De-mat and trading account opening procedure (Back office working)

1. You need to fill and / or sign the Client Registration Kit which consists of following documents

The 'Know Your Client' form, also attach all the documents as mentioned in the checklist, The client agreement, Supplemental agreement, Pledge agreement Terms & Conditions broking & Products and services Power of Attorney for broking & Products & Services Schedule of Charges

2. You may then draw a cheque of Rs.800/- in favor of 'Geojit BNP Paribas Financial Services Ltd.' towards the account opening charges. (For NRIs the account opening charge is Rs.1100/-) 3. Along with the Client Kit you will get the login password of trading site, Customer care & PIN for Call centre in a sealed envelope In case you need any assistance in filling up the form and understanding the documents you may want to contact our marketing executive / branch official. After you have submitted all the documents and the cheque these will be processed at centralized 'Client Registration Department' at the Head Office in Kochi, Kerala. If any document / information is missing then you will be contacted by the concerned IT executive or the branch. If all the documents / information is correct then your account will be activated and an email will be sent to your registered email id (as mentioned in your account opening documents) with the welcome letter, your user id and password. You can login to the Geojit BNP Paribas system immediately on receipt of the user id. On logging in for the first time you have to necessarily change your password for security reasons.

Documents Required 1. Resident Individuals

Documents to be submitted for registration You need to submit the documents mentioned below while opening an Online Trading and Demat account. It helps in faster registration. Trading account is opened in single name while demat account may be opened in joint name with a maximum of 3 holders. It is however essential that the customer maintains a demat account with Geojit for availing the online Trading facility. In case the permanent address is different from the correspondence address then the proof of address has to be submitted for separately for each of them from the list given below. For a two-in-one account: i.e. Trading and Demat Resident Indian

Two recent passport size photographs Proof of Bank Account: Any one of the following may be submitted 1. Copy of Bank Statement 2. Copy of first page of the Bank Pass Book.

3. A cancelled cheque (only if the account holder's name is printed on it) Copy of Client Master towards proof of an existing Demat Account DP Proof in case of DP's other than Geojit DP Proof of Identity: Pan Card Proof of Address: Any one of the following may be submitted 1. Passport copy 2. Voter Id card copy 3. Driving license copy 4. Bank Pass book copy 5. Verified copies of a. Electricity bill or telephone bill in the customers name (not more than two months old) b. Leave and license agreement/agreement for sale. 6. Copy of Ration Card 7. Identity card/document with address, issued by a. Central/State government and its departments b. Statutory /Regulatory Authorities c. Public Sector Undertakings d. Scheduled Commercial banks e. Public Financial Institutions f. Colleges affiliated to Universities g. Professional Bodies such as ICAI, ICWAI, ICSI, Bar council etc to their Members

2. NRI

Non-Resident Indian In addition to all of the documents stated for Resident Individuals, for an NRI, the following additional documents are required: 1. 2. 3. 4. Copy of PIS account opened with a designated bank Proof of his foreign address Copy of valid visa Passport copy

3. Corporate

Copy of Memorandum and Articles of Association Copies of Annual Report of last three years Net Worth Certificate by a Chartered Accountant Net Worth Certificate by a Chartered Accountant Copy of Income Tax return Resolution passed by the company for operating the trading account in Cash with GEOJIT PAN CARD of the company Photo of the directors

Statutory proof of all the directors Authorisation letter from company (in company letter pad, signed by all the directors) authorising any of the director to operating the trading a/c.

4.HUF

Bank account should be in the name of HUF Photograph of Karta Proof of identity (same as stated for Individuals) Proof of address of the Karta (same as stated for Individuals) Pan number in HUF's name Proof of Bank Account: Any one of the following may be submitted 1. Copy of Bank Statement 2. Copy of first page of the Bank Pass Book. 3. A cancelled cheque (only if the account holder's name is printed on it) List of co-parceners in the HUF, along with an authorization given to the Karta by the said co-parceners to open and operate the DP and Trading accounts. DP should be HUF DP A/c.

