Compliance HandbookCompliance HandbookFor MPSE Trading MembersFor MPSE Trading Members

Compliance requirements pertaining to members of the Exchange Compliance requirements pertaining to members of the Exchange are given in byelaws, regulations and circulars of the Exchange and are given in byelaws, regulations and circulars of the Exchange and the Clearing Corporation. In order to facilitate quick reference to the Clearing Corporation. In order to facilitate quick reference to such requirements, an attempt has been made to collate them in a such requirements, an attempt has been made to collate them in a single handbook. This compliance handbook is presented as a single handbook. This compliance handbook is presented as a guiding document for carrying out internal compliance checks by guiding document for carrying out internal compliance checks by members in their head office, branch offices and offices of sub members in their head office, branch offices and offices of sub broker(s)/authorized person(s). broker(s)/authorized person(s).

PreamblePreamble

Table of contentsTable of contentsI.I. Client Registration Client Registration II.II. Order Management System and Internal ControlsOrder Management System and Internal ControlsIII.III. Contract noteContract noteIV.IV. Electronic Contract note (ECN)Electronic Contract note (ECN)V.V. Charging of BrokerageCharging of BrokerageVI.VI. Quarterly statement of accountsQuarterly statement of accountsVII.VII. Banking and Banking and DematDemat account operations account operationsVIII.VIII. Dealing with clients’ funds and securitiesDealing with clients’ funds and securitiesIX.IX. Margin RequirementsMargin RequirementsX.X. Internet TradingInternet TradingXI.XI. Other dealings with clientsOther dealings with clientsXII.XII. Dealing with intermediariesDealing with intermediariesXIII.XIII. Location and Operation of TerminalsLocation and Operation of TerminalsXIV.XIV. Display of Notice Board / SEBI registration certificateDisplay of Notice Board / SEBI registration certificateXV.XV. Control over branches and sub brokersControl over branches and sub brokersXVI.XVI. Issue of advertisementIssue of advertisementXVII.XVII. Maintenance of RecordsMaintenance of RecordsXVIII.XVIII. Continued membership requirementsContinued membership requirementsXIX.XIX. Due diligence in employee activitiesDue diligence in employee activitiesXX.XX. Compliance with Prevention of Money Laundering Act (PMLA), 2002Compliance with Prevention of Money Laundering Act (PMLA), 2002XXI.XXI. Compliance CalendarCompliance Calendar

I. Client Registration I. Client Registration

Client registration documents are to be executed with any new Client registration documents are to be executed with any new client before commencing transactions with the client.client before commencing transactions with the client.

Client registration documents are to be segregated into Client registration documents are to be segregated into mandatory and non-mandatory parts.mandatory and non-mandatory parts.

Know your client (KYC) form, Member constituent agreement Know your client (KYC) form, Member constituent agreement (MCA) and Risk Disclosure document (RDD) as per the SEBI (MCA) and Risk Disclosure document (RDD) as per the SEBI prescribed formats, constitute the mandatory part of the prescribed formats, constitute the mandatory part of the registration documents. All additional and voluntary clauses registration documents. All additional and voluntary clauses should be taken in voluntary documents separated from the should be taken in voluntary documents separated from the mandatory part.mandatory part.

Client Registration (contd.)Client Registration (contd.) In KYC ensure thatIn KYC ensure that

complete details of Client information / Status, Bank and complete details of Client information / Status, Bank and Depository Account details, Financial details of the Depository Account details, Financial details of the constituent, Investment/ Trading experience, References, constituent, Investment/ Trading experience, References, Financial documents (for Non Individual Constituents) and Financial documents (for Non Individual Constituents) and Signature of client are provided.Signature of client are provided.

Photograph, Proof of identity and address, Board Resolution Photograph, Proof of identity and address, Board Resolution from corporate clients permitting trading in derivative from corporate clients permitting trading in derivative products are attached.products are attached.

The segments in which a client wants to transact are The segments in which a client wants to transact are selected and marked by the client clearly.selected and marked by the client clearly.

