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Annexure – 1
INDEX
ACCOUNT OPENING KIT
PART I – MANDATORY DOCUMENTS
Sr.
No
Document Brief
Significance
Pages From-
To
1. Account
Opening Form
A. KYC form - Document
captures basic information
about the client Annexure- 2 5
B. Document captures the
additional information on
trading account details and an
instruction/check list.
Annexure -3 -
2. Rights and
Obligations
Document stating the
Rights & Obligations of
stock broker/trading
member and client for
trading on exchanges
Annexure- 4 6 - 11
3. Risk
Disclosure
Document
(RDD)
Document detailing risks
associated with dealing in the securities market
Annexure- 5 22 - 25
4. Guidance note Document detailing Do’s and
Don’ts for trading on exchanges,
for the education of the
investors.
Annexure- 6 26 - 27
5. Policies and
Procedures for
client dealings
Copy of various policies and
procedures of the Trading
Member relating to dealings
with the clients
Annexure- 7 28 - 36
6. Tariff sheet Document detailing the
rate/amount of brokerage and
other charges levied on
the client for trading on the
stock exchange(s)
Annexure- 8 37
PART II – VOLUNTARY DOCUMENTS
1. Annexure 4(i)
- Rights and
Obligations
Documents capturing additional terms and
conditions for trading. 12- 21
Page - 1
PART III ADDITIONAL DOCUMENTS
1. Write up on
PMLA
requirement
& Annexure- 9
Brief write-up on the provisions of Prevention of
Money Laundering Act 2002 (PMLA) and submit
documents.
38 - 45
2. Contact Details of
Senior Officials
Document giving details of Senior Officials 3
3. Investor Grievance Id
Document giving details of Investor Grievance id of
the exchanges along-with contact details to redress
grievances, if any.
4
Name of stock broker/trading
member/clearing member Nomura Financial Advisory and
Securities (India) Private Limited
SEBI Registration No. and
date
BSE - INB011299030 (June 12, 2008); Currency
Clearing Number 3242
NSE - INB/INF 231299034 (June 20, 2008) &
INE231299034 (October 23, 2009);
MSEI - INE261299034 (January 21, 2010)
Registered office address
Contact Details Ceejay House, Level - 11, Dr. Annie Besant Road,
Worli, Mumbai 400 018
Tel: + 91 22 4037 4037
Fax : + 91 22 4037 4111
Correspondence office address
Contact Details Same as above
Compliance officer name, phone no. &
email id: Jyoti Vineet Tandon Tel: (B) +9122 4037 4037; (D) +91 22 4037 4901 [email protected]
Managing Director Name,
phone no. & email id:
Prabhat Awasthi Tel: (B) +9122 4037 4037; (D) +91 22 4037 4180 [email protected]
For any grievance/dispute please contact stock broker Nomura Financial Advisory and Securities (India) Private Limited at the above address and Phone no. 91-4037 4037. In case not satisfied with the response, please contact the concerned exchange(s) on following nos.
Exchange Contact No. Email ID
NSE (022) 26598190 [email protected]
BSE (022) 2272 8097 [email protected]
MSEI (022) 6112 9000 (Ext:9028) [email protected].
Page - 2
Page - 3
Contact Details of the Senior Officials
Sr.
No Name Designation Contact Details Email Id
1.Prabhat
Awasthi
Managing Director- Country Head-India
Tel : (B) +91 22 4037 4037
(D) +91 22 4037 4180 [email protected]
2.
Jyoti
Vineet
Tandon
Executive Director-
Head of Compliance Tel : (B) +91 22 4037 4037
(D) +91 22 4037 4901 [email protected]
3. Ravi Raja Co-Head of Operations, India
Tel : (B) +91 22 4037 4037
(D) +91 22 4037 4372 [email protected]
Page - 4
Contact details of the Investor Grievance Cell of the Exchanges
Exchange Contact No. Email ID
NSE National Stock Exchange of India
Ltd. Exchange Plaza, 5th Floor
Plot no. C/1, G Block
Bandra-Kurla Complex
Bandra (East) Mumbai -400 051.
Tel : (022) 26598190
BSE Bombay Stock Exchange
Limited Department of
Investor Services, P J Towers,
1st floor, Dalal Street, Fort,
Mumbai - 400001. Tel : (022) 2272 8097 / 22721233/34
MSEI Metropolitan Stock Exchange of India
Limited
Investor Service Center, Vibgyor
Towers, 4th floor, Plot No C 62, G -
Block,
Opp. Trident Hotel,
Bandra Kurla Complex, Bandra (E),
Mumbai – 400098
Telephone Number: 022-6112 9028
Page - 5
Annexure - 2
KNOWYOURCLIENT (KYC)APPLICATIONFORM
For Non-Individuals PHOTOGRAPH
Please fill this form in ENGLISH and in BLOCK LETTERS. A.IDENTITYDETAILS
1. Name of the Applicant:
2. Date of incorporation: (dd/mm/yyyy) & Place of incorporation:
Please affix the
recent passport
size photographs
and sign across it
3. Date of commencement of business: (dd/mm/yyyy)
4. a. PAN: b. Registration No. (e.g. CIN):
5. Status (please tick any one):
Private Limited Co./Public Ltd. Co./Body Corporate/Partnership/Trust/Charities/NGO’s/FI/ FII/HUF/AOP/ Bank/Government
Body/Non-Government Organization/Defense Establishment/BOI/Society/LLP/ Others (please specify)
B.ADDRESSDETAILS
1. Address for correspondence:
City/town/village: Pin Code: State: Country:
2. Contact Details: Tel. (Off.) Tel. (Res.) Mobile No.: Fax: Email id:
3. Specify the proof of address submitted for correspondence address:
4. Registered Address (if different from above):
City/town/village: Pin Code: State: Country:
C.OTHERDETAILS
1. Name, PAN, residential address and photographs of Promoters/Partners/Karta/Trustees and whole time directors:
2. a) DIN of whole time directors:
b) Aadhaar number of Promoters/Partners/Karta:
DECLARATION
I/We hereby declare that the details furnished above are true and correct to the best of my/our knowledge and belief and I/we
undertake to inform you of any changes therein, immediately. In case any of the above information is found to be false or
untrue or misleading or misrepresenting, I am/we are aware that I/we may be held liable for it.
Name & Signature of the Authorised Signatory Date: (dd/mm/yyyy)
FOROFFICEUSEONLY
Originals verified and Self-Attested Document copies received
(………………………………………..)
Name & Signature of the Authorised Signatory
Date …………………. Seal/Stamp of the intermediary
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Annexure – 4
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/contracts/other instruments admitted to dealings on the Exchangesas defined in the Rules, Byelaws and Regulations of Exchanges/ Securities and Exchange Board of India (SEBI)and circulars/notices issued there under from time to time.
2. The stock broker, sub-broker and the client shall be bound by all the Rules, Byelaws and Regulations of theExchange and circulars/notices issued there under and Rules and Regulations of SEBI and relevant notifications ofGovernment authorities as may be in force from time to time.
3. The client shall satisfy itself of the capacity of the stock broker to deal in securities and/or deal in derivativescontracts and wishes to execute its orders through the stock broker and the client shall from time to time continueto satisfy itself of such capability of the stock broker before executing orders through the stock broker.
4. The stock broker shall continuously satisfy itself about the genuineness and financial soundness of the client andinvestment objectives relevant to the services to be provided.
5. The stock broker shall take steps to make the client aware of the precise nature of the Stock broker’s liability forbusiness to be conducted, including any limitations, the liability and the capacity in which the stock broker acts.
6. The sub-broker shall provide necessary assistance and co-operate with the stock broker in all its dealings with theclient(s).
CLIENT INFORMATION
7. The client shall furnish all such details in full as are required by the stock broker in "Account Opening Form” withsupporting details, made mandatory by stock exchanges/SEBI from time to time.
8. The client shall familiarize himself with all the mandatory provisions in the Account Opening documents. Anyadditional clauses or documents specified by the stock broker shall be non-mandatory, as per terms & conditionsaccepted by the client.
9. The client shall immediately notify the stock broker in writing if there is any change in the information in the ‘accountopening form’ as provided at the time of account opening and thereafter; including the information on winding uppetition/insolvency petition or any litigation which may have material bearing on his capacity. The client shallprovide/update the financial information to the stock broker on a periodic basis.
10. The stock broker and sub-broker shall maintain all the details of the client as mentioned in the account openingform or any other information pertaining to the client, confidentially and that they shall not disclose the same to anyperson/authority except as required under any law/regulatory requirements. Provided however that the stock brokermay so disclose information about his client to any person or authority with the express permission of the client.
MARGINS
11. The client shall pay applicable initial margins, withholding margins, special margins or such other margins as areconsidered necessary by the stock broker or the Exchange or as may be directed by SEBI from time to time asapplicable to the segment(s) in which the client trades. The stock broker is permitted in its sole and absolutediscretion to collect additional margins (even though not required by the Exchange, Clearing House/ClearingCorporation or SEBI) and the client shall be obliged to pay such margins within the stipulated time.
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12. The client understands that payment of margins by the client does not necessarily imply complete satisfaction of alldues. In spite of consistently having paid margins, the client may, on the settlement of its trade, be obliged to pay(or entitled to receive) such further sums as the contract may dictate/require.
TRANSACTIONS AND SETTLEMENTS
13. The client shall give any order for buy or sell of a security/derivatives contract in writing or in such form or manner,as may be mutually agreed between the client and the stock broker. The stock broker shall ensure to place ordersand execute the trades of the client, only in the Unique Client Code assigned to that client.
14. The stock broker shall inform the client and keep him apprised about trading/settlement cycles, delivery/paymentschedules, any changes therein from time to time, and it shall be the responsibility in turn of the client to complywith such schedules/procedures of the relevant stock exchange where the trade is executed.
15. The stock broker shall ensure that the money/securities deposited by the client shall be kept in a separate account,distinct from his/its own account or account of any other client and shall not be used by the stock broker forhimself/itself or for any other client or for any purpose other than the purposes mentioned in Rules, Regulations,circulars, notices, guidelines of SEBI and/or Rules, Regulations, Bye-laws, circulars and notices of Exchange.
16. Where the Exchange(s) cancels trade(s) suo moto all such trades including the trade/s done on behalf of the clientshall ipso facto stand cancelled, stock broker shall be entitled to cancel the respective contract(s) with client(s).
17. The transactions executed on the Exchange are subject to Rules, Byelaws and Regulations and circulars/noticesissued thereunder of the Exchanges where the trade is executed and all parties to such trade shall have submittedto the jurisdiction of such court as may be specified by the Byelaws and Regulations of the Exchanges where thetrade is executed for the purpose of giving effect to the provisions of the Rules, Byelaws and Regulations of theExchanges and the circulars/notices issued thereunder.
BROKERAGE
18. The Client shall pay to the stock broker brokerage and statutory levies as are prevailing from time to time and asthey apply to the Client’s account, transactions and to the services that stock broker renders to the Client. Thestock broker shall not charge brokerage more than the maximum brokerage permissible as per the rules,regulations and bye-laws of the relevant stock exchanges and/or rules and regulations of SEBI.
LIQUIDATION AND CLOSE OUT OF POSITION
19. Without prejudice to the stock broker's other rights (including the right to refer a matter to arbitration), the clientunderstands that the stock broker shall be entitled to liquidate/close out all or any of the client's positions for non- payment of margins or other amounts, outstanding debts, etc. and adjust the proceeds of such liquidation/close out, if any, against the client's liabilities/obligations. Any and all losses and financial charges on account of such liquidation/closing-out shall be charged to and borne by the client.
20. In the event of death or insolvency of the client or his/its otherwise becoming incapable of receiving and paying foror delivering or transferring securities which the client has ordered to be bought or sold, stock broker may close outthe transaction of the client and claim losses, if any, against the estate of the client. The client or his nominees,successors, heirs and assignee shall be entitled to any surplus which may result there from. The client shall notethat transfer of funds/securities in favor of a Nominee shall be valid discharge by the stock broker against the legalheir.
21. The stock broker shall bring to the notice of the relevant Exchange the information about default inpayment/delivery and related aspects by a client. In case where defaulting client is a corporate
Page - 8
entity/partnership/proprietary firm or any other artificial legal entity, then the name(s) of Director(s)/Promoter(s)/Partner(s)/Proprietor as the case may be, shall also be communicated by the stock broker to the relevant Exchange(s).
DISPUTE RESOLUTION
22. The stock broker shall provide the client with the relevant contact details of the concerned Exchanges and SEBI.
23. The stock broker shall co-operate in redressing grievances of the client in respect of all transactions routed through
it and in removing objections for bad delivery of shares, rectification of bad delivery, etc.
24. The client and the stock broker shall refer any claims and/or disputes with respect to deposits, margin money, etc., to arbitration as per the Rules, Byelaws and Regulations of the Exchanges where the trade is executed and circulars/notices issued thereunder as may be in force from time to time.
25. The stock broker shall ensure faster settlement of any arbitration proceedings arising out of the transactions
entered into between him vis-à-vis the client and he shall be liable to implement the arbitration awards made in such proceedings.
26. The client/stock-broker understands that the instructions issued by an authorized representative for dispute
resolution, if any, of the client/stock-broker shall be binding on the client/stock-broker in accordance with the letter
authorizing the said representative to deal on behalf of the said client/stock-broker.
TERMINATION OF RELATIONSHIP
27. This relationship between the stock broker and the client shall be terminated; if the stock broker for any reason
ceases to be a member of the stock exchange including cessation of membership by reason of the stock broker's default, death, resignation or expulsion or if the certificate is cancelled by the Board.
28. The stock broker, sub-broker and the client shall be entitled to terminate the relationship between them without
giving any reasons to the other party, after giving notice in writing of not less than one month to the other parties. Notwithstanding any such termination, all rights, liabilities and obligations of the parties arising out of or in respect of transactions entered into prior to the termination of this relationship shall continue to subsist and vest in/be binding on the respective parties or his/its respective heirs, executors, administrators, legal representatives or successors, as the case may be.
