CLIENT GUIDANCE

DOCUMENT
FINVASIA SECURITIES PRIVATE LIMITED
SEBI REGN NO.: INZ000176037
MCX Member Code : 55135
NCDEX Member Code : 01259
Clearing Member : Globe Commodities Ltd.
Regd. Address : 802, Ansal Bhawan, 16 K.G. Marg, C.P., New Delhi-1
:
Corporate Office :
FINVASIA CENTRE, D 179, Phase 8 B (Sector 74) Mohali, Punjab 160055 (India)
Phone : +91-172-6670000, Fax : +91-172-6670070, E-mail : [email protected]
Registered Office : #1108, Sector 21-B, Chandigarh - 160022
Trading Member with MCX & NCDEX
Compliance Officer's Details : Ramanjeet Kaur, E-mail : [email protected]
Ph.: +91-172-6670000, Fax : +91-172-6670070

INDEX OF DOCUMENTS

1. Risk Disclosure Document (RDD) Documents detailing Risk associated with dealing in the Commodities Market.
2. Rights and Obligations Document stating the Rights & Obligation of Stock Broker/Trading Member, Sub broker and client for Trading
on exchanges (including additional Rights and Obligations in case of Internet/Wireless Technology based Trading)

3. Guidance Note Document detailing Do's & Don'ts for Trading on exchange, for the education for the investors.

4. Policies & Procedures Policies and procedures as per MCX Cir. No. MCX/325/29SEP2016

Client Guidance Booklet for the information of Client as per SEBI Circular No. CIR/MIRSD/16/2011 Dt. 22 August 2011

For any grievance/dispute please contact Finvasia Securities Private Limited at the above mention address or email
[email protected]. In case not satisfied with response, Please contact the concern exchange(s) at :
Exchange Name E-mail Id Phone No.
Multi Commodity Exchange of India Ltd. [email protected] 022-67318888
National Commodity & Derivatives Exchange Ltd. [email protected] 022-66406789
 ANNEXURE-2
RISK DISCLOSURE DOCUMENT
The Exchange does not expressly or impliedly, guarantee nor make In considering whether to trade, you should be aware of or must get
any representation concerning the completeness, the adequacy or acquainted with the following:-
accuracy of this disclosure documents nor has the Exchange 1. Basic Risks involved in the trading of Commodity Futures
endorsed or passed any merits of participating in the Commodity Contracts and other Commodity Derivatives Instruments
Derivatives market/trading. This brief statement does not disclose on the Exchange.
all of the risks and other significant aspects of trading. You should, i. Risk of Higher Volatility
therefore, study derivatives trading carefully before becoming
a. Volatility refers to the dynamic changes in price that
involved in it.
commodity derivative contracts undergo when trading
In the light of the risks involved, you should undertake transactions activity continues on the Commodity Exchange. Generally,
only if you understand the nature of the contractual relationship into higher the volatility of a commodity derivatives contract,
which you are entering and the extent of your exposure to risk. greater is its price swings. There may be normally greater
volatility in thinly traded commodity derivatives contracts
You must know and appreciate that investment in commodity futures than in actively traded commodities/ contracts. As a result
contracts/ derivatives or other instruments traded on the Commodity of volatility, your order may only be partially executed or not
Exchange(s), which have varying element of risk, is generally not an executed at all, or the price at which your order got
appropriate avenue for someone of limited resources/ limited executed may be substantially different from the last traded
investment and/ or trading experience and low risk tolerance. You price or change substantially thereafter, resulting in real
should, therefore, carefully consider whether such trading is suitable losses.
for you in the light of your financial condition. In case, you trade on ii. Risk of Lower Liquidity
the Exchange and suffer adverse consequences or loss, you shall a. Liquidity refers to the ability of market participants to buy
be solely responsible for the same and the Exchange shall not be and/ or sell commodity derivative contract expeditiously at a
responsible, in any manner whatsoever, for the same and it will not competitive price and with minimal price difference.
be open for you to take the plea that no adequate disclosure Generally, it is assumed that more the number of orders
regarding the risks involved was made or that you were not available in a market, greater is the liquidity. Liquidity is
explained the full risk involved by the concerned member. The Client important because with greater liquidity, it is easier for
shall be solely responsible for the consequences and no contract investors to buy and/ or sell commodity derivatives
can be rescinded on that account. contracts swiftly and with minimal price difference and as a
result, investors are more likely to pay or receive a
You must acknowledge and accept that there can be no guarantee of competitive price for commodity derivative contracts
profits or no exception from losses while executing orders for purchased or sold. There may be a risk of lower liquidity in
purchase and/or sale of a commodity derivatives being traded on the some commodity derivative contracts as compared to
Exchange. active commodity derivative contracts. As a result, your
order may only be partially executed, or may be executed
It must be clearly understood by you that your dealings on the with relatively greater price difference or may not be
Exchange through a member shall be subject to your fulfilling certain execute at all.
formalities set out by the member, which may, inter alia, include your
b. Buying/ Selling without intention of giving and/ or taking
filing the know your client form and are subject to Rules, Byelaws delivery of certain commodities may also result into losses,
and Business Rules of the Exchange guidelines prescribed by SEBI because in such a situation, commodity derivative contracts
from time to time and circulars as may be issued by the Exchange may have to be squared-off at a low/ high prices, compared
from time to time. to the expected price levels, so as not to have any obligation
to deliver/ receive such commodities.
The Exchange does not provide or purport to provide any advice and
shall not be liable to any person who enters into any business iii. Risk of Wider Spreads
relationship with any member of the Exchange and/ or third party a. Spread refers to the difference in best buy price and best
based on any information contained in this document. Any sell price. It represents the differential between the price of
information contained in this document must not be construed as buying a commodity derivative and immediately selling it or
business advice/investment advice. No consideration to trade vice versa. Lower liquidity and higher volatility may result in
should be made without thoroughly understanding and reviewing wider than normal spreads for less liquid or illiquid
the risks involved in such trading. If you are unsure, you must seek commodities/ commodity derivatives contracts. This in turn
will hamper better price formation.
professional advice on the same.
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iv. Risk-reducing orders b. During periods of volatility, on account of market
a. Most of the Exchanges have a facility for investors to place participants continuously modifying their order quantity or
“limit orders”, “stop loss orders” etc. Placing of such orders prices or placing fresh orders, there may be delays in
(e.g. “stop loss” orders or “limit” orders) which are intended execution of order and its confirmation.
to limit losses to certain amounts may not be effective many c. Under certain market conditions, it may be difficult or
a time because rapid movement in market conditions may impossible to liquidate a position in the market at a
make it impossible to execute such orders. reasonable price or at all, when there are no outstanding
b. A “market” order will be executed promptly, subject to orders either on the buy side or the sell side, or if trading is
availability of orders on opposite side, without regard to halted in a commodity due to any action on account of
price and that while the customer may receive a prompt unusual trading activity or price hitting circuit filters or for
execution of a “market” order, the execution may be at any other reason.
available prices of outstanding orders, which satisfy the
viii.System/ Network Congestion
order quantity, on price time priority. It may be understood
that these prices may be significantly different from the last a. Trading on the Exchange is in electronic mode, based on
traded price or the best price in that commodity derivatives satellite/leased line communications, combination of
contract. technologies and computer systems to place and route
c. A “limit” order will be executed only at the “limit” price orders. Thus, there exists a possibility of communication
specified for the order or a better price. However, while the failure or system problems or slow or delayed response
client received price protection, there is a possibility that the from system or trading halt, or any such other
order may not be executed at all. problem/glitch whereby not being able to establish access
d. A stop loss order is generally placed “away” from the current to the trading system/network, which may be beyond the
price of a commodity derivatives contract, and such order control of and may result in delay in processing or not
gets activated if and when the contract reaches, or trades processing buy or sell orders either in part or in full. You are
through, the stop price. Sell stop orders are entered cautioned to note that although these problems may be
ordinarily below the current price, and buy stop orders are temporary in nature, but when you have outstanding open
entered ordinarily above the current price. When the positions or unexecuted orders, these represent a risk
contract approaches pre-determined price, or trades because of your obligations to settle all executed
through such price, the stop loss order converts to a transactions.
market/limit order and is executed at the limit or better. 2. As far as Futures Commodity Derivatives are concerned,
There is no assurance therefore that the limit order will be please note and get yourself acquainted with the following
executable since a contract might penetrate the pre- additional features:-
determined price, in which case, the risk of such order not
getting executed arises, just as with a regular limit order. Effect of “Leverage” or “Gearing”:
v. Risk of News Announcements a. The amount of margin is small relative to the value of the
a. Traders/Manufacturers make news announcements that commodity derivatives contract so the transactions are
may impact the price of the commodities and/or commodity ‘leveraged’ or ‘geared’. Commodity Derivatives trading,
derivatives contracts. These announcements may occur which is conducted with a relatively small amount of margin,
during trading and when combined with lower liquidity and provides the possibility of great profit or loss in comparison
higher volatility may suddenly cause an unexpected with the principal investment amount. But transactions in
positive or negative movement in the price of the commodity derivatives carry a high degree of risk. You
commodity/ commodity derivatives contract. should therefore completely understand the following
statements before actually trading in commodity derivatives
vi. Risk of Rumours
contracts and also trade with caution while taking into
a. Rumours about the price of a commodity at times float in the account one’s circumstances, financial resources, etc.
market through word of mouth, newspaper, websites or
news agencies, etc., the investors should be wary of and b. Trading in Futures Commodity Derivatives involves daily
should desist from acting on rumours. settlement of all positions. Every day the open positions are
marked to market based on the closing price. If the closing
vii. System Risk
price has moved against you, you will be required to deposit
a. High volume trading will frequently occur at the market the amount of loss (notional) resulting from such
opening and before market close. Such high volumes may movement. This margin will have to be paid within a
also occur at any point in the day. These may cause delays stipulated time frame, generally before commencement of
in order execution or confirmation. trading on the next day.