In MCA ensure that In MCA ensure that In respect of clients registered in other exchange(s) also (if a member is In respect of clients registered in other exchange(s) also (if a member is

attached to different exchange(s), separate exchange-wise agreement is attached to different exchange(s), separate exchange-wise agreement is

executed.executed. agreement is printed on a non-judicial stamp paper of appropriate value agreement is printed on a non-judicial stamp paper of appropriate value

and is dated.and is dated. agreement is signed by both the member and the client and is witnessed.agreement is signed by both the member and the client and is witnessed. agreement contains clauses prescribed by SEBI / MPSE from time to agreement contains clauses prescribed by SEBI / MPSE from time to

timetime in respect of clients introduced by sub-broker, tripartite agreement is to in respect of clients introduced by sub-broker, tripartite agreement is to

be executed be executed

Client Registration (contd.)Client Registration (contd.)

In RDD ensure that In RDD ensure that client acknowledges the risk disclosure document and is aware that client acknowledges the risk disclosure document and is aware that

certain basic risks are involved in trading in equity and derivative certain basic risks are involved in trading in equity and derivative products.products.

Client should be made aware that contracts cannot be rescinded on Client should be made aware that contracts cannot be rescinded on the ground of lack of awareness or any other ground.the ground of lack of awareness or any other ground.

Conduct in person verification of individual and HUF clients.Conduct in person verification of individual and HUF clients. Collect PAN card copy of client, verify the same with the web site of Collect PAN card copy of client, verify the same with the web site of

Income tax Department and upload details of the client before placing Income tax Department and upload details of the client before placing orders for the client.orders for the client.

Allot a unique client code to each client and maintain a file mapping the Allot a unique client code to each client and maintain a file mapping the client codes and the PAN’s. client codes and the PAN’s.

Provide copies of all the executed documents to the clients.Provide copies of all the executed documents to the clients. Periodically update the clients’ financial and other details.Periodically update the clients’ financial and other details.

Client Registration (contd.)

II. Order Management System and II. Order Management System and Internal ControlsInternal Controls

Procedures to be put in place for receipt of orders, recording the Procedures to be put in place for receipt of orders, recording the

same and placing the orders in the trading system of the Exchange.same and placing the orders in the trading system of the Exchange.

Client-wise and security-wise limits on exposure, open position, etc. Client-wise and security-wise limits on exposure, open position, etc.

to be set up.to be set up.

Risk mitigation measures to be documented and made accessible to Risk mitigation measures to be documented and made accessible to

clients.clients.

Documentation of internal controls on areas like order modification / Documentation of internal controls on areas like order modification /

cancellation, client code changes and post-trade activities.cancellation, client code changes and post-trade activities.

Ensure monitoring mechanism for client’s debits / obligations and Ensure monitoring mechanism for client’s debits / obligations and

appropriate collection procedures.appropriate collection procedures.

III. Contract noteIII. Contract note Trading Member has to ensure that contract notes are issued in the Trading Member has to ensure that contract notes are issued in the

prescribed format within 24 hours of execution of trades on the prescribed format within 24 hours of execution of trades on the

Exchange. Copies of contract notes and proof of Delivery / Dispatch to Exchange. Copies of contract notes and proof of Delivery / Dispatch to

be maintained.be maintained.

To be issued on pre-printed stationary and signed by an Authorized To be issued on pre-printed stationary and signed by an Authorized

Signatory mentioning name.Signatory mentioning name.

Unique Client Code and PAN of the Constituent to be printed.Unique Client Code and PAN of the Constituent to be printed.

With running serial number (reset to one at the beginning of the Financial With running serial number (reset to one at the beginning of the Financial

Year).Year).

Dealing office details and PAN of the Trading Member to be printed.Dealing office details and PAN of the Trading Member to be printed.

Trade price and brokerage to be mentioned separately.Trade price and brokerage to be mentioned separately.

For contract notes issued with weighted average price for multiple trades For contract notes issued with weighted average price for multiple trades

resulting from single order, annexure containing details of all the trades resulting from single order, annexure containing details of all the trades

to be provided.to be provided.

IV. Electronic Contract note (ECN) IV. Electronic Contract note (ECN) ECNs can be issued only if specifically consented by client.ECNs can be issued only if specifically consented by client.