29. In the event of demise/insolvency of the sub-broker or the cancellation of his/its registration with the Board
or/withdrawal of recognition of the sub-broker by the stock exchange and/or termination of the agreement with the sub broker by the stock broker, for any reason whatsoever, the client shall be informed of such termination and the client shall be deemed to be the direct client of the stock broker and all clauses in the ‘Rights and Obligations’ document(s) governing the stock broker, sub-broker and client shall continue to be in force as it is, unless the client intimates to the stock broker his/its intention to terminate their relationship by giving a notice in writing of not less than one month.
ADDITIONAL RIGHTS AND OBLIGATIONS
30. The stock broker shall ensure due protection to the client regarding client’s rights to dividends, rights or bonus
shares, etc. in respect of transactions routed through it and it shall not do anything which is likely to harm the interest of the client with whom and for whom they may have had transactions in securities.
31. The stock broker and client shall reconcile and settle their accounts from time to time as per the Rules,
Regulations, Bye Laws, Circulars, Notices and Guidelines issued by SEBI and the relevant Exchanges where the trade is executed.
Page - 9
32. The stock broker shall issue a contract note to his 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 order number, trade number, trade time, trade price, trade quantity, details of the derivatives contract, client code, brokerage, all charges levied etc. and with all other relevant details as required therein to be filled in and issued in such manner and within such time as prescribed by the Exchange. The stock broker shall send contract notes to the investors within one working day of the execution of the trades in hard copy and/or in electronic form using digital signature.
33. The stock broker shall make pay out of funds or delivery of securities, as the case may be, to the Client within one
working day of receipt of the payout from the relevant Exchange where the trade is executed unless otherwise specified by the client and subject to such terms and conditions as may be prescribed by the relevant Exchange from time to time where the trade is executed.
34. The stock broker shall send a complete `Statement of Accounts’ for both funds and securities in respect of each of
its clients in such periodicity and format within such time, as may be prescribed by the relevant Exchange, from time to time, where the trade is executed. The Statement shall also state that the client shall report errors, if any, in the Statement within such time as may be prescribed by the relevant Exchange from time to time where the trade was executed, from the receipt thereof to the Stock broker.
35. The stock broker shall send daily margin statements to the clients. Daily Margin statement should include, inter-
alia, details of collateral deposited, collateral utilized and collateral status (available balance/due from client) with break up in terms of cash, Fixed Deposit Receipts (FDRs), Bank Guarantee and securities.
36. The Client shall ensure that it has the required legal capacity to, and is authorized to, enter into the relationship with
stock broker and is capable of performing his obligations and undertakings hereunder. All actions required to be taken to ensure compliance of all the transactions, which the Client may enter into shall be completed by the Client prior to such transaction being entered into.
ELECTRONIC CONTRACT NOTES (ECN)
37. In case, client opts to receive the contract note in electronic form, he shall provide an appropriate e-mail id to the
stock broker. The client shall communicate to the stock broker any change in the email-id through a physical letter. If the client has opted for internet trading, the request for change of email id may be made through the secured access by way of client specific user id and password.
38. The stock broker shall ensure that all ECNs sent through the e-mail shall be digitally signed, encrypted, non-tamper
able and in compliance with the provisions of the IT Act, 2000. In case, ECN is sent through e-mail as an attachment, the attached file shall also be secured with the digital signature, encrypted and non-tamperable.
39. The client shall note that non-receipt of bounced mail notification by the stock broker shall amount to delivery of the
contract note at the e-mail ID of the client.
40. The stock broker shall retain ECN and acknowledgement of the e-mail in a soft and non-tamperable form in the manner prescribed by the exchange in compliance with the provisions of the IT Act, 2000 and as per the extant rules/regulations/circulars/guidelines issued by SEBI/Stock Exchanges from time to time. The proof of delivery i.e., log report generated by the system at the time of sending the contract notes shall be maintained by the stock broker for the specified period under the extant regulations of SEBI/stock exchanges. The log report shall provide the details of the contract notes that are not delivered to the client/e-mails rejected or bounced back. The stock broker shall take all possible steps to ensure receipt of notification of bounced mails by him at all times within the stipulated time period under the extant regulations of SEBI/stock exchanges.
Page - 10
41. The stock broker shall continue to send contract notes in the physical mode to such clients who do not opt to receive the contract notes in the electronic form. Wherever the ECNs have not been delivered to the client or hasbeen rejected (bouncing of mails) by the e-mail ID of the client, the stock broker shall send a physical contract noteto the client within the stipulated time under the extant regulations of SEBI/stock exchanges and maintain the proofof delivery of such physical contract notes.
42. In addition to the e-mail communication of the ECNs to the client, the stock broker shall simultaneously publish theECN on his designated web-site, if any, in a secured way and enable relevant access to the clients and for thispurpose, shall allot a unique user name and password to the client, with an option to the client to save the contractnote electronically and/or take a print out of the same.
LAW AND JURISDICTION
43. In addition to the specific rights set out in this document, the stock broker, sub-broker and the client shall be entitledto exercise any other rights which the stock broker or the client may have under the Rules, Bye-laws andRegulations of the Exchanges in which the client chooses to trade and circulars/notices issued thereunder or Rulesand Regulations of SEBI.
44. 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 stockexchanges, where the trade is executed, that may be in force from time to time.
45. The stock broker and the client shall abide by any award passed by the Arbitrator(s) under the Arbitration andConciliation Act, 1996. However, there is also a provision of appeal within the stock exchanges, if either party is notsatisfied with the arbitration award.
46. Words and expressions which are used in this document but which are not defined herein shall, unless the contextotherwise requires, have the same meaning as assigned thereto in the Rules, Byelaws and Regulations andcirculars/notices issued thereunder of the Exchanges/SEBI.
47. All additional voluntary clauses/document added by the stock broker should not be in contravention withrules/regulations/notices/circulars of Exchanges/SEBI. Any changes in such voluntary clauses/document(s) need tobe preceded by a notice of 15 days. Any changes in the rights and obligations which are specified byExchanges/SEBI shall also be brought to the notice of the clients.
48. If the rights and obligations of the parties hereto are altered by virtue of change in Rules and regulations of SEBI orBye-laws, Rules and Regulations of the relevant stock Exchanges where the trade is executed, such changes shallbe deemed to have been incorporated herein in modification of the rights and obligations of the parties mentionedin this document.
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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 trading (IBT) and securities trading through the use of wirelesstechnology that shall include the use of devices such as mobile phone, laptop with data card, etc. which useInternet Protocol (IP). The stock broker shall comply with all requirements applicable to internet basedtrading/securities trading using wireless technology as may be specified by SEBI & the Exchanges from time totime.
2. The client is desirous of investing/trading in securities and for this purpose, the client is desirous of using either theinternet based trading facility or the facility for securities trading through use of wireless technology. The Stockbroker shall provide the Stock broker’s IBT Service to the Client, and the Client shall avail of the Stock broker’s IBTService, on and subject to SEBI/Exchanges Provisions and the terms and conditions specified on the Stockbroker’s IBT Web Site provided that they are in line with the norms prescribed by Exchanges/SEBI.
3. The stock broker shall bring to the notice of client the features, risks, responsibilities, obligations and liabilitiesassociated with securities trading through wireless technology/internet/smart order routing or any other technologyshould be brought to the notice of the client by the stock broker.
4. The stock broker shall make the client aware that the Stock Broker’s IBT system itself generates the initialpassword and its password policy as stipulated in line with norms prescribed by Exchanges/SEBI.
5. The Client shall be responsible for keeping the Username and Password confidential and secure and shall besolely responsible for all orders entered and transactions done by any person whosoever through the Stockbroker’s IBT System using the Client’s Username and/or Password whether or not such person was authorized todo so. Also the client is aware that authentication technologies and strict security measures are required for theinternet trading/securities trading through wireless technology through order routed system and undertakes to ensure that the password of the client and/or his authorized representative are not revealed to any third partyincluding employees and dealers of the stock broker
6. The Client shall immediately notify the Stock broker in writing if he forgets his password, discovers security flaw inStock Broker’s IBT System, discovers/suspects discrepancies/ unauthorized access through hisusername/password/account with full details of such unauthorized use, the date, the manner and the transactionseffected pursuant to such unauthorized use, etc.
7. The Client is fully aware of and understands the risks associated with availing of a service for routing orders overthe internet/securities trading through wireless technology and Client shall be fully liable and responsible for anyand all acts done in the Client’s Username/password in any manner whatsoever.
8. The stock broker shall send the order/trade confirmation through email to the client at his request. The client isaware that the order/ trade confirmation is also provided on the web portal. In case client is trading using wirelesstechnology, the stock broker shall send the order/trade confirmation on the device of the client.
9. The client is aware that trading over the internet involves many uncertain factors and complex hardware, software,systems, communication lines, peripherals, etc. are susceptible to interruptions and dislocations. The Stock brokerand the Exchange do not make any representation or warranty that the Stock broker’s IBT Service will be availableto the Client at all times without any interruption.
10. The Client shall not have any claim against the Exchange or the Stock broker on account of any suspension,interruption, non-availability or malfunctioning of the Stock broker’s IBT System or Service or the Exchange’sservice or systems or non-execution of his orders due to any link/system failure at the Client/Stockbrokers/Exchange end for any reason beyond the control of the stock broker/Exchanges.
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Annexure – 4 (i)
PLEASE NOTE THAT IF A CLIENT PLACES AN ORDER WITH NOMURA FINANCIAL
ADVISORY AND SECURITIES (INDIA) PRIVATE LIMITED OR OTHERWISE ENGAGES
IN TRADING WITH NOMURA FINANCIAL ADVISORY AND SECURITIES (INDIA)
PRIVATE LIMITED, THESE ADDITIONAL TERMS AND CONDITIONS CONTAINED
HEREIN IN ADDITION TO THE THE MANDATORY RIGHTS AND OBLIGATIONS OF
STOCK BROKERS, SUB BROKERS AND CLIENTS SHALL BE APPLICABLE In addition to the terms and conditions set out in the mandatory Rights And Obligations of Stock
brokers, Sub brokers and clients, Nomura Financial Advisory and Securities (India) Private Limited
(hereinafter referred as “NFA”) and the Client (as detailed under the Know Your Client Form,
hereinafter referred as “Client”) agrees and undertakes the following and, further, agrees to affix their
respective signatures to this ‘Annexure A’ as a token of their acceptance of the same.
(The Client and NFA shall hereinafter individually be referred to as “Party” and collectively as the
“Parties”.) 1. The Client has understood, appreciated and assumed all the risks associated with purchasing,
selling and trading in various kinds of Securities including derivatives and entering into
various kinds of Securities including derivatives contracts, whether contained in the Risk
Disclosure Statement (as hereinafter defined) or not.
2. Words and expressions in the Terms and Conditions shall have the meanings set out below
unless the context requires otherwise:
“Account” means the account or accounts opened, maintained and operated by the Client with NFA from time to time for use in connection with the purchases, sales, holdings or other
dealings in Securities and other financial products effected through NFA on behalf of the Client, in its capacity as a stock-broker;
“Applicable Law” means any statute, law, Regulation, ordinance, Rule, judgment, order,
decree, Bye-Laws, approval, directive, guideline, policy, requirement or other governmental
restriction or any similar form of decision of, or determination by, or any interpretation or
administrative order having the force of law of any of the foregoing, by any Government
Authority having jurisdiction over the matter in question and includes all the Rules, Bye-
Laws and Regulations of the Exchange and circulars issued thereunder;
“Bye-Laws” means all bye-laws prescribed by SEBI, Exchange, Depositories and other
relevant authorities regulating trading operations on the Exchange or otherwise, and all other
bye-laws made under the relevant laws governing the same;
“Clearing House” means, in relation to an Exchange, any clearing house providing clearing
services for any contract traded through or on the floor of that Exchange;
“Client Registration Form” means the client registration form, containing the details of the
Client, as required by NFA and provided by the Client to NFA for the purpose of opening,
maintaining and operating the Account;
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“Depositories” means the National Securities Depository Limited, Central Depository
Services Limited or any other depository set up under the Depositories Act, 1996;
“Government Authority” means:
(a) central, state, city, municipal or local government, governmental authority or political
subdivision thereof having jurisdiction in India; or
(b) any agency or instrumentality of any of the authorities referred to in sub-clause (a)
above; or
(c) any regulatory or administrative authority, body or other organisation having
jurisdiction, to the extent that the rules, regulations, standards, requirements,
procedures or orders of such authority, body or other organisation have the force of
law in India; or
(d) any court or tribunal having jurisdiction in India;
“Mandatory Provisions” means the mandatory provisions prescribed by SEBI and set out in
the mandatory Rights and Obligations of the Stock brokers, Sub brokers and Clients;
“Margin” shall mean such margin as may be required to be placed with NFA in such form
and in such manner as may be acceptable to NFA, by the Client, or as may be prescribed by
SEBI, or the Exchange, or by NFA for conducting transactions in Securities;
“Nomura Group” means any one or more of subsidiaries, associated companies and
affiliates; of Nomura Holdings, Inc., a company incorporated in Japan;
“Regulations” means all regulations prescribed by SEBI, Exchange, Depositories, Reserve
Bank of India and other relevant Government Authority, regulating any of the services to be
provided hereunder from time to time;
“Risk Disclosure Statement” means the incomprehensive document explaining certain risks
associated with purchasing, selling and trading in various kinds of Securities including
derivatives and entering into various kinds of Securities transactions including derivatives
contracts;
“Rules” means all rules prescribed by the Clearing House, SEBI, Exchange, Depositories,
Reserve Bank of India and other relevant authorities, regulation any of the services to be
provided hereunder from time to time, trading operations of the Exchange or otherwise, and
any other Applicable Law;
“Security” or “Securities” means all kinds of securities permitted under Applicable Law,
including but not limited to:
(a) “securities” as defined under the Securities Contracts (Regulation) Act, 1956;
(b) shares, stocks (excluding penny stocks), warrants, options, bonds, debentures, notes, ,
fully and partly paid allotment letters, and can for the purpose of the Terms and
Conditions include foreign exchange and financial futures, whatsoever and
howsoever issued, quoted, dealt in or located; and
(c) any other instruments or investments as may be permitted by Applicable Law from
time to time;
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“Terms and Conditions” means the terms entered between the Parties, which comprises of
the mandatory Rights and Obligations of the Stock brokers, Sub brokers and clients, together
with any annexures, the Client Registration Form, the Risk Disclosure Document, Know Your
Client Form each as amended in writing from time to time, in accordance with the terms and
conditions set forth herein;
“Voluntary Provisions” means the provisions contained in this “Annexure A”, which shall
be executed by the Parties hereto.