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 c. If you fail to deposit the additional margin by the deadline or 4. GENERAL
if an outstanding debt occurs in your account, the Member i. Deposited cash and property:
of the Exchange may liquidate/square-up a part of or the
You should familiarize yourself with the protections
whole position. In this case, you will be liable for any losses
accorded to the money or other property you deposit
incurred due to such square-up/ Close Outs.
particularly in the event of a firm become insolvent or
d. Under certain market conditions, an Investor may find it bankrupt. The extent to which you may recover your money
difficult or impossible to execute the transactions. For or property may be governed by specific legislation or local
example, this situation can occur due to factors such as rules. In some jurisdictions, property, which has been
illiquidity i.e. when there are insufficient bids or offers or specifically identifiable as your own, will be pro-rated in the
suspension of trading due to price limit or circuit breakers same manner as cash for purposes of distribution in the
etc. event of a shortfall. In case of any dispute with the Member
of the Exchange, the same shall be subject to arbitration as
e. Steps, such as, changes in the margin rate, increase in the per the Rules, Bye-laws and Business Rules of the
cash margin rate etc. may be adopted in order to maintain Exchange.
market stability. These new measures may be applied to the
ii. Commission and other charges:
existing open interests. In such conditions, you will be
required to put up additional margins or reduce your Before you begin to trade, you should obtain a clear
positions. explanation of all commissions, fees and other charges for
which you will be liable. These charges will affect your net
f. You must ask your Member of the Exchange to provide the profit (if any) or increase your loss.
full details of the commodity derivatives contracts you plan
iii. For rights and obligations of the Members/Authorised
to trade i.e. the contract specifications and the associated
Persons/ clients, please refer to Annexure 3
obligations.
iv. The term ‘Constituent' shall mean and include a Client, a
3. TRADING THROUGH WIRELESS TECHNOLOGY OR ANY Customer or an Investor, who deals with a member for the
OTHER TECHNOLOGY: purpose of trading in the commodity derivatives through the
Any additional provisions defining the features, risks, mechanism provided by the Exchange.
responsibilities, obligations and liabilities associated with v. The term ‘member' shall mean and include a Trading
commodities trading through wireless technology or any other Member or a Member/Broker, who has been admitted as
technology should be brought to the notice of the client by the such by the Exchange and got a Registration Certificate
member. from SEBI.

ADDITIONAL RISK DISCLOSURE DOCUMENTS FOR OPTIONS TRADING

Risk of Option holders: thereby assuming a spread position or by acquiring other types
1. An option holder runs the risk of losing the entire amount paid of hedging positions in the options markets or other markets.
for the option in a relatively short period of time. This risk reflects However, even where the writer has assumed a spread or other
the nature of an option as a wasting asset which becomes hedging position, the risks may still be significant. A spread
worthless when it expires. An option holder who neither sells his position is not necessarily less risky than a simple 'long' or
option in the secondary market nor exercises it prior to its 'short' position.
expiration will necessarily lose his entire investment in the
3. Transactions that involve buying and writing multiple options in
option. If the price of the underlying does not change in the
combination, or buying or writing options in combination with
anticipated direction before the option expires, to an extent
buying or selling short the underlying interests, present
sufficient to cover the cost of the option, the investor may lose all
additional risks to investors. Combination transactions, such as
or a significant part of his investment in the option.
option spreads, are more complex than buying or writing a
2. The Exchanges may impose exercise restrictions and have
single option. And it should be further noted that, as in any area
absolute authority to restrict the exercise of options at certain
of investing, a complexity not well understood is, in itself, a risk
times in specified circumstances.
factor. While this is not to suggest that combination strategies
Risks of Option Writers:
should not be considered, it is advisable, as is the case with all
1. If the price movement of the underlying is not in the anticipated
investments in options, to consult with someone who is
direction, the option writer runs the risks of losing substantial
experienced and knowledgeable with respect to the risks and
amount.
potential rewards of combination transactions under various
2. The risk of being an option writer may be reduced by the
market circumstances.
purchase of other options on the same underlying interest and