ECNs to be digitally signed, encrypted, non-tamperable and in ECNs to be digitally signed, encrypted, non-tamperable and in compliance with provisions of IT Act, 2000.compliance with provisions of IT Act, 2000.

Delivery of ECNs to be made by sending e-mail to the mail id provided Delivery of ECNs to be made by sending e-mail to the mail id provided by client.by client.

Log reports for sent mails and rejected / bounced mails to be Log reports for sent mails and rejected / bounced mails to be maintained. In case of non-delivery of ECNs, contract note should be maintained. In case of non-delivery of ECNs, contract note should be sent in physical form. sent in physical form.

Client to consent that non-receipt of bounced back mail by trading Client to consent that non-receipt of bounced back mail by trading member amounts to delivery of contract notes.member amounts to delivery of contract notes.

ECNs are required to be simultaneously published on the web-site of ECNs are required to be simultaneously published on the web-site of

trading member and clients are given secured access to the same by trading member and clients are given secured access to the same by way of client specific logon and password.way of client specific logon and password.

V. Charging of Brokerage V. Charging of Brokerage Brokerage rate is subject to a maximum of 2.5% of the Brokerage rate is subject to a maximum of 2.5% of the

transaction amount. However, in Capital Market segment, transaction amount. However, in Capital Market segment, trading member can charge brokerage up to 25 paise per trading member can charge brokerage up to 25 paise per share if the market value of the scrip is less than Rs 10/-.share if the market value of the scrip is less than Rs 10/-.

In case of option contract, brokerage is to be charged on In case of option contract, brokerage is to be charged on option premium amount and shall not exceed 2.5% of option premium amount and shall not exceed 2.5% of premium amount or Rs. 100/- per lot whichever is higherpremium amount or Rs. 100/- per lot whichever is higher

VI. Quarterly statement of accountsVI. Quarterly statement of accounts Send statement of accounts for funds and securities to all Send statement of accounts for funds and securities to all

the clients in such periodicity not exceeding three months the clients in such periodicity not exceeding three months (calendar quarter) within a month of the expiry of the said (calendar quarter) within a month of the expiry of the said period.period.

The statements should have an account of all receipts The statements should have an account of all receipts and deliveries / payments during the relevant period and and deliveries / payments during the relevant period and not simply, the details of holdings as at the end of the not simply, the details of holdings as at the end of the period.period.

Maintain proof of dispatch / delivery for the same.Maintain proof of dispatch / delivery for the same.

An error reporting clause giving 30 days time is to be An error reporting clause giving 30 days time is to be incorporatedincorporated

VII. Banking and Demat Account VII. Banking and Demat Account Operations Operations

Maintenance of separate client bank account and constituent Maintenance of separate client bank account and constituent

beneficiary account for keeping clients’ funds and securities beneficiary account for keeping clients’ funds and securities

respectively.respectively.

Segregate own and clients’ funds / securities in separate accounts.Segregate own and clients’ funds / securities in separate accounts.

Funds / securities of clients not to be deposited in own accounts.Funds / securities of clients not to be deposited in own accounts.

No payments towards expenses / levies can be made from client bank No payments towards expenses / levies can be made from client bank

account.account.

Receipts from / transfer to third parties, of funds and securities should Receipts from / transfer to third parties, of funds and securities should

not be effected in client bank account and constituent beneficiary not be effected in client bank account and constituent beneficiary

accountaccount

VIII. Dealing with clients’ funds & VIII. Dealing with clients’ funds & securitiessecurities

Ensure that funds / securities are received from respective clients’ Ensure that funds / securities are received from respective clients’

accounts only.accounts only.

Ensure that pay-out of funds / securities is made to respective Ensure that pay-out of funds / securities is made to respective

clients within one working day of pay-out by Exchange.clients within one working day of pay-out by Exchange.

Clients’ funds / securities are not used for any purpose other than Clients’ funds / securities are not used for any purpose other than

meeting the respective client’s margin / pay in obligations.meeting the respective client’s margin / pay in obligations.

Authorisation should be obtained from clients for deposit of their Authorisation should be obtained from clients for deposit of their

collaterals with exchange / clearing corporation towards margin. collaterals with exchange / clearing corporation towards margin.