3. INSTRUCTIONS AND TRANSACTIONS
3.1 The Client hereby authorises NFA, in NFA’s absolute discretion:
(a) to open and maintain in NFA’s books the Account and at any time hereafter to open
and maintain in NFA’s books additional Account(s) in the name(s) of the Client as
the Client from time to time directs, in each case for the purpose of purchasing,
investing in, holding, selling, exchanging or otherwise disposing of, and generally
dealing in and with any and all kinds of Securities;
(b) to operate such Account in accordance with the oral or written instructions of the
Client or to the extent authorised by the Client orally or in writing provided always
that NFA shall have the absolute discretion to accept or reject such instructions.
Instructions shall include, but shall not be limited to, instructions sent by facsimile
transmission or telex (whether tested or untested);
(c) to credit the proceeds of any sale of any Securities made on behalf of the Client to the
Account unless the Client gives NFA instructions to the contrary.
3.2 NFA shall not accept instructions unless given by an authorised representative of the Client, a
list of which would be provided to NFA by the Client upon request. Until NFA is notified to
the contrary, NFA shall be entitled to assume that any of those persons have full and
unrestricted power to give NFA instructions on the Client’s behalf. NFA may act on any
instruction which purports to come from, and which NFA believes to have come from, any such authorised representative without further enquiry as to the genuineness, authority or
identity of the person giving or purporting to give such instructions on the Client’s behalf.
3.3 Instructions, once given, may only be cancelled, withdrawn or amended to the extent NFA
has not acted upon/executed those instructions.
3.4 NFA shall have the right (in its absolute discretion and without assigning any reason thereof)
to refuse to act for the Client in any particular transaction.
3.5 The Client acknowledges that all telephone conversations between NFA and the Client made
in the course of business may be recorded on a centralised tape recording system operated by
NFA. The Client agrees that such telephonic recordings shall be the sole property of NFA and
may be used as evidence in any proceedings brought in connection with the Terms and
Conditions.
4. SETTLEMENT
4.1 All transactions are undertaken with the object of actual settlement. Subject to the terms
hereof, NFA and the Client shall make settlement of each purchase or sale by making
payment and/or delivery of the subject Securities by the due settlement date and in the manner
required to settle transactions on the Exchange (or as otherwise agreed) and in accordance
with the relevant Rules, Bye-Laws and Regulations.
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4.2 If NFA shall for any reason whatsoever and howsoever fails to receive payment of all or any
part of any amount due to be paid to it by the Client or fail to receive delivery of any
Securities (whether from the relevant Exchange, Clearing House, and/or any other person)
due to be delivered to the Client in respect of any sale or purchase entered into by NFA, on
behalf of the Client on the due date for payment or delivery thereof, the same shall be
governed by the policy and procedures framed by NFA in connection with the same.
4.3 In case of the sale of any Securities by NFA at the Client’s direction and NFA’s inability to
deliver the same to the purchaser by reason of the Client’s failure to supply NFA with
evidence of valid title to such Securities, then the Client accepts complete liability for any
premiums which NFA may be required to pay, and for any costs, charges, loss, damages or
other liability whatsoever which NFA may sustain or incur by reason of NFA’s inability to
deliver the Securities in question. NFA shall have no obligation to verify the validity of any
documents of title to Securities delivered to it by the Client.
4.4 In respect of any transactions NFA carries out for the Client, NFA agrees to provide the
Client with a contract note in the form specified by the relevant Exchange giving details of
such transaction, including details of any charges due to NFA and charges and/or taxes and/or
duties payable by the Client.
5. SECURITY AND RIGHT OVER ACCOUNT
5.1 All monies, Securities or other property which the Client may have in the Account shall be
subject to a general lien for discharge of the Client’s obligations under the Terms and
Conditions and Applicable Law.
5.2 Upon a default by the Client and on giving prior notice to the Client where practicable, NFA
shall have the right to sell such Securities or property (and NFA is hereby authorised to do all
such things it considers necessary or desirable in connection with such sale) and to utilise the
proceeds and any other available funds of the Client to enforce its right of general lien.
5.3 Notwithstanding anything contained in the Terms and Conditions but subject to Applicable
Law, NFA shall be entitled to set off against any amount payable by it, pursuant to the Terms
and Conditions, any amounts owing and/or any liability present or future, actual or contingent,
several or joint, primary or collateral, or of whatever nature by the Client to NFA whatsoever
(whether or not such amounts are due and payable and irrespective of the currency in which
such amounts are denominated).
6. CLOSING OUT AND EVENT OF DEFAULT
In the event NFA purchases and/or sells Securities on more than one Exchange pursuant to
instructions of the Client, the Client hereby authorises NFA to set off the outstanding in the
Client’s Account maintained by NFA in respect of another Exchange.
7. MARGIN AND EXPOSURE LIMITS
7.1 The Client is liable to pay an initial Margin up-front on or before creating a position in any
Security. Furthermore the Client is liable to pay (or receive) daily/intra-day Margins
depending upon whether the price of the Security moves for or against the position undertaken.
7.2 NFA may, in its absolute discretion, refuse to accept a particular form of Margin from the
Client.
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7.3 NFA shall not be obliged to return any Margin to the Client until the Client has satisfactorily
discharged all its payment obligations or other obligations under the Terms and Conditions
and/or Applicable Law.
7.4 NFA shall not be liable to pay any amounts to the Client, whether in the form of interest or
otherwise in relation to the Margin placed.
7.5 In the event that Securities have been placed as Margin with NFA, all corporate benefits
accruing to such Securities shall form part of the Margin. In the case of discretionary
corporate benefits including without limitation, rights shares, convertible shares, the Client
shall inform NFA prior to the relevant record date and replace the said Securities with such
other Securities as may be approved and accepted by NFA at least 10 days prior to the
relevant record date or within such other period as may be acceptable to NFA. However, in
the event that the Client fails to do so, NFA shall have the discretion either to liquidate such
Securities and replace the Margin, or to not avail such corporate benefits. In the event that
NFA decides not to avail any such corporate benefit(s) accruing on the Securities transferred
by the Client to NFA as Margin, the Client agrees that NFA shall not be liable for the same in
any manner, and that the Client shall have no recourse against NFA in relation thereto.
7.6 NFA may, at its discretion, prescribe the payment of Margin in the form of cash instead of
Securities or other instruments. The Client agrees to comply with NFA’s requirement of payment of Margin in the form of cash, immediately failing which, NFA may sell, dispose,
transfer or deal in any other manner with the Securities already placed with NFA as Margin or
square off all or some of the positions of the Client either entirely or partially as NFA may
deem fit in its discretion without any notice to the Client and any resultant or associated
losses that may occur due to such square off or sale shall be borne by the Client.
7.7 All Margin placed by the Client may be invoked or utilised by NFA in such circumstances as may be permitted by the Exchange and/or by Regulations, Rules, Bye-laws or circulars. In
addition to the above, all Margin may be appropriated or utilised in the event of any default by the Client whether pursuant to the Terms and Conditions or otherwise and/or to set off
against any liability of the Client to NFA or otherwise.
8. CONFLICT OF INTEREST
The Client hereby agrees and acknowledges that apart from providing the Services to the
Client pursuant to the Terms and Conditions, NFA may from time to time be engaged in
activities including: (i) proprietary trading for its own account and on behalf of other entitiesin the Nomura Group; and (ii) trades for other clients of NFA.
9. CONFIDENTIALITY
9.1 Whilst the Client expects NFA to keep confidential all matters relating to the Client, including
personal data of the Client, information of the Account and information in NFA’s possession,
the Client hereby expressly agrees that NFA may disclose and transfer, whether during the
continuance or after the termination of the Terms and Conditions and without notice to the
Client, any such information to:
(a) any company in the Nomura Group or any other company or delegates and agents of
such companies retained by NFA to enable NFA to provide the services contemplated
herein; or
(b) any assignee or sub-contractor of any of NFA’s rights or obligations under the Terms
and Conditions; or
Page - 17
(c) any Government Authority, including the Exchanges and SEBI pursuant to their
requirements or as otherwise required by any Applicable Law, any investigation or
enquiry it is undertaking, or as necessary to establish NFA’s rights hereunder.
9.2 The Client agrees and acknowledges that NFA and/or any company in the Nomura Group
may transfer any or all of the Client’s personal data and other information to any other party
or entity set out herein, which are located outside of India for the purposes set out above and
that such party or entity may collect, hold, process and use such data and information
accordingly.
9.3 Subject to the terms hereof, NFA and the Client agree to maintain secrecy in all mutual
dealings and shall not disclose information relating to the affairs of the other or details of
investments made, except to their respective directors, officers, employees or parties as
mentioned in sub – clauses 9.1 (a) to (c) above on a need-to-know basis, and in exercise of its
duties hereunder or where required to comply with legal obligations and requirements. NFA
and the Client further agree not to make unfair use of information for personal benefit, or the
benefit of any party as mentioned in sub – clauses 9.1 (a) to (c) above. Any material deviation
from the above shall give the other Party the right to terminate all further dealings with the
Party in breach of this confidentiality obligation and also the right to pursue legal action.
10. NOTICES AND COMMUNICATION
10.1 Without prejudice to any other effective mode of despatch, any reports, written confirmation,
notice, demand or any other communication from NFA to the Client (who, in the case of a
joint account where none of the persons named has been designated for the purposes of
receiving notices, will be deemed for these purposes to be the person whose name first
appears in the Know Your Client Form) shall be deemed to have been sufficiently despatched,
given or made if:
(a) left by personal delivery addressed to the Client, at the address last known to NFA at
the time of delivery;
(b) by prepaid post similarly addressed, five days after posting; and
(c) communicated or transmitted to the Client by telephone, telex, cable, or facsimile
transmission, at the respective numbers last known to NFA at the time of
communication/transmission (with confirmed answer back in the case of telex).
10.2 Any communication from the Client to NFA shall only be effective upon actual receipt
thereof by NFA.
10.3 Without prejudice to the foregoing, the Client acknowledges that NFA is entitled but not
obliged to insist on any verbal instructions given by or purportedly given by or for and on
behalf of the Client being confirmed by the Client in writing, but the Client shall always be
bound by such verbal instructions.
10.4 All notices and other communication sent by NFA to the Client or vice versa are to be sent at
the Client’s risk, and NFA does not assume any responsibility for any inaccuracy, interruption,
error or delay or total failure in transmission or delivery by post, telegraph, cable, telephone,
telex or other form of electronic communication or other cause beyond the control or
anticipation of NFA.
11. REPRESENTATIONS AND WARRANTIES
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11.1 The Client hereby represents warrants and covenants to NFA that the Client has read,
understood, appreciated and signed the Risk Disclosure Statement and represents, warrants
and covenants to NFA as follows:
(a) the Client shall be wholly responsible for all investment decisions and trades of the
Client;
(b) the Client will pay or receive applicable Margins;
(c) payment of Margins by the Client does not necessarily imply complete satisfaction of
all of its obligations and liabilities;
(d) in spite of consistently having paid Margins, the Client may, on the closing of its
trade, be obliged to pay (or entitled to receive) such further sums as the market price
of an instrument or contract may dictate;
(e) the failure of a Client to understand the risk involved shall not render a contract void
or voidable and the Client shall be and shall continue to be responsible for all the
risks and consequences for entering into trades in the Securities;
(f) the Client shall give written notice to NFA of any litigation, arbitration or proceeding
in which it is named as a defendant if an adverse outcome from such litigation,
arbitration or proceeding would have a material adverse impact on the Client’s ability
to perform its obligations and the transactions contemplated under the Terms and
Conditions;
(g) the Client shall give immediate written notice to NFA of the appointment of a trustee,
receiver or liquidator for all or substantially all of the Client’s assets or property; and
(h) the Client shall give immediate written notice to NFA of the filing of any voluntary or
involuntary bankruptcy or winding-up petition made by or against the Client or on its
behalf.
11.2 On a continuing basis, each Party represents and warrants to and for the benefit of the other
that:
(a) it is duly organised and validly existing under the laws of the country of its
incorporation;
(b) it has the power to execute and deliver the Terms and Conditions and to perform its
obligations under the Terms and Conditions and has taken all actions necessary to authorise such execution and delivery and performance of such obligations;
(c) the execution and delivery of the Terms and Conditions by it and the performance of
its obligations thereunder do not violate or conflict with any law, rule or regulation
applicable to it, any provisions of its certificate of incorporation and bye-laws or
similar constitutional documents, any judgment of any court or other agency of
government applicable to it or any of its assets or any contractual restriction binding
on or affecting it or any of its assets;
(d) all authorisations of, exemptions, actions, approvals by, and all notices to or filings
with, SEBI or any other Government Authority that are necessary to enable it to enter
into and perform its obligations under the Terms and Conditions have been obtained
or made and are in full force and effect and all conditions of any such authorisations,
exemptions, actions or approvals have been complied with; and
Page - 19
(e) the Terms and Conditions constitutes a legal, valid and binding obligation
enforceable in accordance with its terms (subject to applicable bankruptcy,
reorganisation, insolvency, moratorium or similar Applicable Law affecting creditors
rights generally and subject, as to enforceability, to the principle that the availability
of equitable remedies is subject to the discretion of the court before which any
proceeding for such remedies may be brought).