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 ANNEXURE-3
RIGHTS AND OBLIGATIONS OF MEMBERS, AUTHORIZED PERSON AND CLIENTS
as prescribed by SEBI and Commodity Exchanges
1. The client shall invest/trade in those commodities 10. The client shall immediately notify the Member in writing if
/contracts/other instruments admitted to dealings on the there is any change in the information in the ‘account opening
Exchanges as defined in the Rules, Byelaws and Business form’ as provided at the time of account opening and
Rules/ Regulations of Exchanges/ Securities and Exchange thereafter; including the information on winding up
Board of India (SEBI) and circulars/notices issued there under petition/insolvency petition or any litigation which may have
from time to time. material bearing on his capacity. The client shall
2. The Member, Authorized Person and the client shall be bound provide/update the financial information to the Member on a
by all the Rules, Byelaws and Business Rules of the Ex periodic basis.
change and circulars/notices issued there under and Rules
11. A.Protection from unfair terms in financial contracts**
and Regulations of SEBI and relevant notifications of
Government authorities as may be in force from time to time. a. An unfair term of a non-negotiated contract will be void.
3. The client shall satisfy himself of the capacity of the Member b. A term is unfair if it –
to deal in commodities and/or deal in derivatives contracts and i. causes a significant imbalance in the rights and
wishes to execute its orders through the Member and the client obligations of the parties under the financial contract, to
shall from time to time continue to satisfy itself of such the detriment of the Client; and
capability of the Member before executing orders through the ii. is not reasonably necessary to protect the legitimate
Member. interests of the Member.
4. The Member shall continuously satisfy itself about the c. The factors to be taken into account while determining
genuineness and financial soundness of the client and in whether a term is unfair, include –
vestment objectives relevant to the services to be provided.
i. the nature of the financial product or financial service
5. The Member shall take steps to make the client aware of the
dealt with under the financial contract;
precise nature of the Member’s liability for business to be
conducted, including any limitations, the liability and the ii. the extent of transparency of the term;
capacity in which the Member acts. **contracts offered by commodity exchanges
6. Requirements of professional diligence iii. the extent to which the term allows a Client to compare it
a. The Member must exercise professional diligence while with other financial contracts for similar financial products
entering into a financial contract or discharging any or financial services; and
obligations under it. iv. the financial contract as a whole and the terms of any
b. “professional diligence” means the standard of skill and other contract on which it is dependent.
care that a Member would be reasonably expected to d. A term is transparent if it –
exercise towards a Client, commensurate with- i. is expressed in reasonably plain language that is likely to
i. honest market practice; be understood by the Client;
ii. the principle of good faith; ii. is legible and presented clearly; and
iii. level of knowledge, experience and expertise of the Client; iii. is readily available to the Client affected by the term.
iv. the nature and degree of risk embodied in the financial e. If a term of a financial contract is determined to be unfair
product* or financial service being availed by the Client; under point 11.A.c, the parties will continue to be bound
and by the remaining terms of the financial contract to the
v. the extent of dependence of the Client on the Member. extent that the financial contract is capable of
*Commodity derivative contract enforcement without the unfair term.
7. The Authorized Person shall provide necessary assistance an 11. B.
d co-operate with the Member in all its dealings with the a. “Non-negotiated contract” means a contract whose
client(s). terms, other than the terms contained in point 11.C.
CLIENT INFORMATION (given below) are not negotiated between the parties to
8. The client shall furnish all such details in full as are required by the financial contract and includes –
the Member in "Account Opening Form” with supporting i. a financial contract in which, relative to the Client, the
details, made mandatory by commodity exchanges/SEBI from Member has a substantially greater bargaining power in
time to time.
determining terms of the financial contract; and
9. The client shall familiarize himself with all the mandatory ii. a standard form contract.
provisions in the Account Opening documents. Any additional
clauses or documents specified by the Member shall be non- b. “Standard form contract” means a financial contract that
mandatory; therefore, subject to specific acceptance by the is substantially not negotiable for the Client, except for the
client. terms contained in point 11.C.

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 c. Even if some terms of a financial contract are negotiated iv. ensure that Clients can obtain reasonable access to
in form, the financial contract may be regarded as a non their personal information, subject to any exceptions
negotiated contract if so indicated by – that the Regulator may specify; and
i. an overall and substantial assessment of the financial v. allow Clients an effective opportunity to seek
contract; and modifications to their personal information to ensure
ii. the substantial circumstances surrounding the financial that the personal information held by the Member is
contract accurate, up to date and complete.
d. In a claim that a financial contract is a non-negotiated b. A Member may disclose personal information relating
contract, the onus of demonstrating otherwise will be on
to a Client to a third party only if –
the Member.
11. C. i. it has obtained prior written informed consent of the
Client for the disclosure, after giving the Client an
a. The above does not apply to a term of a financial contract
if it – effective opportunity to refuse consent;
i. defines the subject matter of the financial contract; ii. the Client has directed the disclosure to be made;
ii. sets the price that is paid, or payable, for the provision of iii. the Regulator has approved or ordered the disclosure,
the financial product or financial service under the and unless prohibited by the relevant law or
financial contract and has been clearly disclosed to the regulations, the Client is given an opportunity to
Client; or represent under such law or regulations against such
iii. is required, or expressly permitted, under any law or disclosure;
regulations. iv. the disclosure is required under any law or regulations,
b. The exemption under point 11.C does not apply to a term and unless prohibited by such law or regulations, the
that deals with the payment of an amount which is Client is given an opportunity to represent under such
contingent on the occurrence or non-occurrence of any law or regulations against such disclosure;
particular event.
v. the disclosure is directly related to the provision of a
12. The Member and Authorized Person shall maintain all the
financial product or financial service to the Client, if the
details of the client as mentioned in the account opening form
Member –
or any other information pertaining to the client, confidentially
and that they shall not disclose the same to any 1. informs the Client in advance that the personal
person/authority except as required under any law/regulatory information may be shared with a third party; and
requirements. Provided however that the Member may so 2. makes arrangements to ensure that the third party
disclose information about his client to any person or authority maintains the confidentiality of the personal
with the express permission of the client. information in the same manner as required under this
13. A. Protection of personal information and confidentiality Part; or
a. “Personal information” means any information that vi. the disclosure is made to protect against or prevent
relates to a Client or allows a Client’s identity to be actual or ed potential fraud, unauthorised transactions
inferred, directly or indirectly, and includes – or claims, if the Member arranges with the third party to
i. name and contact information; maintain the confidentiality of the personal information
ii. biometric information, in case of individuals in the manner required under this Part.-
iii. information relating to transactions in, or holdings of, c. “Third party” means any person other than the
financial products
concerned Member, including a person belonging to
iv. information relating to the use of financial services; or the same group as the Member.
v. such other information as may be specified.
14.A Requirement of fair disclosure both initially and on continuing
13. B. basis
a. A Member must –
a. Member must ensure fair disclosure of information that is
i. not collect personal information relating to a Client in likely to be required by a Client to make an informed
excess of what is required for the provision of a transactional decision.
financial product or financial service;
b. In order to constitute fair disclosure, the information must
ii. maintain the confidentiality of personal information
be provided –
relating to Clients and not disclose it to a third party,
except in a manner expressly permitted under point i. sufficiently before the Client enters into a financial
13.B.b.; contract, so as to allow the Client reasonable time to
understand the information;
iii. make best efforts to ensure that any personal
information relating to a Client that it holds is accurate, ii. in writing and in a manner that is likely to be understood by
up to date and complete; a Client belonging to a particular category; and