Dealing with clients’ funds & Dealing with clients’ funds & securities (contd.)securities (contd.)

Clients’ securities should not be pledged to bank / financier for Clients’ securities should not be pledged to bank / financier for

raising funds.raising funds.

Funds are received from / paid to clients by way of crossed Funds are received from / paid to clients by way of crossed

cheques / demand drafts or by way of direct credit into the bank cheques / demand drafts or by way of direct credit into the bank

account through EFT or any other modes allowed by RBI only.account through EFT or any other modes allowed by RBI only.

Ensure that no cash dealings are made with clients.Ensure that no cash dealings are made with clients.

IX. Margin RequirementsIX. Margin Requirements Ensure to collect initial margin and maintenance margin in the approved mode (funds / Ensure to collect initial margin and maintenance margin in the approved mode (funds /

bank fixed deposits / bank guarantee / approved securities with appropriate hair cut) from bank fixed deposits / bank guarantee / approved securities with appropriate hair cut) from

the clients.the clients.

Ensure to put in place risk management system regarding the amount of margin collection Ensure to put in place risk management system regarding the amount of margin collection

and the mode of collection from other clients in Capital Market segment.and the mode of collection from other clients in Capital Market segment.

Ensure to collect initial margin in the approved mode from clients in F & O segment on an Ensure to collect initial margin in the approved mode from clients in F & O segment on an

upfront basis.upfront basis.

Trading member is required to report margin actually collected from clients, to NSCCL on Trading member is required to report margin actually collected from clients, to NSCCL on

a daily basis.a daily basis.

In the computation of margin collection from the clients for the purpose of reporting to the In the computation of margin collection from the clients for the purpose of reporting to the

Exchange.Exchange.

Margin Requirements (contd.)Margin Requirements (contd.) Unencumbered funds received only from the respective clients on an Unencumbered funds received only from the respective clients on an

upfront basis can be included. Any Debit balances in the F&O client ledger upfront basis can be included. Any Debit balances in the F&O client ledger should first be set off by apportioning the free balances / value of securities should first be set off by apportioning the free balances / value of securities and the only balance amount if any should be considered towards margins and the only balance amount if any should be considered towards margins collected from clients.collected from clients.

Any free balance of the same clients in other segments after considering Any free balance of the same clients in other segments after considering the debit balances and margins (if any) applicable in the respective the debit balances and margins (if any) applicable in the respective segments can be considered towards margins for the F&O segment. segments can be considered towards margins for the F&O segment.

Margins taken in the form of securities in the approved list should be valued Margins taken in the form of securities in the approved list should be valued as per the closing rate on the previous trading day and not the trading day, as per the closing rate on the previous trading day and not the trading day, with an appropriate hair-cut.with an appropriate hair-cut.

Information related to margin applicable, utilised and required / balance in Information related to margin applicable, utilised and required / balance in respect of each client is to be sent on a daily basis to the respective clients respect of each client is to be sent on a daily basis to the respective clients in both the segments. This information should show break up details in in both the segments. This information should show break up details in terms of funds, bank guarantee, bank deposits and securities.terms of funds, bank guarantee, bank deposits and securities.

X.X. InternetInternet Trading Trading Ensure reliability, security and confidentiality of internet trading system.Ensure reliability, security and confidentiality of internet trading system.

Client specific user id and password to be used for execution of trades by Client specific user id and password to be used for execution of trades by the respective client.the respective client.

Password policy to be adhered (secrecy, periodic change and other Password policy to be adhered (secrecy, periodic change and other aspects).aspects).

Internet clients shall trade through internet trading system and only in Internet clients shall trade through internet trading system and only in case of connectivity problems, their orders can be entered through back case of connectivity problems, their orders can be entered through back up system (like call and trade facility) after proper identification of the up system (like call and trade facility) after proper identification of the client.client.

Ensure that clients do not deal on behalf of others.Ensure that clients do not deal on behalf of others.

Trading Members providing internet based trading facility are required to Trading Members providing internet based trading facility are required to submit SSL certificate, for year ending June every year.submit SSL certificate, for year ending June every year.

XI. Other dealings with clientsXI. Other dealings with clients Issue contract notes for all trades in respect of the constituents Issue contract notes for all trades in respect of the constituents

introduced by sub-brokers also.introduced by sub-brokers also.