12. LIABILITY AND INDEMNITY
12.1 In the absence of bad faith on the part of NFA, its directors, officers, employees or agents
(collectively referred to as “NFA” for the purpose of this clause), the Client agrees NFA shall
not be liable for any direct or indirect losses, damages, costs or expenses incurred or suffered
by the Client or any third party unless arising directly from the gross negligence, wilful
default or fraud of NFA. In no circumstance shall NFA be liable for any incidental,
consequential or special damages or for loss of profits or opportunity.
12.2 The Client shall pay to NFA such sums as NFA may, from time to time, require in or towards
satisfaction of any debit balance on any of the Client’s Accounts with NFA and the Client
further agrees to and shall indemnify NFA, on a full indemnity basis, against any and all
losses, liabilities, costs or expenses (including legal fees), taxes imposed or levied, resulting
from any act, omission, representation, warranty, undertaking or instruction of the Client:
(a) arising (i) out of or in connection with the performance of NFA’s obligations or
discretions under the Terms and Conditions; (ii) otherwise in connection with the
Terms and Conditions; (iii) under Applicable Law; or (iv) out of a breach by the
Client of any provision of under the Terms and Conditions and/or Applicable Law;
or
(b) which NFA may incur or be subjected to with respect to any of the Client’s Account(s)
or any Securities including derivatives contracts or any matching Securities including
derivatives contracts on an Exchange or with an intermediate broker or agent or as a
result of the termination or transfer of the Client’s position.
12.3 The Client agrees and acknowledges that NFA hereby specifically disclaims any assurance or
guarantee of the performance of any investment.
13. FORCE MAJEURE
13.1 Neither NFA nor the Client shall be liable to the other Party for any delay or failure to
perform caused by an event or occurrence of Force Majeure. “Force Majeure” means any
cause or circumstance outside the reasonable control of a Party seeking the protection of this clause including, but not limited to, failure of telecommunication or computer facilities,
hostilities, revolution, terrorism, war, civil commotion, strike, epidemic, accident, fire, lightning,
flood, storm, earthquake (and any other acts of God), explosion, blockade or embargo, or any
law, proclamation, regulation or ordinance, demand, act or requirement of any government
or Government Authority having or claiming to have jurisdiction over the subject matter of the
Terms and Conditions or over the Parties to the Terms and Conditions. The Party whose
performance is affected by an event of Force Majeure shall promptly notify the other Party of
the existence and cessation of such event. The Parties shall take all reasonable steps
within their power to recommence performance of the Terms and Conditions following an
event of Force Majeure.
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14. TERMINATION
14.1
Termination of the Terms and Conditions (howsoever occasioned) shall not affect
any
accrued rights or liabilities of either NFA or the Client up to the date of termination nor shall it affect the coming into force or the continuance in force of any provision of the Terms and Conditions which are expressly or by implication intended to come into force on or after that
termination, including any indemnities given by the Client under the Terms and Conditions
which shall expressly survive upon such termination.
14.2 NFA may at any time, as it considers necessary in its absolute discretion and without prior
notice to the Client, restrict or suspend the provision of services provided to the Client under
the Terms and Conditions, whether in part or in its entirety.
15. CHANGES
15.1 The Client expressly agrees that NFA may amend the terms of the Terms and Conditions in
order to comply with changes in Applicable Law by sending the Client a written notice
describing the relevant changes 15 days prior to incorporating such change. Such changes
will become effective on a date to be specified in the notice or such other date as required by
the Applicable Law.
15.2 Any other amendment will only become effective when both Parties agree in writing.
16. TIME OF THE ESSENCE
The Client agrees that time shall be of essence in respect of its responsibilities and liabilities
in all matters arising under the Terms and Conditions.
17. NON-ASSIGNABILITY
17.1 The Client shall not be entitled to assign, delegate, transfer or otherwise dispose of any of its
rights or obligations in accordance with the terms of the Terms and Conditions, or the
performance thereof, to any person, firm or company without the prior written consent of
NFA in its absolute discretion.
17.2 NFA shall, after prior written notice to the Client, have the right to assign, transfer or
otherwise dispose of all or any interest in its rights under the Terms and Conditions to any
person, firm or company and to delegate and sub-contract the performance of its obligations
thereunder as NFA thinks fit in its absolute discretion.
18. SEVERANCE
Any term, stipulation or undertaking in the Terms and Conditions which is declared by any
court or tribunal of competent jurisdiction to be illegal, invalid or unenforceable shall, to the
maximum extent permitted by applicable law, be severed from the Terms and Conditions
without affecting the remaining provisions of the Terms and Conditions, which shall remain
fully effective.
19. RISK DISCLOSURE
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The Client agrees that the decisions regarding the trading of Securities are made by the Client
at the Client’s sole discretion and risk and without reliance on any advice from NFA;
20. DISPUTE RESOLUTION
20.1 NFA and the Client are aware of the provisions of the Bye-Laws, Rules and Regulations of
the Exchange relating to the resolution of the disputes/ differences through the mechanism of
arbitration provided by the Exchange and agree to abide by the said provisions in so far as any
disputes under these terms relate to the transactions that are to be carried out on the
Exchanges in NFA’s capacity as a stock broker.
20.2 Other than claims and/or disputes which are subject to the Bye-Laws, Rules and/or
Regulations of the Exchange on which the trades have been executed, any and all claims and
disputes arising out of or in connection with the validity, interpretation, termination,
implementation or alleged breach of any provision of the Terms and Conditions and/or all
matters relating to non-contractual claims in relation to the Terms and Conditions, shall be
settled by arbitration by a sole arbitrator to be appointed jointly by NFA and the Client. The
arbitration shall be governed by the provisions of the Arbitration and Conciliation Act, 1996.
21. GOVERNING LAW
21.1 All transactions under the Terms and Conditions shall be subject to Applicable Laws.
21.2 The Terms and Conditions and all rights, obligations and liabilities hereunder shall be
governed by, construed and enforced in accordance with Indian laws and the Client submits to
the non-exclusive jurisdiction of the courts of Mumbai.
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Annexure – 5
RISK DISCLOSURE DOCUMENT FOR CAPITAL MARKET AND DERIVATIVES SEGMENTS
This document contains important information on trading in Equities/Derivatives Segments of the stock exchanges. All prospective constituents should read this document before 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, which may inter alia include your filling the know your client form, reading the rights and obligations, do’s and don’ts, etc., and are subject to the Rules, Byelaws and Regulations of relevant Stock exchanges, its Clearing Corporation, 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.
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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 / derivatives contracts as compared to active securities / derivatives contracts. As a result, your order may only be partially executed, or may be executed with relatively greater price difference or may not be executed at all.
1.2.1 Buying or selling securities / derivatives contracts as part of a day trading strategy may also result into losses, because in such a situation, securities / derivatives contracts may have to be sold / purchased at low / high prices, compared to the expected price levels, so as not to have any open position or obligation to deliver or receive a security / derivatives contract.
1.3 Risk of Wider Spreads:
Spread refers to the difference in best buy price and best sell price. It represents the differential between the price of buying a security / derivatives contract and immediately selling it or vice versa. Lower liquidity and higher volatility may result in wider than normal spreads for less liquid or illiquid securities / derivatives contracts. This in turn will hamper better price formation.
1.4 Risk-reducing orders: The placing of orders (e.g., "stop loss” orders, or "limit" orders) which are intended to limit losses to certain amounts may not be effective many a time because rapid movement in market conditions may make it impossible to execute such orders.
1.4.1 A "market" order will be executed promptly, subject to availability of orders on opposite side, without regard to price and that, while the customer may receive a prompt execution of a "market" order, the execution may be at available prices of outstanding orders, which satisfy the order quantity, on price time priority. It may be understood that these prices may be significantly different from the last traded price or the best price in that security / derivatives contract.
1.4.2 A "limit" order will be executed only at the "limit" price specified for the order or a better price. However, while the customer receives price protection, there is a possibility that the order may not be executed at all.
1.4.3 A stop loss order is generally placed "away" from the current price of a stock / derivatives contract, and such order gets activated if and when the security / derivatives contract reaches, or trades through, the stop price. Sell stop orders are entered ordinarily below the current price, and buy stop orders are entered ordinarily above the current price. When the security / derivatives contract reaches the pre -determined price, or trades through such price, the stop loss order converts to a market/limit order and is executed at the limit or better. There is no assurance therefore that the limit order will be executable since a security / derivatives contract might penetrate the pre-determined price, in which case, the risk of such order not getting executed arises, just as with a regular limit order.
1.5 Risk of News Announcements: News announcements that may impact the price of stock / derivatives contract may occur during trading, and when combined with lower liquidity and higher volatility, may suddenly cause an unexpected positive or negative movement in the price of the security / contract.
1.6 Risk of Rumors: Rumors about companies / currencies at times float in the market through word of mouth, newspapers, websites or news agencies, etc. The investors should be wary of and should desist from acting on rumors.
1.7 System Risk: High volume trading will frequently occur at the market opening and before market close. Such high volumes may also occur at any point in the day. These may cause delays in order execution or confirmation.
1.7.1 During periods of volatility, on account of market participants continuously modifying their order quantity or prices or placing fresh orders, there may be delays in order execution and its confirmations.
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1.7.2 Under certain market conditions, it may be difficult or impossible to liquidate a position in the market at a reasonable price or at all, when there are no outstanding orders either on the buy side or the sell side, or if trading is halted in a security / derivatives contract due to any action on account of unusual trading activity or security / derivatives contract hitting circuit filters or for any other reason.
1.8 System/Network Congestion: Trading on exchanges is in electronic mode, based on satellite/leased line based communications, combination of technologies and computer systems to place and route orders. Thus, there exists a possibility of communication failure or system problems or slow or delayed response from system or trading halt, or any such other problem/glitch whereby not being able to establish access to the trading system/network, which may be beyond control and may result in delay in processing or not processing buy or sell orders either in part or in full. You are cautioned to note that although these problems may be temporary in nature, but when you have outstanding open positions or unexecuted orders, these represent a risk because of your obligations to settle all executed transactions.
2. As far as Derivatives segments are concerned, please note and get yourself acquainted with the following additional features:-
2.1 Effect of "Leverage" or "Gearing": In the derivatives market, the amount of margin is small relative to the value of the derivatives contract so the transactions are 'leveraged' or 'geared'. Derivatives trading, which is conducted with a relatively small amount of margin, provides the possibility of great profit or loss in comparison with the margin amount. But transactions in derivatives carry a high degree of risk.
You should therefore completely understand the following statements before actually trading in derivatives and also trade with caution while taking into account one's circumstances, financial resources, etc. If the prices move against you, you may lose a part of or whole margin amount in a relatively short period of time. Moreover, the loss may exceed the original margin amount.
A. Futures trading involve daily settlement of all positions. Every day the open positions are marked to market based on the closing level of the index / derivatives contract. If the contract has moved against you, you will be required to deposit the amount of loss (notional) resulting from such movement. This amount will have to be paid within a stipulated time frame, generally before commencement of trading on next day.
B. If you fail to deposit the additional amount by the deadline or if an outstanding debt occurs in your account, the stock broker may liquidate a part of or the whole position or substitute securities. In this case, you will be liable for any losses incurred due to such close-outs.
C. Under certain market conditions, an investor may find it difficult or impossible to execute transactions. For example, this situation can occur due to factors such as illiquidity i.e. when there are insufficient bids or offers or suspension of trading due to price limit or circuit breakers etc.
D. In order to maintain market stability, the following steps may be adopted: changes in the margin rate, increases in the cash margin rate or others. These new measures may also be applied to the existing open interests. In such conditions, you will be required to put up additional margins or reduce your positions.
E. You must ask your broker to provide the full details of derivatives contracts you plan to trade i.e. the contract specifications and the associated obligations.
2.2 Currency specific risks: 1. The profit or loss in transactions in foreign currency-denominated contracts, whether they are traded in your own or another jurisdiction, will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currency.
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2. Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for examplewhen a currency is deregulated or fixed trading bands are widened.
3. Currency prices are highly volatile. Price movements for currencies are influenced by, among other things: changingsupply-demand relationships; trade, fiscal, monetary, exchange control programs and policies of governments; foreign political and economic events and policies; changes in national and international interest rates and inflation; currency devaluation; and sentiment of the market place. None of these factors can be controlled by any individual advisor and no assurance can be given that an advisor's advice will result in profitable trades for a participating customer or that a customer will not incur losses from such events.
2.3 Risk of Option holders: 1. An option holder runs the risk of losing the entire amount paid for the option in a relatively short period of time. This riskreflects the nature of an option as a wasting asset which becomes worthless when it expires. An option holder who neither sells his option in the secondary market nor exercises it prior to its expiration will necessarily lose his entire investment in the option. If the price of the underlying does not change in the anticipated direction before the option expires, to an extent sufficient to cover the cost of the option, the investor may lose all or a significant part of his investment in the option.
2. The Exchanges may impose exercise restrictions and have absolute authority to restrict the exercise of options at certaintimes in specified circumstances.
2.4 Risks of Option Writers: 1. If the price movement of the underlying is not in the anticipated direction, the option writer runs the risks of losingsubstantial amount. 2. The risk of being an option writer may be reduced by the purchase of other options on the same underlying interest andthereby 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 withbuying 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.
3. TRADING THROUGH WIRELESS TECHNOLOGY/ SMART ORDER ROUTING OR ANY OTHER TECHNOLOGY:
Any additional provisions defining the features, risks, responsibilities, obligations and liabilities associated with securities trading through wireless technology/ smart order routing or any other technology should be brought to the notice of the client by the stock broker.
4. GENERAL
4.1 The term ‘constituent’ shall mean and include a client, a customer or an investor, who deals with a stock broker for the purpose of acquiring and/or selling of securities / derivatives contracts through the mechanism provided by the Exchanges.
4.2 The term ‘stock broker’ shall mean and include a stock broker, a broker or a stock broker, who has been admitted as such by the Exchanges and who holds a registration certificate from SEBI.