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 iii. in a manner that enables the Client to make reasonable In spite of consistently having paid margins, the client may,
comparison of the financial product or financial service on the settlement of its trade, be obliged to pay (or entitled to
with other similar financial products or financial services. receive) such further sums as the contract may
c. The types of information that must be disclosed to a Client dictate/require.
in relation to a financial product or financial service, which TRANSACTIONS AND SETTLEMENTS
may include information regarding – 17. The client shall give any order for buy or sell of commodities
i. main characteristics of the financial product or financial derivatives contract in writing or in such form or manner, as
service, including its features, benefits and risks to the may be mutually agreed between the client and the Member
Client; however ensuring the regulatory requirements in this regard
ii. consideration to be paid for the financial product or are complied with. The Member shall ensure to place orders
financial service or the manner in which the consideration and execute the trades of the client, only in the Unique Client
is calculated; Code assigned to that client.
iii. existence, exclusion or effect of any term in the financial 18. The Member shall inform the client and keep him apprised
product or financial contract; about trading/settlement cycles, delivery/payment
iv. nature, attributes and rights of the Member, including its schedules, any changes therein from time to time, and it shall
identity, regulatory status and affiliations; be the responsibility in turn of the client to comply with such
v. contact details of the Member and the methods of schedules procedures of the relevant commodity exchange
communication to be used between the Member and the where the trade is executed.
Client; 19. The Member shall ensure that the money deposited by the
vi. rights of the Client to rescind a financial contract within a client shall be kept in a separate account, distinct from his/its
specified period; or own account or account of any other client and shall not be
used by the Member for himself/itself or for any other client or
vii. rights of the Client under any law or regulations.
for any purpose other than the purposes mentioned in Rules,
14.B. circulars, notices, guidelines of SEBI and/or Rules, Business
a.Member must provide a Client that is availing a financial Rules, Bye-laws, circulars and notices of Exchange.
product or financial service provided by it, with the 20. Where the Exchange(s) cancels trade(s) suo moto all such
following continuing disclosures – trades including the trade/s done on behalf of the client shall
i. any material change to the information that was required ipso facto stand cancelled, Member shall be entitled to
to be disclosed under point 14.A at the time when the cancel the respective contract(s) with client(s).
Client initially availed the financial product or financial 21. The transactions executed on the Exchange are subject to
service; Rules, Byelaws and Business Rules and circulars/notices
ii. information relating to the status or performance of a issued thereunder of the Exchanges where the trade is
financial product held by the Client, as may be required to executed and all parties to such trade shall have submitted to
assess the rights or interests in the financial product or the jurisdiction of such court as may be specified by the
financial service; and Byelaws and Business Rules of the Exchanges where the
iii. any other information that may be specified. trade is executed for the purpose of giving effect to the
b. A continuing disclosure must be made – provisions of the Rules, Byelaws and Business Rules of the
i. within a reasonable time-period from the occurrence of Exchanges and the circulars/ notices issued thereunder.
any material change or at reasonable periodic BROKERAGE
intervals, as applicable; and 22. The Client shall pay to the Member brokerage and statutory
ii. in writing and in a manner that is likely to be understood levies as are prevailing from time to time and as they apply to
by a Client belonging to that category. the Client’s account, transactions and to the services that
MARGINS Member renders to the Client. The Member shall not charge
15. The client shall pay applicable initial margins, withholding brokerage more than the maximum brokerage permissible
margins, special margins or such other margins as are as per the Rules, Business Rules and Bye-laws of the
considered necessary by the Member or the Exchange or as relevant commodity exchanges and/or Rules of SEBI.
may be directed by SEBI from time to time as applicable to LIQUIDATION AND CLOSE OUT OF POSITION
the segment(s) in which the client trades. The Member is 23. Without prejudice to the Member's other rights (including the
permitted in its sole and absolute discretion to collect right to refer a matter to arbitration), the client understands
additional margins (even though not required by the that the Member shall be entitled to liquidate/close out all or
Exchange or SEBI) and the client shall be obliged to pay any of the client's positions for non-payment of margins or
such margins within the stipulated time. other amounts, outstanding debts, etc. and adjust the
16. The client understands that payment of margins by the client proceeds of such liquidation/close out, if any, against the
does not necessarily imply complete satisfaction of all dues. client's liabilities/obligations. Any and all losses and financial
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 charges on account of such liquidation/closing-out shall be b. If it is reasonably apparent to the Member that the
charged to and borne by the client. available information regarding the relevant personal
24. In the event of death or in solvency of the client or his/its circumstances of a Client is incomplete or inaccurate,
otherwise becoming incapable of receiving and paying for or the Member must warn the Client of the consequences
delivering or transferring commodities which the client has of proceeding on the basis of incomplete or inaccurate
ordered to be bought or sold, Member may close out the information.
transaction of the client and claim losses, if any, against the c. If a Client intends to avail of a financial product or
estate of the client. The client or his nominees, successors, financial service that the Member determines
heirs and assignee shall be entitled to any surplus which may unsuitable for the Client, the Member –
result there from. The client shall note that transfer of i. must clearly communicate its advice to the Client in
funds/commodities in favor of a Nominee shall be valid writing and in a manner that is likely to be understood
discharge by the Member against the legal heir. by the Client; and
DISPUTE RESOLUTION ii. may provide the financial product or financial service
25. The Member shall co-operate in redressing grievances of requested by the Client only after complying with point
the client in respect of all transactions routed through it. 29.A. a and obtaining a written acknowledgement from
26. The client and the Member shall refer any claims and/or the Client.
disputes with respect to deposits, margin money, etc., to 30. Dealing with conflict of interest
arbitration as per the Rules, Byelaws and Business Rules of In case of any conflict between the interests of a Client and
the Exchanges where the trade is executed and that of the Member, preference much be given to the Client
circulars/notices issued thereunder as may be in force from interests.
time to time.
a. A member must –
27. The client/Member understands that the instructions issued
by an authorized representative for dispute resolution, if any, i. provide a Client with information regarding any conflict
of the client/Member shall be binding on the client/Member in of interests, including any conflicted remuneration that
accordance with the letter authorizing the said the Member has received or expects to receive for
representative to deal on be half of the said client/Member. making the advice to the Client; and
28. Requirement for each Member to have an effective ii. give priority to the interests of the Client if the Member
grievance redress mechanism which is accessible to all its knows, or reasonably ought to know, of a conflict
Clients between –
a. A Member must have in place an effective mechanism 1. its own interests and the interests of the Client; or
to receive and redress complaints from its Clients in 2. the interests of the concerned Member and interests of
relation to financial products or financial services the Client, in cases where the Member is a financial
provided by it, or on its behalf, in a prompt and fair representative.
manner. b. The information under point 16a.i. must be given to the
b. A Member must inform a Client, at the commencement Client in writing and in a manner that is likely to be
of relationship with the Client and at such other time understood by the Client and a written
when the information is likely to be required by the acknowledgement of the receipt of the information
Client, of – should be obtained from the Client.
i. the Client’s right to seek redress for any complaints; c. In this section, “conflicted remuneration” means any
and benefit, whether monetary or non-monetary, derived
ii. the processes followed by the Member to receive and by a Member from persons other than Clients, that
redress complaints from its Clients. could, under the circumstances, reasonably be
29. A. Suitability of advice for the Client expected to influence the advice given by the Member
Right to receive advice that is suitable taking into account the to a Client.
relevant personal circumstances of the Client, such as the TERMINATION OF RELATIONSHIP
Clients financial circumstances and needs. This obligation 31. This relationship between the Member and the client shall be
would apply to persons who render advice to Clients and the terminated; if the Member for any reason ceases to be a
regulator may specify categories of financial products and member of the commodity exchange including cessation of
service that necessarily require such advice to be given. membership by reason of the Member's default, death,
a. A Member must – resignation or expulsion or if the certificate is cancelled by
i. make all efforts to obtain correct and adequate the Exchange.
information about the relevant personal circumstances 32. The Member, Authorized Person and the client shall be
of a Client; and entitled to terminate the relationship between them without
ii. ensure that the advice given is suitable for the Client giving any reasons to the other party, after giving notice in
after due consideration of the relevant personal writing of not less than one month to the other parties.
circumstances of the Client. Notwithstanding any such termination, all rights, liabilities