Have direct dealings with clients introduced by a sub-broker and Have direct dealings with clients introduced by a sub-broker and ensure that the sub-broker does not issue any bills / notes to the ensure that the sub-broker does not issue any bills / notes to the clients nor deal with the clients’ funds and securities in any manner.clients nor deal with the clients’ funds and securities in any manner.

Reconcile dividend account periodically and ensure that dividend Reconcile dividend account periodically and ensure that dividend received on behalf of clients is credited to the respective clients received on behalf of clients is credited to the respective clients within 30 days of receipt.within 30 days of receipt.

Inform all the constituents if you are engaged in own trading.Inform all the constituents if you are engaged in own trading.

Provide exclusive e-mail id for registering investor complaints and Provide exclusive e-mail id for registering investor complaints and display the id on your website and other materials, pamphlets and display the id on your website and other materials, pamphlets and advertisement campaigns.advertisement campaigns.

Other dealings with clients (contd.)Other dealings with clients (contd.) Maintain confidentiality of all client related information.Maintain confidentiality of all client related information.

‘‘Statement of Securities Transaction tax’ to be issued on an Statement of Securities Transaction tax’ to be issued on an annual (financial year) basis within one month from the annual (financial year) basis within one month from the close of the financial year, unless required by the clients close of the financial year, unless required by the clients otherwise as to receive the STT statement on a daily basis.otherwise as to receive the STT statement on a daily basis.

XII. Dealing with intermediariesXII. Dealing with intermediaries

Deal directly with clients, registered sub broker in CM Deal directly with clients, registered sub broker in CM segment and authorized person in F&O segment.segment and authorized person in F&O segment.

Inspect at least 10% of sub-brokers every year and Inspect at least 10% of sub-brokers every year and ensure that each sub-broker is inspected at least once ensure that each sub-broker is inspected at least once in every five years.in every five years.

Ensure that you do not act through or on behalf of Ensure that you do not act through or on behalf of another trading member / sub-broker of the Exchange another trading member / sub-broker of the Exchange either for proprietary trading or for trading on behalf of either for proprietary trading or for trading on behalf of clients without prior approval of the Exchange.clients without prior approval of the Exchange.

Dealing with intermediaries Dealing with intermediaries (contd.)(contd.)

Ensure that you deal with only one broker of another stock Ensure that you deal with only one broker of another stock exchange for own transactions with prior intimation to the exchange for own transactions with prior intimation to the Exchange.Exchange.

Ensure that dealings on behalf of constituents, through a Ensure that dealings on behalf of constituents, through a broker of another stock exchange are done only after broker of another stock exchange are done only after necessary registration as a sub-broker.necessary registration as a sub-broker.

In F&O segment, dealings with approved authorized In F&O segment, dealings with approved authorized persons may be done only if they are also registered as sub persons may be done only if they are also registered as sub brokers in the Capital Market segment of the Exchange brokers in the Capital Market segment of the Exchange

XIII. Location and Operation of XIII. Location and Operation of TerminalsTerminals

Ensure that trading terminals are not located at any place other Ensure that trading terminals are not located at any place other than the main / branch office and the offices of registered sub than the main / branch office and the offices of registered sub brokers / authorised persons of the member.brokers / authorised persons of the member.

Ensure that trading terminal is not operated by a person other Ensure that trading terminal is not operated by a person other than an approved user / approved person.than an approved user / approved person.

Ensure that all terminal operators in F & O segment are NCFM / Ensure that all terminal operators in F & O segment are NCFM / BDCE qualified and that at least one of every 5 Capital Market BDCE qualified and that at least one of every 5 Capital Market terminal operators in a location is NCFM qualified.terminal operators in a location is NCFM qualified.

Ensure that no NEAT terminals are extended to another location Ensure that no NEAT terminals are extended to another location

without the approval of the Exchange.without the approval of the Exchange.

Location and Operation of Location and Operation of Terminals (contd.)Terminals (contd.)