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Annexure-6
GUIDANCE NOTE - DO’s AND DON’Ts FOR TRADING ON THE EXCHANGE(S) FOR INVESTORS
BEFORE YOU BEGIN TO TRADE
1. Ensure that you deal with and through only SEBI registered intermediaries. You may check their SEBI registration
certificate number from the list available on the Stock exchanges www.exchange.com and SEBI website www.sebi.gov.in.
2. Ensure that you fill the KYC form completely and strike off the blank fields in the KYC form.
3. Ensure that you have read all the mandatory documents viz. Rights and Obligations, Risk Disclosure Document, Policy
and Procedure document of the stock broker.
4. Ensure to read, understand and then sign the voluntary clauses, if any, agreed between you and the stock broker. Note
that the clauses as agreed between you and the stock broker cannot be changed without your consent.
5. Get a clear idea about all brokerage, commissions, fees and other charges levied by the broker on you for trading and the
relevant provisions/ guidelines specified by SEBI/Stock exchanges.
6. Obtain a copy of all the documents executed by you from the stock broker free of charge.
7. In case you wish to execute Power of Attorney (POA) in favour of the Stock broker, authorizing it to operate your bank and
demat account, please refer to the guidelines issued by SEBI/Exchanges in this regard.
TRANSACTIONS AND SETTLEMENTS
8. The stock broker may issue electronic contract notes (ECN) if specifically authorized by you in writing. You should
provide your email id to the stock broker for the same. Don’t opt for ECN if you are not familiar with computers.
9. Don’t share your internet trading account’s password with anyone.
10. Don’t make any payment in cash to the stock broker.
11. Make the payments by account payee cheque in favour of the stock broker. Don’t issue cheques in the name of sub-
broker. Ensure that you have a documentary proof of your payment/deposit of securities with the stock broker, stating
date, scrip, quantity, towards which bank/ demat account such money or securities deposited and from which bank/ demat
account.
12. Note that facility of Trade Verification is available on stock exchanges’ websites, where details of trade as mentioned in
the contract note may be verified. Where trade details on the website do not tally with the details mentioned in the contract
note, immediately get in touch with the Investors Grievance Cell of the relevant Stock exchange.
13. In case you have given specific authorization for maintaining running account, payout of funds or delivery of securities (as
the case may be), may not be made to you within one working day from the receipt of payout from the Exchange. Thus,
the stock broker shall maintain running account for you subject to the following conditions:
a) Such authorization from you shall be dated, signed by you only and contains the clause that you may revoke the
same at any time.
b) The actual settlement of funds and securities shall be done by the stock broker, at least once in a calendar quarter or
month, depending on your preference. While settling the account, the stock broker shall send to you a ‘statement of
accounts’ containing an extract from the client ledger for funds and an extract from the register of securities displaying
all the receipts/deliveries of funds and securities. The statement shall also explain the retention of funds and
securities and the details of the pledged shares, if any.
c) On the date of settlement, the stock broker may retain the requisite securities/funds towards outstanding obligations
and may also retain the funds expected to be required to meet derivatives margin obligations for next 5 trading days,
calculated in the manner specified by the exchanges. In respect of cash market transactions, the stock broker may
retain entire pay-in obligation of funds and securities due from clients as on date of settlement and for next day’s
business, he may retain funds/securities/margin to the extent of value of transactions executed on the day of such
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settlement in the cash market.
d) You need to bring any dispute arising from the statement of account or settlement so made to the notice of the stock
broker in writing preferably within 7 (seven) working days from the date of receipt of funds/securities or statement, as
the case may be. In case of dispute, refer the matter in writing to the Investors Grievance Cell of the relevant Stock
exchanges without delay.
14. In case you have not opted for maintaining running account and pay-out of funds/securities is not received on the next
working day of the receipt of payout from the exchanges, please refer the matter to the stock broker. In case there is
dispute, ensure that you lodge a complaint in writing immediately with the Investors Grievance Cell of the relevant Stock
exchange.
15. Please register your mobile number and email id with the stock broker, to receive trade confirmation alerts/ details of the
transactions through SMS or email, by the end of the trading day, from the stock exchanges.
IN CASE OF TERMINATION OF TRADING MEMBERSHIP
16. In case, a stock broker surrenders his membership, is expelled from membership or declared a defaulter; Stock
exchanges gives a public notice inviting claims relating to only the "transactions executed on the trading system" of Stock
exchange, from the investors. Ensure that you lodge a claim with the relevant Stock exchanges within the stipulated period
and with the supporting documents.
17. Familiarize yourself with the protection accorded to the money and/or securities you may deposit with your stock broker,
particularly in the event of a default or the stock broker’s insolvency or bankruptcy and the extent to which you may
recover such money and/or securities may be governed by the Bye-laws and Regulations of the relevant Stock exchange
where the trade was executed and the scheme of the Investors’ Protection Fund in force from time to time.
DISPUTES/ COMPLAINTS
18. Please note that the details of the arbitration proceedings, penal action against the brokers and investor complaints
against the stock brokers are displayed on the website of the relevant Stock exchange.
19. In case your issue/problem/grievance is not being sorted out by concerned stock broker/sub-broker then you may take up
the matter with the concerned Stock exchange. If you are not satisfied with the resolution of your complaint then you can
escalate the matter to SEBI.
20. Note that all the stock broker/sub-brokers have been mandated by SEBI to designate an e-mail ID of the grievance
redressal division/compliance officer exclusively for the purpose of registering complaints.
STRICTLY PRIVATE AND CONFIDENTIAL
Copyright © 2017 Nomura
This document is the sole property of Nomura. No part of this document may be reproduced in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the prior written permission of Nomura.
Disclosure of Policies and Procedures to Clients Nomura Financial Advisory and Securities (India) Private Limited
Sections
1. Policy for Penny Stock / Securities........................................................................................................ 1
2. Setting up client’s exposure limits ......................................................................................................... 2
3. Policy on Brokerage Rate and Other Charges ...................................................................................... 3
4. Imposition of penalty / delayed payment charges ................................................................................. 3
5. Liquidation Policy .................................................................................................................................. 4
6. Shortages in obligations arising out of internal netting of trades .......................................................... 4
7. Conditions under which a client may not be allowed to take further position or the broker may closethe existing position of a client .............................................................................................................. 5
8. Temporarily suspending or closing a client’s account at the client’s request ....................................... 5
9. De-registering a client ........................................................................................................................... 6
10. In-active Client account ......................................................................................................................... 7
11. Copies of Documents ............................................................................................................................ 7
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“Annexure – 7”
This document is issued pursuant to Nomura Financial Advisory and Securities (India) Private Limited’s (the “Company” or “Member” or “Stock Broker”) registration with Securities and Exchange Board of India (SEBI) as a stock broker with National Stock Exchange of India Limited (for Cash, F&O and Currency segment), BSE Limited (for Cash segment and Currency Segment) and Metropolitan Stock Exchange Of India Ltd. (for Currency segment) (collectively and / or individually referred as “Exchange”)
(Disclosures pursuant to SEBI Circular bearing Reference No. MIRSTD/SE/CIR-19/2009 dated 3-12-2009)
The underlying document outlines various policies and procedures the Company has framed with respect to its dealing with clients for capital market transactions to ensure transparency and facilitate understanding on various aspects related to service delivery.
Kindly note that the below stated policies and procedures are subject to change from time to time, depending upon our internal risk management framework, market and external environment and will be updated on the Nomura website.
1. Policy for Penny Stock / Securities
A Security that trades at a relatively low price (generally such securities are trading below face value of the security) and has small market capitalization is a penny stock. These types of stocks are generally considered to be highly speculative & high risk because of their lack of liquidity, large bid-ask spreads, small capitalization and limited following and disclosure.
The Company recommends that its clients desist from trading in any penny stocks in view of the associated risk element while dealing in such stocks. Further, the client is also required to adhere to Exchange/ Members' guidelines and due diligence while trading in such stocks. Also SEBI / Exchange from time to time issues directives necessitating additional due diligence for dealing in such stock(s).
Depending on the market condition, applicable regulatory guidelines and applicable risk policy of the Company, the Company at its sole discretion, may impose certain restrictions and/ or conditions (on case to case basis) including but not limited to refusal, wholly or partly, for trading in penny stocks.
These restrictions/ conditions include but are not limited to the following -
Restrictions on trading, either wholly or partly, in certain security(ies) or category ofsecurity(ies) contracts viz. illiquid stocks / stocks having low liquidity, illiquid options / far month options / long dated options, writing of options, securities listed in Z, T, TS, S, B group or 6 lakh series available for institutional
category on BSE and/or securities listed in BE, IL, BT or EQ series on NSE, any other securities/ contracts which as per the perception of the Company are volatile
or subject to market manipulation or has concentration risk at client level or at the Company level,
acceptance or partial acceptance of an order for buy and/or sell. Such acceptance mayrequire execution in a controlled environment (e.g. from centralised desk instead of fromdesignated dealing area or electronic platform);
cancellation of orders of the above securities contracts received from clients beforeexecution or after partial execution without assigning any reasons thereof;
Requirement to obtain appropriate declarations from the client before / after accepting suchorders.
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The Company shall –
not be responsible for non-execution / delay in execution of such orders and consequentialopportunity loss or financial loss to the client
have the discretion to place such restrictions, notwithstanding the fact that the client hasadequate credit balance or margin available in his account and/or the client had previouslypurchased or sold such securities / contracts through the Company itself;
have the right to revise the list of such securities / contracts on a periodic basis.
Client can obtain the information about the updated list of securities from the Relationship Manager / Dealing office
2. Setting up client’s exposure limits
Margin based limit / exposures will be set for the clients for transacting in Cash , F&O and Currency Derivatives segment. While computing the available margin, clear credit lying in client's settlement and margin ledger, securities held in client's beneficiary account with Member may be considered.
Margin can be paid in form of cash and approved collateral. Collateral will be valued on daily basis at latest / previous day's closing price and appropriate hair-cut shall be applicable. List of approved collaterals / securities along with applicable haircut, is subject to revision from time to time based on Exchange approved list, market volatility, quality of collateral and internal guidelines; and same can be obtained from the Relationship Manager / Dealing Office.
The Stock Broker may from time to time impose & vary limits on the orders that the client can place through the Stock Broker’s trading system (including exposure limits, turnover limits, limits as to the number, value and/or kind of securities in respect of which orders can be placed etc.).
The Stock Broker may need to vary or reduce the limits or impose new limits urgently on the basis of the Stock Broker’s risk perception and other factors considered relevant by the Stock Broker including but not limited to client's trade history / experience, if available, client’s financial capacity and / or credit worthiness limits on account of the Exchange/SEBI directions/limits (such as broker level/market level limits in security specific/volume specific exposures etc.) and the Stock Broker may be unable to inform the client of such variation, reduction or imposition or the clients inability to route any order through the Stock Broker’s trading system on account of any such variation, reduction or imposition of limits.
The client further agrees that the Stock Broker may at any time, at its sole discretion and without prior notice, prohibit or restrict the client’s ability to place orders or trade in securities through the Stock Broker, or it may subject any order placed by the client to review before its entry into the trading systems and may refuse to execute / allow execution of orders due to but not limited to the reason of lack of margin / securities or the order being outside the limits set by Stock Broker / Exchange / SEBI and any other reasons which the Stock Broker may deem appropriate in the circumstances.
The client agrees that the losses, if any on account of such refusal or due to delay caused by such review, shall be borne exclusively by the client.
However, for institutional clients, trades are confirmed by the custodian by T+1 morning and the custodian takes on the responsibility of settling the trade with the Exchange. If the custodian does not confirm a particular trade, then the trade will devolve on the Stock Broker. In such a scenario, the Stock Broker will settle the trade as a Delivery versus Payment trade.
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3. Policy on Brokerage Rate and Other Charges
The brokerage charged to the clients will not be more than the maximum brokeragepermissible as per the rules, regulations and bye-laws of the relevant Exchange / SEBI.
In consideration of providing broking and allied services, the client agrees to pay to theMember, brokerage and statutory levies as are prevailing from time to time and as they applyto the client's account, transactions and to the services that Member renders to the client.
The brokerage and other charges (including taxes thereon) shall be communicated to theclient at the time of registration and any variation thereon would be duly advised / mutuallyagreed from time to time.
A schedule of fee and commission, applicable service taxes and other transaction expensesshall also be provided to the client from time to time, upon request.
The client also agrees to pay the Member for added services / facilities / features as theymay apply to his account and which will be communicated to the client.
The slab rates of brokerage fixed by the Company may be function of the quality and cost of services provided to the client and the volume and revenue expected from a relationship. It shall be reviewed by the Company from time to time and may be changed in such manner as the Company may deem fit provided that the same would not contradict the regulatory provisions.
4. Imposition of penalty / delayed payment charges
As per the Exposure Limit section outlined earlier in the document, client shall maintain adequate margin / settle the obligation / top-up the margin by scheduled date. In case client fails to settle the dues in time, the Company reserves its right to levy late pay in / delayed payment charges at the rate upto 2% per month, for not making payment of their pay-in / margin obligation on time as per the Exchange requirement / schedule and / or levy a charge for disproportionate cash versus collaterals ratio prescribed by the Exchanges for deposit of margins in F&O.
The above levy is only a penal measure in case of a client default in meeting settlement and margin obligation and should not be construed as funding arrangement by the client; and the client cannot demand continuation of service on a permanent basis citing levy of delayed payment charges.
The client agrees that the Stock Broker may impose fines / penalties for any orders / trades / deals / actions of the client which are contrary to the Member client agreement / Rights and Obligations document / rules / regulations / bye laws of the Exchange or any other law for the time being 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 bear any punishment from any authority in connection with / as a consequence of / in relation to any of the orders / trades / deals / actions of the client, the same shall be borne by the client.
The Company provides exposure against the upfront margin received in the form of cash / collateral from the client and the client also has the prerogative to demand withdrawal of cash or collaterals at his discretion, subject to surplus margin in place. The Company shall not pay any interest or other benefit to the client for maintaining cash balances or depositing collateral margins with the Company except for the corporate benefit received on such collateral securities, if any.