(7)
 and obligations of the parties arising out of or in respect of 39. The Client shall ensure that it has the required legal capacity
transactions entered into prior to the termination of this to, and is authorized to, enter into the relationship with
relationship shall continue to subsist and vest in/be binding on Member and is capable of performing his obligations and
the respective parties or his/its respective heirs, executors, undertakings hereunder. All actions required to be taken to
administrators, legal representatives or successors, as the ensure compliance of all the transactions, which the Client
case may be. may enter into shall be completed by the Client prior to such
33. In the event of demise/insolvency of the Authorized Person transaction being entered into.
or the cancellation of his/its registration with the Board 40. In case, where a member surrenders his/ her/ its
or/withdrawal of recognition of the Authorized Person by the membership, Member gives a public notice inviting claims, if
commodity exchange and/or termination of the agreement any, from investors. In case of a claim relating to transactions
with the Authorized Person by the Member, for any reason executed on the trading system of the Exchange, ensure that
whatsoever, the client shall be informed of such termination client lodge a claim with the Exchange within the stipulated
and the client shall be deemed to be the direct client of the period and with the supporting documents.
Member and all clauses in the ‘Rights and Obligations’ 41. A. Protection from unfair conduct which includes misleading
document(s) governing the Member, Authorized Person and conduct & abusive conduct
client shall continue to be in force as it is, unless the client a. Unfair conduct in relation to financial products or financial
intimates to the Member his/its intention to terminate their services is prohibited.
relationship by giving a notice in writing of not less than one b. “ Unfair conduct” means an act or omission by a Member
month. or its financial representative that significantly impairs, or
ADDITIONAL RIGHTS AND OBLIGATIONS is likely to significantly impair, the ability of a Client to
34. The Member and client shall reconcile and settle their make an informed transactional decision and includes –
accounts from time to time as per the Rules, Business Rules, i. misleading conduct under point 41.B
Bye Laws, Circulars, Notices and Guidelines issued by SEBI ii. abusive conduct under point 41.C
and the relevant Exchanges where the trade is executed.
iii. such other conduct as may be specified.
35. The Member shall issue a contract note to his clients for
41.B.
trades executed in such format as may be prescribed by the
Exchange from time to time containing records of all a. Conduct of a Member or its financial representative in
transactions including details of order number, trade number, relation to a determinative factor is misleading if it is likely
trade time, trade price, trade quantity, details of the to cause the Client to take a transactional decision that
derivatives contract, client code, brokerage, all charges levied the Client would not have taken otherwise, and the
etc. and with all other relevant details as required therein to conduct involves –
be filled in and issued in such manner and within such time as i. providing the Client with inaccurate information or
prescribed by the Exchange. The Member shall send contract information that the Member or financial representative
notes to the investors within 24 hours of the execution of the does not believe to be true; or
trades in hard copy and/or in electronic form using digital ii. providing accurate information to the Client in a manner
signature. that is deceptive.
36. The Member shall make pay out of funds or delivery of b. In determining whether a conduct is misleading under
commodities as per the Exchange Rules, Bye-Laws, point 41.B.a, the following factors must be considered to
Business Rules and Circulars, as the case may be, to the be “determinative factors” –
Client on receipt of the payout from the relevant Exchange i. the main characteristics of a financial product or financial
where the trade is executed unless otherwise specified by the service, including its features, benefits and risks to the
client and subject to such terms and conditions as may be Client;
prescribed by the relevant Exchange from time to time where ii. the Client’s need for a particular financial product or
the trade is executed. financial service or its suitability for the Client;
37. The Member shall send a complete `Statement of Accounts’ iii. the consideration to be paid for the financial product or
for both funds and commodities in respect of each of its financial service or the manner in which the consideration
clients in such periodicity and format within such time, as may is calculated;
be prescribed by the relevant Exchange, from time to time, iv. the existence, exclusion or effect of any term in a financial
where the trade is executed. The Statement shall also state contract, which is material term in the context of that
that the client shall report errors, if any, in the Statement within financial contract;
such time as may be prescribed by the relevant Exchange v. the nature, attributes and rights of the Member, including
from time to time where the trade was executed, from the its identity, regulatory status and affiliations; and
receipt thereof to the Stock/ Commodity broker.
vi. the rights of the Client under any law or regulations.
38. The Member shall send margin statements to the clients on
daily basis. Margin statement should include, inter-alia, 41.C.
details of collateral deposited, collateral utilized and collateral a. A conduct of a Member or its financial representative in
status (available balance/due from client) with break up in relation to a financial product or financial service is
terms of cash, Fixed Deposit Receipts (FDRs), Bank abusive if it –
Guarantee, warehouse receipts, securities etc. i. involves the use of coercion or undue influence; and