Upload details of all CTCL terminals to the Exchange prior to their Upload details of all CTCL terminals to the Exchange prior to their activation. Any change in the details viz. terminal id, user, location, activation. Any change in the details viz. terminal id, user, location, etc. also needs to be uploaded prior to such change.etc. also needs to be uploaded prior to such change.

Ensure that secrecy of terminal-wise logon and password is Ensure that secrecy of terminal-wise logon and password is maintained.maintained.

Trading Members are required to undertake system audit on annual Trading Members are required to undertake system audit on annual basis, for period ending 30th June, of all the branches where CTCL basis, for period ending 30th June, of all the branches where CTCL or Internet Based Trading facility is provided and submit one or Internet Based Trading facility is provided and submit one consolidated report thereof to the Exchange within one month from consolidated report thereof to the Exchange within one month from end of the period.end of the period.

Ensure to place orders on own account using ‘PRO’ code only and Ensure to place orders on own account using ‘PRO’ code only and through trading terminals authorised for such purpose.through trading terminals authorised for such purpose.

XIVXIV. Display of Notice Board / SEBI . Display of Notice Board / SEBI registration certificate registration certificate

Trading Members shall display, in all their offices / offices of Trading Members shall display, in all their offices / offices of their registered sub brokers where trading terminals are their registered sub brokers where trading terminals are located, notice boards/plates at prominently visible located, notice boards/plates at prominently visible locations, painted / printed in a permanent manner, in a font locations, painted / printed in a permanent manner, in a font and colour which enables easy reading of the subject and colour which enables easy reading of the subject matter and containing prescribed details.matter and containing prescribed details.

Display copy of SEBI registration certificate in the above Display copy of SEBI registration certificate in the above said offices.said offices.

XV. Control over branches and XV. Control over branches and sub brokerssub brokers

Ensure due diligence and credentials of entities proposed to be Ensure due diligence and credentials of entities proposed to be appointed as sub brokers/authorized persons.appointed as sub brokers/authorized persons.

Ensure proper procedures while opening and closing branches.Ensure proper procedures while opening and closing branches.

Ensure that clients are informed in advance in case of closure of Ensure that clients are informed in advance in case of closure of branch.branch.

Ensure that branches, sub-brokers, authorised persons do not Ensure that branches, sub-brokers, authorised persons do not indulge in unauthorised trading activities.indulge in unauthorised trading activities.

Monitor the activities of sub brokers/relationship managers /officials Monitor the activities of sub brokers/relationship managers /officials in-charge of branches to avoid unregistered intermediation, in-charge of branches to avoid unregistered intermediation, fraudulent activities, misuse of clients’ accounts, etc.fraudulent activities, misuse of clients’ accounts, etc.

Control over branches and sub Control over branches and sub brokers (contd.)brokers (contd.)

Ensure proper procedure for accounting of demand drafts Ensure proper procedure for accounting of demand drafts and pay orders received from clients in the respective and pay orders received from clients in the respective clients’ accounts.clients’ accounts.

Obtain and analyse periodic reports and information from Obtain and analyse periodic reports and information from all branches/sub brokers, to address various risk areas.all branches/sub brokers, to address various risk areas.

Take feedback from the clients of sub brokers and Take feedback from the clients of sub brokers and branches on their dealings with the sub brokers and branches on their dealings with the sub brokers and branch officials.branch officials.

Inspect at least 10% of branches and sub brokers every Inspect at least 10% of branches and sub brokers every year and ensure that each branch and sub broker is year and ensure that each branch and sub broker is inspected at least once in every five years. inspected at least once in every five years.

XVI. Issue of advertisementXVI. Issue of advertisement Before releasing any advertisement for business promotion, a Before releasing any advertisement for business promotion, a

copy of the advertisement has to be submitted to the copy of the advertisement has to be submitted to the Exchange at least seven days in advance and written Exchange at least seven days in advance and written permission of the Exchange is to be obtained before the permission of the Exchange is to be obtained before the advertisement is published.advertisement is published.

Ensure to abide by the code of advertisement given by the Ensure to abide by the code of advertisement given by the Exchange.Exchange.

The trading members may apply for approval of The trading members may apply for approval of advertisement as per the prescribed format.advertisement as per the prescribed format.