5. Partnership Film

Partnership Firm (Demat account cannot be opened in the Firms name)

A certified true copy of the partnership deed Registration Certificate Copy of last Income Tax Returns filed Proof of Bank Account: Any one of the following may be submitted 1. Copy of Bank Statement (should be in the name of the firm) 2. Copy of first page of the Bank Pass Book. A cancelled cheque (only if the account holder's name is printed on it) PAN of the firm Authorization from all the partners to open a demat / Trading account with Geojit. List of personnel authorized to operate and maintain, duly authorized by the partners Proof if identity of all partners. DP should be opened in the name of the authorised partner.

6.CheckList

Please check the following while opening an account: 1. Name, address, phone number and date of birth have been stated correctly. 2. PAN has been mentioned correctly. Please note that PAN is mandatory for trading (CM and F&O) as well as demat accounts. 3. Occupation, financial and bank details have been written.

4. Signature on Know Your Client form, NSE & BSE agreements (on all the pages of the agreement), Risk Disclosure document, Power of Attorney, etc. 5. Signature across the photographs. 6. Introducer's full details have been mentioned along with signature and seal. 7. Name and signature of witnesses is present.

Pay in and Pay out system

Definition of 'Payout'
The expected financial return from an investment over a given period of time. Payout may be expressed on an overall or periodic basis as either a percentage of the investment's cost or in a real dollar amount. Payout can also refer to the period of time in which an investment or a project is expected to recoup its initial capital investment and become minimally profitable. Short for "time to payout", "term to payout" or "payout period".

Investopedia explains 'Payout'

In terms of financial securities like annuities and dividends, payouts refer to the amounts received at given points in time. For example, in the case of an annuity, payouts are made to the annuitant at regular intervals such as monthly or quarterly. With dividends, payouts are made by corporations to their investors and can be in the form of cash dividends or stock dividends.
Pay-in n. = a deposit in an account. Pay out n. 1. An act or instance of paying, expending, or disbursing. 2. Money paid, expended, or disbursed, as a dividend or winning: He went to the betting window to collect his payout.

Settlement of Trades What is a Contract Note ? What are the additional charges other than brokerage that can be levied on the investor ? What happens if I could not make the payment of money or deliver shares on the pay-in day? What is rolling settlement ? What is an auction ? What happens if the shares are not bought in the auction ? What happens if I do not get my money or share on the due date? What is a Contract Note

Contract Note is a legal document that confirms the trades done on a particular day on behalf of the client. It establishes a legally enforceable relationship between the client and brokerage house with respect to the settlement of the trades. The Contract Note would show settlement number, order number, trade number, time of trade, quantity and price of the trades, brokerage charged, etc and it would be signed by an authorised person of brokerage house.

What are the additional charges other than brokerage that can be levied on the investor ?

The trading member can charge: 1. Securities Transaction Tax. 2. Service tax as applicable. 3. Transaction charges levied by NSE, Stamp duty and other charges directly attributable to the transaction. Note: The brokerage and service tax will be indicated separately in the contract note.
Top What happens if I could not make the payment of money or deliver shares on the pay-in day?

In case of purchase on your behalf, the brokerage house has the liberty to close out transactions by selling securities in case you fail to make full payment to them for the execution of contract before pay-in day as fixed by Stock Exchange for the concerned settlement period unless you already have an equivalent credit. The shortages in case of sales are met through auction process and the difference in price indicated in Contract Note and price received through auction is paid by member to the Exchange which is then liable to be recovered from the client.
Top What is Rolling Settlement ?

In a Rolling Settlement trades executed during the day are settled based on the net obligations for the day. In NSE and BSE, the trades pertaining to the rolling settlement are settled on a T+2 day basis where T stands for the trade day. Hence trades executed on a Monday are typically settled on the following Wednesday (considering 2 working days from the trade day). The funds and securities pay-in and pay-out are carried out on T+2 day

Top What is an Auction ?

The securities are put up for auction by the Exchange on account of non-delivery of securities by the selling trading member to ensure that the buying trading member receives the securities due to him. The non-delivery by the trading member could arise on account of short delivery. The Exchange purchases the requisite quantity in the Auction Market and gives them to the buying trading member.
Top What happens if the shares are not bought in the Auction ?