(8)
 ii. causes or is likely to cause the Client to take a 46. The Member shall continue to send contract notes in the
transactional decision that the Client would not have taken physical mode to such clients who do not opt to receive the
otherwise. contract notes in the electronic form. Wherever the ECNs
b. In determining whether a conduct uses coercion or undue have not been delivered to the client or has been rejected
influence, the following must be considered- (bouncing of mails) by the e-mail ID of the client, the Member
i. the timing, location, nature or persistence of the conduct; shall send a physical contract note to the client within the
stipulated time under the extant Regulations/ Rules, Bye-
ii. the use of threatening or abusive language or behaviour; Laws, Business Rules and Circulars of SEBI/commodity
iii. the exploitation of any particular misfortune or exchanges and maintain the proof of dispatch and delivery
circumstance of the Client, of which the Member is aware, of such physical contract notes.
to influence the Client’s decision with regard to a financial 47. In addition to the e-mail communication of the ECNs to the
product or financial service; client, the Member shall simultaneously publish the ECN on
iv. any non-contractual barriers imposed by the Member his designated web-site, if any, in a secured way and enable
where the Client wishes to exercise rights under a relevant access to the clients and for this purpose, shall allot
financial contract, including – a unique user name and password to the client, with an
v. the right to terminate the financial contract; option to the client to save the contract note electronically
vi. the right to switch to another financial product or another and/or take a print out of the same.
Member and 48. The Electronic Contract Note (ECN) declaration form
vii. a threat to take any action, depending on the obtained from the Client who opts to receive the contract
note in electronic form. This declaration will remain valid till it
circumstances in which the threat is made.
is revoked by the client.
ELECTRONIC CONTRACT NOTES (ECN)
LAW AND JURISDICTION
42. In case, client opts to receive the contract note in electronic 49. In addition to the specific rights set out in this document, the
form, he shall provide an appropriate e-mail id (created by Member, Authorised Person and the client shall be entitled
the client) to the Member (Kindly refer Appendix A of to exercise any other rights which the Member or the client
Annexure 1). Member shall ensure that all the may have under the Rules, Bye-laws and Business Rules of
rules/Business Rule/Bye-Laws/ circulars issued from time the Exchanges in which the client chooses to trade and
to time in this regard are complied with. The client shall circulars/notices issued thereunder or Rules of SEBI.
communicate to the Member any change in the email-id 50. The provisions of this document shall always be subject to
through a physical letter. If the client has opted for internet Government notifications, any rules, guidelines and
trading, the request for change of email id may be made circulars/notices issued by SEBI and Circulars, Rules,
through the secured access by way of client specific user id Business Rules and Bye laws of the relevant commodity
and password. exchanges, where the trade is executed, that may be in
43. The Member shall ensure that all ECN s sent through the e- force from time to time.
mail shall be digitally signed, encrypted, non-tamperable 51. The Member and the client shall abide by any award passed
and in compliance with the provisions of the IT Act, 2000. In by the Arbitrator(s) under the Arbitration and Conciliation
case, ECN is sent through e-mail as an attachment, the Act, 1996. However, there is also a provision of appeal, if
attached file shall also be secured with the digital signature, either party is not satisfied with the arbitration award.
encrypted and non-tamperable. 52. Words and expressions which are used in this document but
44. The client shall note that non-receipt of bounced mail which are not defined herein shall, unless the context
notification by the Member shall amount to delivery of the otherwise requires, have the same meaning as assigned
contract note at the e-mail ID of the client. thereto in the Rules, Byelaws and Regulations/Business
Rules and circulars/notices issued thereunder of the
45. The Member shall retain ECN and acknowledgement of the
Exchanges/SEBI.
e-mail in a soft and non-tamperable form in the manner
53. All additional voluntary/non mandatory clauses/ document
prescribed by the exchange in compliance with the
added by the Member should not be in contravention with
provisions of the IT Act, 2000 and as per the extant
Rules/ Business Rules/Notices/ Circulars of Exchanges/
rules/circulars/guidelines issued by SEBI/Commodity SEBI. Any changes in such voluntary clauses/ document(s)
exchanges from time to time. The proof of delivery i.e., log need to be preceded by a notice of 15 days. Any changes in
report generated by the system at the time of sending the the rights and obligations which are specified by Exchanges/
contract notes shall be maintained by the Member for the SEBI shall also be brought to the notice of the clients.
specified period under the extant rules/circulars/guidelines 54. If the rights and obligations of the parties hereto are altered
issued by SEBI/Commodity exchanges. The log report shall by virtue of change in Rules of SEBI or Bye-laws, Rules and
provide the details of the contract notes that are not delivered Business Rules of the relevant commodity exchanges where
to the client/e-mails rejected or bounced back. The Member the trade is executed, such changes shall be deemed to
shall take all possible st eps to ensure receipt of notification have been incorporated herein in modification of the rights
of bounced mails by him at all times within the stipulated time and obligations of the parties mentioned in this document.
period under the extant rules/circulars/ guidelines issued by 55. Members are required to send account statement to their
SEBI/Commodity exchanges. clients every month.
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 INTERNET & WIRELESS TECHNOLOGY BASED TRADING FACILITY PROVIDED BY MEMBERS 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. Member is eligible for providing Internet based trading (IBT) 7. The Client is fully aware of and understands the risks
and commodities trading through the use of wireless associated with availing of a service for routing orders over the
technology that shall include the use of devices such as internet/ commodities trading through wireless technology
mobile phone, laptop with data card, etc. which use Internet and Client shall be fully liable and responsible for any and all
Protocol (IP). The Member shall comply with all requirements acts done in the Client’s Username/password in any manner
applicable to internet based trading/- commodities trading whatsoever.
using wireless technology as may be specified by SEBI & the
8. The Member shall send the order/trade confirmation through
Exchanges from time to time.
email to the client at his request. The client is aware that the
2. The client is desirous of investing/trading in commodities and order/ trade confirmation is also provided on the web portal. In
for this purpose, the client is desirous of using either the case client is trading using wireless technology, the Member
internet based trading facility or the facility for commodities shall send the order/trade confirmation on the device of the
trading through use of wireless technology. The Member shall client.
provide the Member’s IBT Service to the Client, and the Client 9. The client is aware that trading over the internet involves
shall avail of the Member’s IBT Service, on and subject to many uncertain factors and complex hardware, software,
SEBI/Exchanges Provisions and the terms and conditions systems, communication lines, peripherals, etc. are
specified on the Member’s IBT Web Site provided that they susceptible to interruptions and dislocations. The Member
are in line with the norms prescribed by Exchanges/SEBI. and the Exchange do not make any representation or
3. The Member shall bring to the notice of client the features, warranty that the Member’s IBT Service will be available to the
risks, responsibilities, obligations and liabilities associated Client at all times without any interruption.
with commodities trading through wireless technology/ 10. The Client shall not have any claim against the Exchange or
internet or any other technology should be brought to the the Member on account of any suspension, interruption, non-
notice of the client by the Member. availability or malfunctioning of the Member’s IBT System or
4. The Member shall make the client aware that the Member’s Service or the Exchange’s service or systems or non-
IBT system itself generates the initial password and its execution of his orders due to any link/system failure at the
password policy as stipulated in line with norms prescribed by Client/Members/Exchange end for any reason beyond the
Exchanges/SEBI. control of the Member/Exchanges.