XVII. Maintenance of RecordsXVII. Maintenance of Records Maintain separate books of accounts and records for trades executed on Maintain separate books of accounts and records for trades executed on

each recognized stock exchange (in case of membership in different each recognized stock exchange (in case of membership in different exchanges).exchanges).

Maintain records and registers relating to business for a period of five years Maintain records and registers relating to business for a period of five years

either in hard form or non tamperable soft form, including the following:either in hard form or non tamperable soft form, including the following: Statements of funds and securities obligations received from NSCCL.Statements of funds and securities obligations received from NSCCL.

Client ledger, Margin register, Register of complaints.Client ledger, Margin register, Register of complaints.

Records in respect of brokerage collected separately from constituents.Records in respect of brokerage collected separately from constituents.

Register of transactions.Register of transactions.

Register or Ledger Account of Securities, client wise and security wise.Register or Ledger Account of Securities, client wise and security wise.

XVIII. Continued membership XVIII. Continued membership requirementsrequirements

Trading Member should obtain prior permission of Exchange and SEBI Trading Member should obtain prior permission of Exchange and SEBI

before effecting any change in shareholding / sharing pattern or change in before effecting any change in shareholding / sharing pattern or change in

directors / partners.directors / partners. Any change in name of the trading member must be intimated to the Any change in name of the trading member must be intimated to the

Exchange forthwith along with the necessary records, for the purpose of Exchange forthwith along with the necessary records, for the purpose of

effecting the change in the SEBI registration certificate.effecting the change in the SEBI registration certificate. Net worth of a trading member shall always be maintained above the Net worth of a trading member shall always be maintained above the

prescribed minimum of Rs 10 lakhs in case of corporates and Rs 10 lakhs prescribed minimum of Rs 10 lakhs in case of corporates and Rs 10 lakhs

in case of non-corporates.in case of non-corporates. Paid-up Capital of a trading member shall always be maintained above Paid-up Capital of a trading member shall always be maintained above

prescribed minimum of Rs. 10 lakha in case of corporates. prescribed minimum of Rs. 10 lakha in case of corporates. Details of Compliance Officer and any changes thereof to be intimated to Details of Compliance Officer and any changes thereof to be intimated to

the Exchangethe Exchange

XIX. Due diligence in employee XIX. Due diligence in employee activitiesactivities

Trading Member shall establish and enforce procedures to Trading Member shall establish and enforce procedures to

supervise its business and the activities of its employees that supervise its business and the activities of its employees that

are reasonably designed to achieve compliance with all the are reasonably designed to achieve compliance with all the

relevant regulatory requirements.relevant regulatory requirements. Trading Member shall specifically authorise in writing persons, Trading Member shall specifically authorise in writing persons,

who may be authorised to transact on behalf of the member who may be authorised to transact on behalf of the member

and do such acts which the member delegates to such and do such acts which the member delegates to such

persons. persons.

XX. Compliance with Prevention of Money XX. Compliance with Prevention of Money Laundering Act (PMLA), 2002Laundering Act (PMLA), 2002

• Appointment of and change in Principal Officer to be intimated to Appointment of and change in Principal Officer to be intimated to the Financial Intelligence Unit, India (FIU).the Financial Intelligence Unit, India (FIU).

• Written procedure for compliance with PMLA to be adopted.Written procedure for compliance with PMLA to be adopted.

• Adopt customer acceptance policies and procedures sensitive to Adopt customer acceptance policies and procedures sensitive to the risk of money laundering or terrorist financing transactions.the risk of money laundering or terrorist financing transactions.

• Strictly adhere to customer due diligence requirements from Strictly adhere to customer due diligence requirements from establishment of new account to transaction monitoring and report establishment of new account to transaction monitoring and report suspicious transactions, if any, to the FIU.suspicious transactions, if any, to the FIU.

• Organise suitable training programmes for employees and ensure Organise suitable training programmes for employees and ensure awarenessawareness

XXI. Compliance CalendarXXI. Compliance Calendar

A consolidated checklist of reports / statements / A consolidated checklist of reports / statements / certificates / data / submissions to be made by members certificates / data / submissions to be made by members to the Exchange / NSCCL is available in our website – to the Exchange / NSCCL is available in our website – Compliance Calendar.Compliance Calendar.