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5. Liquidation Policy
(The right to sell client’s securities or close client’s positions, without giving notice to the client, on account of non-payment of clients dues)
Without prejudice to the Stock Broker’s other rights (including the right to refer the matter to arbitration), the Stock Broker shall be entitled to liquidate / close out all or any of the clients positions without giving notice to the client for non-payment of margins or other amounts including the pay in obligation, outstanding debts, etc. to the extent of client’s settlement / margin obligation only. The proceeds of such liquidation / close out, if any, would be adjusted against the clients liabilities / obligations. The client would be required to make good the shortfall, if any post liquidation, immediately on being intimated of the same by the Member.
The client shall ensure timely availability of funds / securities in form and manner at a designated time and in designated bank and depository accounts(s), for meeting his / her / its pay in obligation of funds and securities. Any and all losses and financial charges on account of such liquidations/closing out shall be charged to & borne by the client. In case of securities lying in a client margin account / client beneficiary account and having corporate actions like bonus / stock split, the benefit of the same for margin or other purpose will be given when the shares are actually received in the Stock Broker's designated depository account.
However, for institutional clients, trades are confirmed by the custodian by T+1 morning and the custodian takes on the responsibility of settling the trade with the Exchange. If the custodian does not confirm a particular trade, then the trade will devolve on the Stock Broker. In such a scenario, the Stock Broker will settle the trade as a Delivery versus Payment trade.
In case the payment of the margin, settlement obligation is made by the client through a bank instrument, the Stock Broker shall be at liberty to give the benefit / credit for the same only on the realization of the funds from the said bank instrument. Where the margin is made available by way of securities or any other property, the Stock Broker is empowered to decline its acceptance as margin and/ or to accept it at such reduced value as the Stock Broker may deem fit by applying haircuts or by valuing it by marking it to market or by any other method as the Stock Broker may deem fit in its absolute discretion.
The Stock Broker has the right but not the obligation, to cancel all pending orders and to sell / close / liquidate all open positions / securities / shares at the pre-defined square off time or when Mark to Market (M-T-M) percentage reaches or crosses stipulated margin percentage, whichever is earlier. The Stock Broker will have sole discretion to decide the stipulated margin percentage depending upon the market condition. In the event of such square off, the client agrees to bear all the losses based on actual executed prices, the client shall also be solely liable for all and any penalties and charges levied by the Exchange(s).
6. Shortages in obligations arising out of internal netting of trades
The Stock Broker shall not be obliged to deliver any securities or pay any money to the client unless and until the same has been received by the Stock Broker from the Exchange, the clearing corporation / clearing house.
However, for institutional clients, trades are confirmed by the custodian by T+1 morning and the custodian takes on the responsibility of settling the trade with the Exchange. If the custodian does not confirm a particular trade, then the trade will devolve on the Stock Broker. In such a scenario, the Stock Broker will settle the trade as a Delivery versus Payment trade. In such instances, in case of shortages, this policy would be applicable
Clients are required to make Securities / Funds pay-in on or before T+2 day. In case of default in security pay-in by the client and the shortage is at member level i.e. internal shortage, a penalty
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as applicable from time to time (not exceeding the percentage prescribed by the exchange for auctioned trades), will be imposed on the defaulting client and the benefit will be passed on to the respective beneficiary client.
The policy and procedure for settlement of shortages in obligations arising out of internal netting of trades is as under:
The short delivering client and the purchasing client are intimated about the short delivery.The securities delivered short are purchased from market on the settlement (T+2) day andthe purchase consideration (inclusive of all statutory taxes & levies) is debited to the shortdelivering seller client.
If securities cannot be purchased from the market due to any force majeure condition, theshort delivering seller is debited as per the exchange prescribed policy on closeout of tradesand the resultant difference will be debited to the short delivering seller and credited to thebuyer.
In case of securities having corporate actions, all cases where short delivery of cum benefittransactions cannot be auctioned on cum basis, the trades would be compulsorily closed outas per the exchange prescribed policy.
In case of default of securities pay-in by the client and the shortage is vis-à-vis theExchange, auction value of the respective exchanges and all levies, as applicable, shall berecovered from the defaulting client.
7. Conditions under which a client may not be allowed to take further positionor the broker may close the existing position of a client
The Stock Broker has margin based risk management policy. The client may take exposure up to the amount of margin available with the Company. The client may not be allowed to take position in case of non-availability / shortage of margin as per the risk policy of the Company. The existing position of the client is also liable to be squared-off / closed-out without giving notice due to shortage of margin / non- payment for their pay-in obligation /outstanding debts.
Further, under various circumstances outlined in the Liquidation Policy section of the document, the Client may not be permitted to take any fresh or further position until the full clearance of earlier dues, obligation, outstanding etc. It would be the duty of the client to monitor its position with the Company from time to time.
8. Temporarily suspending or closing a client’s account at the client’s request
The client account can be suspended temporarily, on receipt of specific formal communication from the client. During the period the client account is suspended, the market transaction in the client account will be prohibited. However, at the time of making such request, the client has to ensure that the trading account has been duly settled (both for securities as well as funds). The Member shall settle the funds and securities due to client, if any, latest within a period of seven days from the date of suspension of such account.
Such accounts shall be re-activated and any new requests for orders to trade shall be accepted from such clients only on receipt of formal communication from the client requesting re-activation of account in order to enable the client to trade along with completion of all required formalities of KYC including updation thereof, if necessary.
The client shall be entitled to close his trading account and terminate the member-client agreement/ relationship under the rights and obligations prescribed by SEBI which has been entered into between the client and the Stock Broker without giving any reasons to the Member, after giving formal notice in writing of not less than one month to the Member. The account shall be deemed to have been closed effective 30th day from the date of receipt of such termination
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notice by the Member. Notwithstanding any such termination, all rights, liabilities and obligations of the client arising out of or in respect of transactions entered into prior to the termination shall continue to subsist and vest in / be binding on the client.
At the time of making such request, the client has to ensure that all the open positions, if any, taken by the client are closed and the trading account has been duly settled (both for securities as well as funds). The Member shall settle the funds and securities due to client, if any, latest within a period of seven days from the date of closure of such account.
The Member recommends to the client not to undertake any further trading during the notice period and any trades of urgent nature would be undertaken by the Member against receipt of funds and / or securities prior to execution of such orders.
If the client wants to re-open the account, the client has to complete the applicable client registration process including due completion of applicable Know Your Customer (“KYC”) requirement.
9. De-registering a client
The Member shall be entitled to close a client’s trading account and terminate the Member-Client Agreement / Relationship under the rights and obligations prescribed by SEBI without giving any reasons to the client, after giving formal notice in writing of not less than one month to the client. The account shall be deemed to have been closed effective 30th day from the date of receipt of such termination notice by the client. Notwithstanding any such termination, all rights, liabilities and obligations of both, the client and the Member, arising out of or in respect of transactions entered into prior to the termination shall continue to subsist and vest in / be binding on both, the client and the Member.
The client has to ensure that all the open positions, if any, taken by the client are closed and the trading account has been duly settled (both for securities as well as funds). The Member shall settle the funds and securities due to client, if any, latest within a period of seven days from the date of closure of such account.
The Member recommends the client not to undertake any further trading during the notice period and any trades of urgent nature would be undertaken by the Member against receipt of funds and / or securities prior to execution of such orders.
Notwithstanding anything to the contrary stated above or in the Member-Client Agreement/ Rights and Obligations Document, the Stock Broker shall be entitled to terminate the relationship under the rights and obligations prescribed by SEBI / agreement with immediate effect in any of the following circumstances:
If the actions of the client are prima facie illegal / improper or such as to manipulate the priceof any securities or disturb the normal / proper functioning of securities or disturb the normal /proper functioning of the market, either alone or in conjunction with others.
If there is any commencement of a legal process against the client under any law in force orthe client is banned from accessing financial markets by any regulator or any such adverseorders is passed against the client;
On the death / lunacy or other disability of the client; If the client being a partnership firm, has any steps taken by the client and/or its partners for
dissolution of the partnership; If the client suffers any adverse material change in his / her / its financial position or defaults
in any other agreement with the Stock Broker; If there is reasonable apprehension that the client is unable to pay its debts or the client has
admitted its inability to pay its debts as they become payable; If the client is in breach of any term, condition or covenant of the Member Client Agreement/
Rights and Obligations Document;
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If the client has made any material misrepresentation of facts or if any covenant or warrantyof the client is incorrect or untrue in any material respect;
If a receiver, administrator or liquidator has been appointed or allowed to be appointed of allor any part of the undertaking of the client;
If the client has been taken or suffered to be taken any action for its re-organization,liquidation or dissolution; and
If the client has voluntarily or compulsorily become the subject of proceedings under anybankruptcy or insolvency law or being a company, goes into liquidation or has a receiverappointed in respect of its assets or refers itself to the Board for Industrial and FinancialReconstruction or under any law providing protection as a relief undertaking.
10. In-active Client account
In case of Institutional clients, the account will be considered as inactive if the client does not trade for period of 2 (two) fiscal years and for Non-Institutional Clients the account will be considered as inactive if the client does not trade for period of 1 (one) fiscal year. Calculation will be done in the first quarter of the relevant fiscal year and those clients who have not traded even a single time in the preceding 2 / 1 fiscal year(s) respectively will be considered as in-active, and the shares / credit ledger balance, if any, will be transferred to the client within one week of the identifying the client as in-active.
For non institutional clients, the accounts shall be re-activated and any new requests for orders to trade shall be accepted only on receipt of request from the client and post completion of all required formalities of KYC process. .
Exceptions, if any, shall be provided for such dormant accounts in respect of both institutional and non-institutional clients not traded for 1/ 2 years which as per Business are required to be kept active, shall be examined on case to case basis subject to Compliance and Management approval.
For institutional clients, on receiving the request from the client or bookings received from the client, the accounts shall be re-activated, on completion of all required formalities of KYC process. .
11. Copies of Documents
A copy of all the documents executed by the non-institutional client shall be given to the client, within 7 days from the date of execution of the documents. The Stock Broker shall be having proof of dispatch and the same shall be maintained by the Stock Broker for its record. ,
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Version History
Versions
Version Release date Description
1.1 Jan 2012 Annual Review of Policy 1.2 Jan 2013 Annual Review of Policy 1.3 Mar 2014 Annual Review of Policy 1.4 March 2015 Annual Review of Policy
1.5 May 2016 Annual Review of Policy 1.6 November 2017 Annual Review of Policy
Author and Approval
Version Release date Name Role
1.1 Jan 2012 India Compliance Author 1.2 Jan 2013 India Compliance Author
1.3 Mar 2014 India Compliance Author
1.4 March 2015 India Compliance Author
1.5 May 2016 India Compliance Author
1.6 November 2017
India Compliance Ravi Raja/ Devang Mehta
Author Reviewer
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Annexure- 8
TARIFF SHEET
Generic Charges Specific Charges
Percentage Percentage
Cash Segment Not more
than 2.5% of
contract
value
Futures & Options
Segment
Currency Segment
The above rates are exclusive of Statutory levies [eg. Goods and Services Tax(GST), Security Transaction Tax (STT), Stamp Duty, etc.] and Regulatory
levies/charges [eg. SEBI turnover fees, Exchange transaction charges, etc.] at the
rate prevailing from time to time.
The General rates as mentioned here shall be applied unless the special rates as
may be agreed by the Authorised Person/Introducer and client and the same are
mentioned here.
The rates as discussed / agreed and consented between the Client and Nomura
officials shall be made applicable.
Page - 37
Part III - Additional Documents
Write-up on Prevention of Money-laundering Act (PMLA)
Nomura Financial Advisory and Securities (India) Private Limited (NFAS) in its capacity being
registered entity of the Securities Exchange Board of India (SEBI) is required to comply with certain
rules and regulations including Know Your Client (KYC) and Anti Money Laundering requirements under the Prevention of Money Laundering Act, 2002 (PMLA), on an on-going basis.
Relevant extracts of the PMLA are appended below:
Verification of the records of the identity of clients
Rule 9 of the Prevention of Money-laundering (Maintenance of Records of the Nature and Value of
Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies,
Financial Institutions and Intermediaries) Rules, 2005 makes it mandatory to verify records of the identity of clients.
"9. Verification of the records of the identity of clients.* -
(1) Every reporting entity shall- (a) at the time of commencement of an account-based relationship -
(i) identify its clients, verify their identity, obtain information on the purpose and
intended nature of the business relationship; and
(ii) determine whether a client is acting on behalf of a beneficial owner, and identify
the beneficial owner and take all steps to verify the identity of the beneficial
owner:
Provided that where the Regulator is of the view that money laundering and terrorist
financing risks are effectively managed and where this is essential not to interrupt the normal
conduct of business, the Regulator may permit the reporting entity to complete the
verification as soon as reasonably practicable following the establishment of the relationship;
and
(b) in all other cases, verify identity while carrying out-
(i) transaction of an amount equal to or exceeding rupees fifty thousand, whether
conducted as a single transaction or several transactions that appear to be
connected, or
(ii) any international money transfer operations.
(2) For the purpose of clause (a) of sub-rule (1), a reporting entity may rely on a third party subject
to the conditions that-
(a) the reporting entity immediately obtains necessary information of such client due
diligence carried out by the third party; (b) the reporting entity takes adequate steps to satisfy itself that copies of identification data
and other relevant documentation relating to the client due diligence requirements will be
made available from the third party upon request without delay; (c) the reporting entity is satisfied that such third party is regulated, supervised or monitored
for, and has measures in place for compliance with client due diligence and record-
keeping requirements in line with the requirements and obligations under the Act; (d) the third party is not based in a country or jurisdiction assessed as high risk;
(e) the reporting entity is ultimately responsible for client due diligence and undertaking
enhanced due diligence measures, as applicable; and
Page - 38
(f) where a reporting entity relies on a third party that is part of the same financial group,
the Regulator may issue guidelines to consider any relaxation in the conditions (a) to (d).