5. The Client shall be responsible for keeping the Username and

Password confidential and secure and shall be solely
responsible for all orders entered and transactions done by
any person whosoever through the Member’s IBT System
using the Client’s Username and/or Password whether or not
such person was authorized to do so. Also the client is aware
that authentication technologies and strict security measures
are required for the internet trading/ commodities 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 party
including employees and dealers of the Member.
6. The Client shall immediately notify the Member in writing if he
forgets his password, discovers security flaw in Member’s IBT
System, discovers/suspects discrepancies/ unauthorized
access through his username/password/account with full
details of such unauthorized use, the date, the manner and
the transactions effected pursuant to such unauthorized use,
etc.

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 ANNEXURE-4
GUIDANCE NOTE - DO'S AND DON'Ts FOR THE CLIENTS
Do’s 13. Insist on Monthly statements of your ledger account and report
1. Trade only through Registered Members of the Exchange. any discrepancies in the statement to your Member within 7
Check from the Exchange website at following link to see working days. In case of unsatisfactory response report the
whether the Member is registered with the Exchange. discrepancy to the Exchange within 15 working days from the
date of cause of action.
For MCX : http://www.mcxindia.com/SitePages/
MembersDetails.aspx. 14. Scrutinize minutely both the transaction & holding statements
For NCDEX : http://www.ncdex.com/Membership/ that you receive from your Depository Participant.
Memberdirectory.aspx. 15. Keep Delivery Instruction Slips (DIS) book issued by DPs in
2. Insist on filling up a standard ‘Know Your Client (KYC)’ form safe possession.
before you commence trading 16. Ensure that the DIS numbers are preprinted and your account
3. Insist on getting a Unique Client Code (UCC) and ensure all number (UCC) is mentioned in the DIS book.
your trades are done under the said UCC. 17. Freeze your Demat account in case of your absence for longer
4. Insist on reading and signing a standard ‘Risk Disclosure duration or in case of not using the account frequently.
Agreement’. 18. Pay required margins in time and only by Cheque and ask for
5. Obtain a copy of your KYC and/ or other documents executed receipt thereof from the Member.
by you with the Member, from the Member. 19. Deliver the commodities in case of sale or pay the money in
6. Cross check the genuineness of trades carried out at the case of purchase within the time prescribed.
Exchange through the trade verification facility available on
20. Understand and comply with accounting standards for
the Exchange website at the following link.
derivatives.
For MCX : http://www.mcxindia.com/SitePages/
21. Ensure to read, understand and then sign the voluntary
TradeVerification.aspx
clauses, if any, agreed between you and the Member. Note
For NCDEX : http://www.ncdex.com/MarketData/ that the clauses as agreed between you and the Member
VerifyTrade.aspx cannot be changed without your consent.
The trades can be verified online where trade information is
22. Get a clear idea about all brokerage, commissions, fees and
available up to 5 working days from the trade date.
other charges levied by the Member on you for trading and the
7. Insist on a duly signed Contract Note in specified format for relevant provisions/ guidelines specified by SEBI/Commodity
every executed trade within 24 hours of trade, highlighting the exchanges.
details of the trade along with your UCC.
23. Make the payments by account payee cheque in favour of the
8. Ensure that the Contract Note contains all the relevant Member. Ensure that you have a documentary proof of your
information such as Member Registration Number, Order No., payment/deposit of commodities with the Member, stating
Order Date, Order time, Trade No., Trade rate, Quantity, date, commodity, quantity, towards which bank/ demat
Arbitration Clause, etc. account such money or commodities (in the form of
9. Obtain receipt for collaterals deposited with the Member warehouse receipts) deposited and from which bank/ demat
towards margins. account.
10. Go through the Rules, Bye-laws, Regulations, Circulars, 24. The payout of funds or delivery of commodities (as the case
Directives, Notifications of the Exchange as well as of the may be) shall not be made to you within one working day from
Regulators, Government and other authorities to know your the receipt of payout from the Exchange, in case you have
rights and duties vis-à-vis those of the Member. given specific authorization for maintaining running account to
11. Ask all relevant questions and clear your doubts with your the member. Thus, in this regard, the running account
Member before transacting. authorization provided by you to the Member shall be subject
12. Insist on receiving the bills for every settlement. to the following conditions :

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 a) Such authorization from you shall be dated, signed by you Don’ts
only and contains the clause that you may revoke the same 1. Do not deal with any unregistered intermediaries.
at any time. 2. Do not undertake off-market transactions as such transactions
b) You need to bring any dispute arising from the statement of are illegal and fall outside the jurisdiction of the Exchange.
account to the notice of the Member in writing preferably
3. Do not enter into assured returns arrangement with any
within 7 (seven) working days from the date of receipt of Member
funds/commodities or statement, as the case may be. In
case of dispute, refer the matter in writing to the Investors 4. Do not get carried away by luring advertisements, rumours,
Grievance Cell of the relevant Commodity exchanges hot tips, explicit/ implicit promise of returns, etc.
without delay. 5. Do not make payments in cash/ take any cash towards
c) In case you have not opted for maintaining running account margins and settlement to/ from the Member.
and pay-out is not received on the next working day of the
6. Do not start trading before reading and understanding the Risk
receipt of payout from the exchanges, please refer the
Disclosure Agreement.
matter to the Member. In case there is dispute, ensure that
you lodge a complaint in writing immediately with the 7. Do not neglect to set out in writing, orders for higher value
Investors Grievance Cell of the relevant Commodity given over phone.
exchange.
8. Do not accept unsigned/duplicate contract note/confirmation
d) Please register your mobile number and email id with the
memo.
Member, to receive trade confirmation alerts/ details of the
transactions through SMS or email, by the end of the 9. Do not accept contract note/confirmation memo signed by any
trading day, from the stock exchanges. unauthorized person.
25. You should familiarize yourself with the protection accorded to 10. Don’t share your internet trading account’s password with
the money or other property you may deposit with your anyone
member, particularly in the event of a default in the commodity
derivatives or the member becomes insolvent or bankrupt. 11. Do not delay payment/deliveries of commodities to Member.
26. Please ensure that you have a documentary proof of having 12. Do not forget to take note of risks involved in the investments.
made the deposit of such money or property with the member,
stating towards which account such money or property 13. Do not sign blank Delivery Instruction Slips (DIS) while
deposited. furnishing commodities deposits and/or keep them with
Depository Participants (DP) or member to save time.
27. In case your problem/grievance/issue is not being sorted out
by concerned Member/Authorised Person then you may take 14. Do not pay brokerage in excess of that rates prescribed by the
up the matter with the concerned Commodity exchange. If you Exchange
are not satisfied with the resolution of your complaint then you
15. Don’t issue cheques in the name of Authorized Person.
can escalate the matter to SEBI.