If the shares could not be bought in the auction i.e. if shares are not offered for sale in the auction, the transactions are closed out as per SEBI guidelines. The guidelines stipulate that the close out price will be the highest price recorded in that scrip on the exchange in the settlement in which the concerned contract was entered into and upto the date of auction/close out OR 20% above the official closing price on the exchange on the day on which auction offers are called for, whichever is higher. Since in the rolling settlement the auction and the close out takes place during trading hours the reference price in the rolling settlement for close out procedures would be taken as the previous days closing price.
Top What happens if I do not get my money or share on the due date ?

In case the brokerage house fails to deliver to you in time and make the proper payment of money/shares or you have a complaint against the conduct of the broker, you can file a complaint with the respective stock exchange. The exchange is required to resolve all complaints. To resolve the dispute the complainant can also resort to arbitration as provided on the reverse of Contract Note /Purchase or Sale Note. However, if the complaint is not addressed by the Stock Exchanges or is unduly delayed then the complaints along with supporting documents may be forwarded to Secondary Market Department of SEBI. Your complaint would be followed up with the exchanges for expeditious redressal.

https://flip.geojitbnpparibas.com/b2b/help/faq/index.html

http://www.vjondalalstreet.com/stock-market-basics.php

What is the pay-in day and pay-out day? Pay in day is the day when the brokers shall make payment or delivery of securities to the exchange. Pay out day is the day when the exchange makes payment or delivery of securities to the broker. Settlement cycle is on T+2 rolling settlement basis. The exchanges have to ensure that the pay out of funds and securities to the clients is done by the broker within 24 hours of the payout. The Exchanges will have to issue press release immediately after pay out.

Trade Clearing and Settlement in Stock Markets

Clearing and settlement is a post trade activity. Clearing Agencies ensure trading members meet their fund/security obligations. It acts as a legal counter party to all trades and guarantees settlement for all members. The original trade between the two parties is cancelled and clearing corporation acts as counter party to both the parties, thus manages risk and guarantees settlement to both the parties. This process is called novation. It determines fund/security obligations and arranges for pay-in of the same. It collects and maintains margins, processes for shortages in funds and securities. It takes help of clearing members, clearing banks, custodians and depositories to settle the trades. The settlement cycle in India is T+2 days i.e. Trade + 2 days. T+2 means the transactions done on the Trade day, will be settled by exchange of money and securities on the second business day (excluding Saturday, Sundays, Bank and Exchange Trading Holidays). Pay-in and Pay-out for securities settlement is done on a T+2 basis. The following is the summary of trading and settlement process in India.

Investors place orders from their trading terminals. Broker houses validate the orders and routes them to the exchange (BSE or NSE depending on the clients choice) Order matching at the exchange. Trade confirmation to the investors through the brokers. Trade details are sent to Clearing Corporation from the Exchange. Clearing Corporation notifies the trade details to clearing Members/Custodians who confirm back. Based on the confirmation, Clearing Corporation determines obligations. Download of obligation and pay-in advice of funds/securities by Clearing Corporation. Clearing Corporation gives instructions to clearing banks to make funds available by payin time. Clearing Corporation gives instructions to depositories to make securities available by pay-in-time. Pay-in of securities: Clearing Corporation advises depository to debit pool account of custodians/Clearing members and credit its (Clearing Corporations) account and depository does the same. Pay-in of funds: Clearing Corporation advises Clearing Banks to debit account of Custodians/Clearing members and credit its account and clearing bank does the same. Payout of securities: Clearing Corporation advises depository to credit pool accounts of custodians/Clearing members and debit its account and depository does the same. Payout of funds: Clearing Corporation advises Clearing Banks to credit account of custodians/ Clearing members and debit its account and clearing bank does the same. Note: Clearing members for buy order and sell order are different and Clearing Corporation acts as a link here. Depository informs custodians/Clearing members through Depository Participants about pay-in and pay-out of securities.

Clearing Banks inform custodians/Clearing members about pay-in and pay-out of funds. In case of buy order by normal investors Clearing members instruct his DP to credit the clients account and debit its account. The money will be debited (Total settled amount margins paid at the time of trade) from the clients account. In case of sell order by normal investors Clearing members instruct his DP to debit the clients account and credit its account. The money will be credited to the clients account.

In case of trades by mutual fund houses the custodians act as clearing members. Please note that a clearing member is the brokerage firm which acts as a trading member and clearing member of clearing agency where as custodians are only clearing members. Even if the clients dont meet their obligations clearing members are required to meet their obligations to the clearing corporations.