(3) The beneficial owner for the purpose of sub-rule (1) shall be determined as under –
(a) where the client is a company, the beneficial owner is the natural person(s), who, whether
acting alone or together, or through one or more juridical person, has a controlling
ownership interest or who exercises control through other means.
Explanation.- For the purpose of this sub-clause-
1. “Controlling ownership interest” means ownership of or entitlement to more than
twenty-five percent of shares or capital or profits of the company; 2. “Control” shall include the right to appoint majority of the directors or to control
the management or policy decisions including by virtue of their shareholding or
management rights or shareholders agreements or voting agreements; (b) where the client is a partnership firm, the beneficial owner is the natural person(s), who,
whether acting alone or together, or through one or more juridical person, has ownership of/entitlement to more than fifteen percent of capital or profits of the partnership;
(c) where the client is an unincorporated association or body of individuals, the beneficial
owner is the natural person(s), who, whether acting alone or together, or through one or
more juridical person, has ownership of or entitlement to more than fifteen percent of the
property or capital or profits of such association or body of individuals;
(d) where no natural person is identified under (a) or (b) or (c) above, the beneficial owner is
the relevant natural person who holds the position of senior managing official; (e) where the client is a trust, the identification of beneficial owner(s) shall include
identification of the author of the trust, the trustee, the beneficiaries with fifteen percent
or more interest in the trust and any other natural person exercising ultimate effective
control over the trust through a chain of control or ownership; and
(f) where the client or the owner of the controlling interest is a company listed on a stock
exchange, or is a subsidiary of such a company, it is not necessary to identify and verify
the identity of any shareholder or beneficial owner of such companies.
(4) Where the client is an individual, he shall for the purpose of sub-rule (1), submit to the reporting
entity, one certified copy of an ‘officially valid document’ containing details of his identity and
address, one recent photograph and such other documents including in respect of the nature of
business and financial status of the client as may be required by the reporting entity:
Provided that photograph need not be submitted by a client falling under clause (b) of sub-rule (1)
(5) Notwithstanding anything contained in sub-rule (4), an individual who desires to open a small
account in a banking company may be allowed to open such an account on production of a self-
attested photograph and affixation of signature or thumb print, as the case may be, on the form for
opening the account:
Provided that-
(i) the designated officer of the banking company, while opening the small account, certifies
under his signature that the person opening the account has affixed his signature or
thumb print, as the case may be, in his presence;
(ii) a small account shall be opened only at Core Banking Solution linked banking company
branches or in a branch where it is possible to manually monitor and ensure that foreign
remittances are not credited to a small account and that the stipulated limits on monthly
and annual aggregate of transactions and balance in such accounts are not breached,
before a transaction is allowed to take place;
(iii) a small account shall remain operational initially for a period of twelve months, and
thereafter for a further period of twelve months if the holder of such an account provides
evidence before the banking company of having applied for any of the officially valid
Page - 39
documents within twelve months of the opening of the said account, with the entire
relaxation provisions to be reviewed in respect of the said account after twenty four
months;
(iv) a small account shall be monitored and when there is suspicion of money laundering or
financing of terrorism or other high risk scenarios, the identity of client shall be established through the production of officially valid documents, as referred to in sub-rule (4) of rule 9; and
(v) foreign remittance shall not be allowed to be credited into a small account unless the
identity of the client is fully established through the production of officially valid
documents, as referred to in sub-rule (4) of rule 9.
(6) Where the client is a company, it shall for the purposes of sub-rule (1) submit to the reporting
entity one certified copy of the following documents:- (i) Certificate of incorporation;
(ii) Memorandum and Articles of Association;
(iii) A resolution from the Board of Directors and power of attorney granted to its managers,
officers or employees to transact on its behalf; and (iv) an officially valid document in respect of managers, officers or employees holding an
attorney to transact on its behalf.
(7) Where the client is a partnership firm, it shall for the purposes of sub-rule (1) submit to the
reporting entity one certified copy of the following documents:- (i) registration certificate; (ii) partnership deed; and
(iii) an officially valid document in respect of the person holding an attorney to transact on its behalf.
(8) Where the client is a trust, it shall, for the purposes of sub-rule (1) submit to the reporting entity
one certified copy of the following documents:-
(i) registration certificate;
(ii) trust deed; and (iii) an officially valid document in respect of the person holding an attorney to transact on
its behalf.
(9) Where the client is an unincorporated association or a body of individuals, it shall submit to the
reporting entity one certified copy of the following documents:-
(i) resolution of the managing body of such association or body of individuals;
(ii) power of attorney granted to him to transact on its behalf; (iii) an officially valid document in respect of the person holding an attorney to transact on
its behalf; and
(iv) such information as may be required by the reporting entity to collectively establish the
legal existence of such an association or body of individuals.
(10) Where the client is a juridical person, the reporting entity shall verify that any person
purporting to act on behalf of such client is so authorized and verify the identity of that person.
(11) No reporting entity shall allow the opening of or keep any anonymous account or account in
fictitious names or account on behalf of other persons whose identity has not been disclosed or cannot
be verified.
(12) (i) Every reporting entity shall exercise ongoing due diligence with respect to the business
relationship with every client and closely examine the transactions in order to ensure that
they are consistent with their knowledge of the client, his business and risk profile and
where necessary, the source of funds.
Page - 40
(ii) When there are suspicions of money laundering or financing of the activities relating to
terrorism or where there are doubts about the adequacy or veracity of previously
obtained client identification data, the reporting entity shall review the due diligence
measures including verifying again the identity of the client and obtaining information on
the purpose and intended nature of the business relationship, as the case may be.
(iii) The reporting entity shall apply client due diligence measures also to existing clients on the basis of materiality and risk, and conduct due diligence on such existing relationships at appropriate times or as may be specified by the regulator, taking into account whether and when client due diligence measures have previously been undertaken and the adequacy of data obtained.
(13) (i) Every reporting entity shall carry out risk assessment to identify, assess and take effective
measures to mitigate its money laundering and terrorist financing risk for clients,
countries or geographic areas, and products, services, transactions or delivery channels
that is consistent with any national risk assessment conducted by a body or authority
duly notified by the Central Government.
(ii) The risk assessment mentioned in clause (i) shall -
(a) be documented;
(b) consider all the relevant risk factors before determining the level of overall risk
and the appropriate level and type of mitigation to be applied; (c) be kept up to date; and
(d) be available to competent authorities and self-regulating bodies.
(14) (i) The regulator shall issue guidelines incorporating the requirements of sub-rules (1) to
(13) above and may prescribe enhanced or simplified measures to verify the client’s
identity taking into consideration the type of client, business relationship, nature and
value of transactions based on the overall money laundering and terrorist financing risks involved.
Explanation- For the purpose of this clause, simplified measures are not acceptable whenever there is
a suspicion of money laundering or terrorist financing, or where specific higher-risk scenarios apply
or where the risk identified is not consistent with the national risk assessment.
(ii) Every reporting entity shall formulate and implement a Client Due Diligence Program,
incorporating the requirements of sub-rules (1) to (13) and guidelines issued under
clause (i) above.
(iii) the Client Due Diligence Program shall include policies, controls and procedures,
approved by the senior management, to enable the reporting entity to manage and
mitigate the risk that have been identified either by the reporting entity or through
national risk assessment.
* Amended vide Notification No. 12/2013 dated 27-08-2013 http://fiuindia.gov.in/downloads/notifications-no12.pdf
(Please note the said notification is in Hindi (Regional) and English language).
Page - 41
Submission of documents as per the Prevention of Money Laundering Act (PMLA)
Information requirement pertaining to the legal entity (Client):
Client: Company One certified copy of the following documents: (a) Certificate of incorporation; (b) Memorandum and Articles of Association;
(c) a resolution from the Board of Directors or power of attorney granted to its managers, officers or employees to transact on its behalf;
(d) Copy of (Permanent Account Number) Pan Card1 of the body corporate
(e) Share holding statement indicating name of the holders and percentage
holding in order to establish the customer’s identity including identity of its
beneficial owner (i.e. beneficiaries with 25% or more interest to be provided)
Client: Partnership
Firm
One certified copy of the following documents:
(a) registration certificate;
(b) partnership deed; and
(c) an officially valid document in respect of the person holding an attorney to transact on its behalf.
Client: Trust One certified copy of the following documents :
(a) registration certificate; (b) trust deed; and
(c) Copy of Pan Card of the trust (d) An officially valid document in respect of the person holding an attorney to
transact on behalf.
(e) Holding statement indicating name of the holders and percentage holding in
order to establish the customer’s identity including identity of its beneficial
owner (i.e. beneficiaries with 15% or more interest to be provided)
Client: Unincorporated Association or a Body of
Individuals
One certified copy of the following documents : (a) resolution of the managing body of such association or body of individuals;
power of attorney granted to person holding an attorney/ authority to transact
on its behalf; and
(b) such information as may be required to collectively establish the legal
existence of such an association or body of individuals.
(c) Copy of Pan Card of the Association of Persons(AOP)
(d) details to establish identity of beneficial owners
Information requirement pertaining to managers, officers or employees authorized by the Client:
Client: Company/
Partnership Firm/Trust /Unincorporated
Association or a Body
of Individuals
One certified copy of an officially valid document of photo identity and address
proof in respect of managers, officers or employees holding an attorney/authority to
transact on its behalf. The documents that can be provided are:
a. Copy of Passport or
b. Copy of PAN Card / Driving License / Voter's Identity Card to act as photo ID
proof along with an address proof in the form of a copy of a utility bill or bank
statement.
PAN card is a card issued by the revenue (Income Tax) authorities in India, upon tax registration.
Page - 42
Annexure 9
Client Consent
Legal Entity Name: ____________________________________________
Details of Authorized Signatories
Sr.
No.
Authorized Signatory Name
(As printed on the Aadhaar Card) Aadhaar
Number PAN
Date of
Birth
We understand that as per regulatory norms, Nomura Financial Advisory and Securities (India) Private Limited
(“NFA”) is required to independently authenticate the Aadhaar number and details provided by us and the same would be considered as part of our KYC records with NFA.
As per regulatory requirements, NFA may be required to provide these details to regulators, auditors, Centralized KYC Registry, AUA, KRA as maybe mandated by regulators from time to time. By providing the above details of the Authorized Signatories, we hereby confirm and agree that we have obtained consent of the said Authorized Signatories for:
a) collecting, storing, usage and authentication/validation of the data in order to comply with theUnique Identification Authority of India (UIDAI) and PMLA guidelines by NFA; and
b) sharing of information by NFA with its affiliates, service providers, regulators, auditors, centralizedKYC registry, AUA and KRA in connection with our dealings with NFA or any of its affiliates.
Legal Entity Name: _______________________________
Authorised Signatories
Date :
(Please affix entity rubber stamp)
Page - 43
Page - 43
PMLA Rules Definition under PMLA http://fiuindia.gov.in/files/AML_Legislation/PMLA%202002/Section%202%20-%20Definitions.html
Section 2 (ha) - “client” means a person who is engaged in a financial transaction or activity with a reporting entity and includes a person on whose behalf the person who engaged in the transaction or activity, is acting;
Relevant Extracts from PMLA Notification dated June 1, 2017 and December 12, 2017
Extracts from revised Rule 9 (6), 9 (7), 9 (8):
Where the client is a company/trust/partnership firm, it shall for the purposes of sub-rule (1), submit to the reporting entity the certified copies of the following documents:—
(a) Aadhaar numbers; and
(b) Permanent Account Numbers or Form 60 as defined in the Income-tax Rules, 1962, issued to managers, officers or employees holding an attorney to transact on the company’s behalf or where an Aadhaar number has not been assigned, proof of application towards enrolment for Aadhaar and in case Permanent Account Number is not submitted an officially valid document shall be submitted:
Provided that for the purpose of this clause if the managers, officers or employees holding an attorney to transact on the company's behalf are not eligible to be enrolled for Aadhaar number and do not submit the Permanent Account Number, certified copy of an officially valid document shall be submitted.
Extracts from Rule 9 (15):
Any reporting entity, at the time of receipt of the Aadhaar number under provisions of this rule, shall carry out authentication using either e-KYC authentication facility or Yes/No authentication facility provided by Unique Identification Authority of India.
Extracts from Rule 9 (17):
Provided that the clients, eligible to be enrolled for Aadhaar and obtain the Permanent Account Number, already having an account based relationship with reporting entities prior to date of this notification, the client shall submit the Aadhaar number and Permanent Account Number or Form No. 60, by such date as may be notified by the Central Government.
Provided that in case the client already having an account based relationship with reporting entities prior to the date of publication of this notification in the official Gazette fails to submit the Aadhaar number and Permanent Account Number by such date as may be notified by the Central Government, the said account shall cease to be operational till the time the Aadhaar number and Permanent Account Number is submitted by the client.
Relevant Extracts from PMLA Notification dated December 13, 2017
Page - 44
In pursuance of clause (a) and clause (c) of sub-rule (17) of rule 9 of the Prevention of Money-laundering
(Maintenance of Records) Rules, 2005, the Central Government hereby notifies the 31st March, 2018 or
six months from the date of commencement of account based relationship by the client, whichever is
later, as the date of submission of the Aadhaar number, and Permanent Account Number or Form 60 by
the clients to the reporting entity.
Page - 45
Annexure B
Classification of EFl's
Category Type of EFl's Kindly tick the
appropriate category
I. Government and Government related foreign investors such as Foreign Central Banks, Governmental Agencies, Sovereign W ealth Funds, International/ Multilateral Organizations/ Agencies
II. a. Appropriately regulated broad based funds such as Mutual Funds, InvestmentTrusts, Insurance / Reinsurance Companies, Other Broad Based Funds etc.
b. Appropriately regulated entities such as Banks, Asset Management Companies,Investment Managers/ Advisors, Portfolio Managers etc.
c. Broad based funds whose investment manager is appropriately regulatedd. University Funds and Pension Fundse. University related Endowments already registered with SEBI as Fii/Sub Account
Ill. All other eligible foreign investors investing in India under PIS route not eligible under Category I and II such as Endowments, Charitable Societies/Trust, Foundations, Corporate Bodies,Trusts, Individuals, Family Offices, etc.