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 POLICIES AND PROCEDURES
1. Refusal of orders for Commodity Derivatives:- 4. Imposition of Interest on Outstanding debit and margins:-
The client is aware and agrees that the Commodity broker may The client is required to pay all amounts due to the Commodity
refuse or restrict a client in placing the order in certain broker on its due date. The amount due to broker shall include
commodities depending on various conditions like volume /
all type of Margin and Pay-in obligation or on account of any
value / part of illiquid commodities although a client may have
credit balance or sufficient margin in the trading account. other reason.
However, Commodity broker under exceptional circumstances In case the client does not pay the amount due on time, the
may execute cliental order. The Commodity broker has the Commodity broker shall charge delayed payment charges up
discretion to reject execution of such orders based on its risk to the rate of 2% per month on the daily outstanding value or at
perception. such rates as may be determined from time to time by the
2. Setting Up client's Exposure Limit:- Commodity broker. In case of Commodity market, interest will
The client is aware and agrees that the Commodity broker may be charged from the time it become due till the time obligation
set the Exposure limits on the basis of available base capital is cleared by the client. The objective of charging such a
which may comprise of Ledger and collaterals (after suitable charge is to force a client to clear their dues on a timely basis.
margin hair cut). The limits may be allowed on a multiplier basis
to the available capital or actual VAR margin basis or a specified The client agrees that the Commodity broker may impose
margin depending on the Market conditions. Client agrees that fines/penalties for any orders / trades of the client which are
said limit parameters is a dynamic process that is allowed at the contrary to this agreement / rules / regulations of the
discretion of the Commodity broker based on the market Exchange. Further, under the instances where the Commodity
conditions and their risk perception about the market. However
broker has been penalized from any Authority on account of /
on exceptional situations broker may use its own discretion in
as a consequence of orders /trades of the client, the same
providing the limits and may change for a client or for all
depending on market condition. shall be borne by the client.
3. Applicable Brokerage Rate:- 5. The right to sell client's commodity derivative position or
a) The Commodity broker is eligible to charge brokerage close client's positions, without giving notice to the
with respect to transactions effected by it in various client, on account of non-payment of client's dues:-
segment as mentioned herein below - The Client shall provide timely funds/Securities /commodities
Delivery based- The maximum brokerage rate for the time for the purchase/sale of commodities to the Broker for meeting
being shall.be 2 % (plus expenses) in case of transactions his obligation to the Exchange. In case of client falling short of
resulting into delivery.
providing fund/commodities the Commodity broker has the
Non- delivery based - The maximum brokerage rate for right to close the positions. The Commodity Broker has the
the time being shall be 1 % in case of non-delivery
right to sell client's securities or close clients position with or
transactions.
without giving prior notice to client on account of non-payment
b) The Commodity broker may charge different Brokerage
of dues to the extent of Ledger debit and/or to the extent of
for Deliverable and Intraday transactions.
Margin obligation. The broker can liquidate the securities
c) Brokerage shall be charged on the premium amount at
bought or collaterals given or any other Commodities given in
which the options contract was bought or sold and not on
the strike price of the option contract. Maximum any other form for clearing the clients obligation.
permissible brokerage rate is 2.50% of premium amount 6. Shortages in Obligation Arising out Of Internal Netting of
or Rs.250/- per lot, whichever is higher. Trades
d) The client is aware that any request for change in the
The internal close out policy for handling internal shortages in
brokerage rate has to send in writing to the Branch who in
turn will forward the request to Head Office of the Commodities is in line with the exchange policy for handling
Commodity broker. Acceptance / rejection of such shortages at exchange level. Apart from this the seller will be
request is at the discretion of Commodity broker. additionally debited by 0.50% penalty. Thus, the buyer will get
e) Other Levies, charges, service tax etc. will be charged on the credit of the shortage based on the calculation given by
Brokerage as per the Rules prescribed by the exchanges and the Seller will be debited by the same amount
Government / Regulatory Agencies. All the above + 0.50% penalty. Any changes in this policy will be updated on
charges and levies debited to clients would be Finvasia Securities Private Limited website from time to time.
mentioned in the Contract Note send to client.
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7. Conditions under which a client may not be allowed to take Accordingly, such trading accounts are made inactive in the
further position or the broker may close the existing Trading System and an email/letter/SMS or by way of any
position of a client:- other mode the client is informed about the status of his trading
In case overall position in derivatives contracts has reached the account maintained with us. Further, if the client has any dues/
Regulators prescribed Exchange limit / Market Wide Open obligation to Finvasia Securities Private Limited, then any
Interest limit, then client may not be allowed to take further Commodities/securities bought or collaterals given or any
position, till such time Regulator prescribed limits comes down other securities/commodities. Given by the client in any other
to create a new position. form for clearing his obligation; will be adjusted and the
balance would be returned to the client.
Further, the Commodity broker may close the existing position
of a client to the extent of Debit balances to release the Margin For re-activation of such trading account, the client shall be
from the Exchange. In case if the Commodity broker has required to make a request to re-open the account and submit
sufficient Margin cover on behalf of its client, it may still decide all necessary information with regard to updation of his / their
based on the market conditions and risk perception not to allow KYC requirement. Finvasia Securities Private Limited upon
further position or may close the existing position of a client. verifying at its end may activate client's trading code in the
Trading System and an email/letter/SMS or by way of any
8. Temporary Suspension/Closure of Accounts
other mode the client is informed about the status of his trading
The client may request the Commodity broker for temporary account. Upon re-activation the stock broker may execute the
suspension/closure of his trading account by sending a written order on behalf of its client. Also, after reactivation,
request to Branch. This request will be in turn sent by Branch to transactions on the basis of certain parameters are confirmed
Head Office for further processing where after verification of the over telephone with clients, if such transactions are executed
client details, the trading account of the client will be after a gap of such period of 12 months.
suspended.
11. The Client is informed that Finvasia Securities Private Limited
The client would be required to clear all his dues / settlement of does carry proprietary trading.
obligations before his account is temporarily suspended. The
client may also be required to fulfill other conditions, on a case 12. Client acceptance of policies and procedures mentioned here
to case basis. in above -I /we have fully understood and agree to sign the
same. Above policies and procedures may be amended /
The Commodity broker can withhold the payouts of client and changed unilaterally by the stock broker provided the same is
suspend/close his trading account due to any internal /
regulatory action.
Upon Suspension/closure of trading account an intimation will
be sent to the client within 15 days of suspension.
9. Deregistering a client
In addition to what the client has agreed in the agreement, the
Commodity broker may terminate a client with immediate
effect, but not limited to the following reasons -
If the client is debarred by SEBI or any other regulatory authority
As a part of surveillance measure, if a client appears to be
indulging in manipulative practices.
Under the circumstances when there is a reasonable ground to
believe that the client is unable to clear its dues or has admitted
its inability to pay its debt.
If the client violates any of the terms of the agreement.
10. Treatment of Inactive Clients
Finvasia Securities Private Limited identifies such client codes /
trading accounts that are in-operative for a minimum period of
preceding 12 months.

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