilities based on the financial information provided by them to us. If there is any discrepancy found then we call the client and take the reasons and source of funds for these trades for our satisfaction.

Reporting of STR

As we verify the STR in detail and same is found not suspicious and hence ‘NIL’ record is kept by us and there is no need to report the same to FIU-India.