Documentary requirements for each category of EFI
Document Type Category I Required
Category II Required
Category Ill Required Entity Level Constitutive
Docs Proof of Address ("POA")
Required Required {Power of Attorney, {Power of Attorney, mentioning the address, is mentioning the address, is acceptable as address proof) acceptable as address
proof)
Required {Address proof other than Power of Attorney should be submitted .)
PAN Card Required Required Required Financials Exempt Exempt Risk based financial data
sufficient SEBI Registration Certificate
Required Required Required
Board Resolution
Exempt Required Required
KYC Form Required Required Required Senior Management
(Whole Time
Directors/ Partners I Trustees I etc.)
List Required Required Required Proof Of Identity ("POI")
Exempt Exempt Required (Declaration on letterhead - full name, nationality and DoB OR provide Photo- identity proof)
POA Exempt Exempt Declaration on letter head Authorized Signatories
List & Signatures
Required (List of Global Custodian ('GC') signatories can be given in case of POA to GC)
Required (List of GC signatories can be given in case of POA to GC)
Required
POI Not required Not required Required Photographs Not required Not required Required
Ultimate Beneficlal Owner
List Exempt Required {Can declare - No UBO over 25%)
Required
POI Exempt Exempt Required
[ON THE LETTERHEAD OF
UNINCORPORATED ASSOCIATION/BODY OF INDIVIDUALS]
[Date]
[Name of FII/affiliate]
Dear Sirs,
Re: Declaration of Beneficial Ownership of [Name of an Unincorporated Association/Body of
Individuals] (the “Entity”)
We declare that1:
[Please tick as appropriate]
A. the following natural person(s) is/are the beneficiary(ies) who, whether acting alone or together, or
through one or more juridical person, has ownership of/entitlement to more than 15%* of the property,
capital or profits of the Entity:
Sl.
No.
Name &
Address of
the
Beneficial
Owner
(Natural
Person)
Date of
Birth
Tax
Residency
Jurisdiction
Nationality Whether
acting
alone or
together
through
one or
more
natural
persons as
group,
with their
name &
address
BO Group’s
percentage
Shareholding
/ Capital /
Profit
ownership in
the FPIs
Tax
Residency
Number/
Social
Security
Number/
Passport
Number of
BO (Please
provide
any)
OR
B. there is no natural person who, whether acting alone or together, or through one or more juridical
person, has ownership of/entitlement to more than 15%* of the property, capital or profits of the
Entity. We therefore provide details of the senior managing official(s) of the Entity:
Sl.
No.
Name &
Address of
the
Beneficial
Owner
(Natural
Person)
Date of
Birth
Tax
Residency
Jurisdiction
Nationality Whether
acting
alone or
together
through
one or
more
natural
persons as
group,
with their
BO Group’s
percentage
Shareholding
/ Capital /
Profit
ownership in
the FPIs
Tax
Residency
Number/
Social
Security
Number/
Passport
Number of
BO (Please
provide
any)
1 PMLA Rule 9(1) requires FIIs to determine whether a client is acting on behalf of a beneficial owner, and identify the beneficial owner and take all
steps to verify the identity of the beneficial owner. Where the client is an unincorporated association or body of individuals, the beneficial owner is the
natural person(s), who, whether acting alone or together, or through one or more juridical person, has ownership of or entitlement to more than fifteen
percent of the property or capital or profits of such association or body of individuals. Where no natural person is identified, the beneficial owner is the
relevant natural person who holds the position of senior managing official.
* In respect of FPIs coming from “high risk jurisdictions” as referred in SEBI Master circular No. CIR/ISD/AML/2010 dated December 31, 2010, lower
materiality threshold of 10% for identification of BO will be applied.
name &
address
We have enclosed copies of the proof of identity and proof of residential address of the above natural
persons.
We certify that there are no other BOs in the FPI other than those referred in the above list and confirm that
we are in compliance with the provisions of SEBI circular ref no. CIR/IMD/FPIC/CIR/P/2018/64 dated
April 10, 2018 and such other circulars as may be issued from time to time in this regard. We agree to
promptly notify you should any of the declarations given above change or no longer hold true after the date
of this letter. Furthermore, should any of the enclosed documents be updated or amended, we undertake to
promptly provide to you copies of such updated or amended documents.
Yours faithfully
[Name of Unincorporated Association/Body of Individuals]
By:
Name:
Title: Authorised Signatory
[ON THE LETTERHEAD OF THE TRUST]
[Date]
[Name of FII/affiliate]
Dear Sirs,
Re: Declaration of Beneficial Ownership of [Name of the Trust] (the “Trust”)
We hereby declare that1:
A. The following natural person(s) is/are beneficiary(ies) with 15%* or more interest in the Trust or
person(s) exercising ultimate effective control over the Trust through a chain of ownership or
control:
Sl.
No.
Name &
Address of
the
Beneficial
Owner
(Natural
Person)
Date of
Birth
Tax
Residency
Jurisdiction
Nationality Whether
acting
alone or
together
through
one or
more
natural
persons as
group,
with their
name &
address
BO Group’s
percentage
Shareholding
/ Capital /
Profit
ownership in
the FPIs
Tax
Residency
Number/
Social
Security
Number/
Passport
Number of
BO (Please
provide
any)
B. The settlor(s) of the Trust is/are:
Sl.
No.
Name &
Address of
the Settlor
(Natural
Person)
Date of
Birth
Tax
Residency
Jurisdiction
Nationality Whether
acting
alone or
together
through
one or
more
natural
persons as
group,
with their
name &
address
BO Group’s
percentage
Shareholding
/ Capital /
Profit
ownership in
the FPIs
Tax
Residency
Number/
Social
Security
Number/
Passport
Number of
BO (Please
provide
any)
NA
NA
1 PMLA Rule 9(1) requires FIIs to determine whether a client is acting on behalf of a beneficial owner, and identify the beneficial owner and take all
steps to verify the identity of the beneficial owner. Where the client is a trust, the identification of beneficial owner(s) shall include identification of the
author of the trust, the trustee, the beneficiaries with fifteen percent or more interest in the trust and any other natural person exercising ultimate effective
control over the trust through a chain of control or ownership.
* In respect of FPIs coming from “high risk jurisdictions” as referred in SEBI Master circular No. CIR/ISD/AML/2010 dated December 31, 2010, lower
materiality threshold of 10% for identification of BO will be applied.
C. The trustee(s) of the Trust is/are:
Sl.
No.
Name &
Address of
the Trustee
(Natural
Person)
Date of
Birth
Tax
Residency
Jurisdiction
Nationality Whether
acting
alone or
together
through
one or
more
natural
persons as
group,
with their
name &
address
BO Group’s
percentage
Shareholding
/ Capital /
Profit
ownership in
the FPIs
Tax
Residency
Number/
Social
Security
Number/
Passport
Number of
BO (Please
provide
any)
NA
NA
We have enclosed copies of the proof of identity and proof of residential address of the above natural
persons, and the registration certificates and constitutional documents of the other entities.
We certify that there are no other BOs in the FPI other than those referred in the above list and confirm that
we are in compliance with the provisions of SEBI circular ref no. CIR/IMD/FPIC/CIR/P/2018/64 dated
April 10, 2018 and such other circulars as may be issued from time to time in this regard. We agree to
promptly notify you should any of the declarations given above change or no longer hold true after the
date of this letter. Furthermore, should any of the enclosed documents be updated or amended, we
undertake to promptly provide to you copies of such updated or amended documents.
Yours faithfully
[Name of Trust]
By:
Name:
Title: Authorised Signatory
[ON THE LETTERHEAD OF THE COMPANY]
[Date]
[Name of FII/affiliate]
Dear Sirs,
Re: Declaration of Beneficial Ownership of [Name of the Company] (the “Company”)
We declare that1:
[Please tick as appropriate]
A. the following natural person(s) is/are the beneficiary(ies) who, whether acting alone or together, or
through one or more juridical person,
(i) has ownership of or entitlement to more than 25%* of shares or capital or profits of the
Company, or
(ii) who exercises control through other means (including the right to appoint majority of the
directors or to control the management or policy decisions including by virtue of shareholding
or management rights or shareholders agreements or voting agreements):
Sl.
No.
Name &
Address of
the
Beneficial
Owner
(Natural
Person)
Date of
Birth
Tax
Residency
Jurisdiction
Nationality Whether
acting
alone or
together
through
one or
more
natural
persons as
group,
with their
name &
address
BO Group’s
percentage
Shareholding
/ Capital /
Profit
ownership in
the FPIs
Tax
Residency
Number/
Social
Security
Number/
Passport
Number of
BO (Please
provide
any)
OR
B. there is no natural person who, whether acting alone or together, or through one or more juridical
person, has ownership of or entitlement to more than 25%* of shares or capital or profits of the
Company, or who exercises control through other means. We therefore provide details of the senior
managing official(s) of the Company:
Sl.
No.
Name &
Address of
the
Beneficial
Owner
(Natural
Date of
Birth
Tax
Residency
Jurisdiction
Nationality Whether
acting
alone or
together
through
one or
BO Group’s
percentage
Shareholding
/ Capital /
Profit
ownership in
Tax
Residency
Number/
Social
Security
Number/
1 PMLA Rule 9(1) requires FIIs to determine whether a client is acting on behalf of a beneficial owner, and identify the beneficial owner and take all
steps to verify the identity of the beneficial owner. Where the client is a company, the beneficial owner is the natural person(s), who, whether acting
alone or together, or through one or more juridical person, has a controlling ownership interest or who exercises control through other means.
“Controlling ownership interest” means ownership of or entitlement to more than twenty-five percent of shares or capital or profits of the company.
“Control” shall include the right to appoint majority of the directors or to control the management or policy decisions including by virtue of their
shareholding or management rights or shareholders agreements or voting agreements. Where no natural person is identified, the beneficial owner is the
relevant natural person who holds the position of senior managing official.
* In respect of FPIs coming from “high risk jurisdictions” as referred in SEBI Master circular No. CIR/ISD/AML/2010 dated December 31, 2010, lower
materiality threshold of 10% for identification of BO will be applied.
Person) more
natural
persons as
group,
with their
name &
address
the FPIs Passport
Number of
BO (Please
provide
any)
We have enclosed copies of the proof of identity and proof of residential address of the above natural
persons.
We certify that there are no other BOs in the FPI other than those referred in the above list and confirm that
we are in compliance with the provisions of SEBI circular ref no. CIR/IMD/FPIC/CIR/P/2018/64 dated
April 10, 2018 and such other circulars as may be issued from time to time in this regard. We agree to
promptly notify you should any of the declarations given above change or no longer hold true after the date
of this letter. Furthermore, should any of the enclosed documents be updated or amended, we undertake to
promptly provide to you copies of such updated or amended documents.
Yours faithfully
[Name of Company]
By:
Name:
Title: Authorised Signatory
[ON THE LETTERHEAD OF THE PARTNERSHIP]
[Date]
[Name of FII/affiliate]
Dear Sirs,
Re: Declaration of Beneficial Ownership of [Name of the Partnership] (the “Partnership”)
We declare that1:
[Please tick as appropriate]
A. the following natural person(s) is/are the beneficiary(ies) who, whether acting alone or together, or
through one or more juridical person, has ownership of/entitlement to more than 15%* of capital or
profits of the Partnership:
Sl.
No.
Name &
Address of
the
Beneficial
Owner
(Natural
Person)
Date of
Birth
Tax
Residency
Jurisdiction
Nationality Whether
acting
alone or
together
through
one or
more
natural
persons as
group,
with their
name &
address
BO Group’s
percentage
Shareholding
/ Capital /
Profit
ownership in
the FPIs
Tax
Residency
Number/
Social
Security
Number/
Passport
Number of
BO (Please
provide
any)
OR
B. there is no natural person who, whether acting alone or together, or through one or more juridical
person, has ownership of/entitlement to more than 15%* of capital or profits of the Partnership. We
therefore provide details of the senior managing official(s) of the Partnership:
Sl.
No.
Name &
Address of
the
Beneficial
Owner
(Natural
Person)
Date of
Birth
Tax
Residency
Jurisdiction
Nationality Whether
acting
alone or
together
through
one or
more
natural
persons as
group,
with their
name &
address
BO Group’s
percentage
Shareholding
/ Capital /
Profit
ownership in
the FPIs
Tax
Residency
Number/
Social
Security
Number/
Passport
Number of
BO (Please
provide
any)
1 PMLA Rule 9(1) requires FIIs to determine whether a client is acting on behalf of a beneficial owner, and identify the beneficial owner and take all
steps to verify the identity of the beneficial owner. Where the client is a partnership firm, the beneficial owner is the natural person(s), who, whether
acting alone or together, or through one or more juridical person, has ownership of/entitlement to more than fifteen percent of capital or profits of the
partnership. Where no natural person is identified, the beneficial owner is the relevant natural person who holds the position of senior managing official.
* In respect of FPIs coming from “high risk jurisdictions” as referred in SEBI Master circular No. CIR/ISD/AML/2010 dated December 31, 2010, lower
materiality threshold of 10% for identification of BO will be applied.
We have enclosed copies of the proof of identity and proof of residential address of the above natural
persons.
We certify that there are no other BOs in the FPI other than those referred in the above list and confirm that
we are in compliance with the provisions of SEBI circular ref no. CIR/IMD/FPIC/CIR/P/2018/64 dated
April 10, 2018 and such other circulars as may be issued from time to time in this regard. We agree to
promptly notify you should any of the declarations given above change or no longer hold true after the date
of this letter. Furthermore, should any of the enclosed documents be updated or amended, we undertake to
promptly provide to you copies of such updated or amended documents.
Yours faithfully
[Name of Partnership]
By:
Name:
Title: Authorised Signatory
