POLICIES AND PROCEDURES

  1. Refusal of orders for penny / illiquid stock

    The stock broker may from time to time limit (quantity/ value)/refuse orders in one or more securities due to various reasons including market liquidity, value of security(ies), the order being for securities which are not in the permitted list of the stock broker / exchange(s) / SEBI. Clients may note that PPWB shall have right to reject the orders placed by the Client and/or put circuit breakers to discourage trades getting executed at unrealistic prices from the current market price of the security or prohibit the Client from trading in penny / illiquid securities which creates artificial liquidity or manipulates prices or to discourage Client from cross/ synchronized trading and PPWB shall not be liable for any loss arising out of non acceptance or rejection of the Client orders for any such reason if the Client fails to give sufficient reason for placing such orders.The client agrees that the trade related losses, if any on account of such refusal or due to delay caused by such limits, shall be borne exclusively by the client alone. The stock broker may require reconfirmation of orders, which are larger than that specified by the stock broker's risk management, and is also aware that the stock broker has the discretion to reject the execution of such orders based on its risk perception.

  2. Setting up client's exposure limits

    PPWB may from time to time at its sole discretion, impose and vary the limits on the orders that client can place through it (including but not limited to exposure limits, turnover limits, limits as to number, value and/kind of securities/ contracts in respect of which buy or sell orders can be placed). PPWB may need to vary or reduce the limits or impose new limits urgently on the basis of its risk perception and other factors considered relevant and PPWB will make all necessary attempts to inform clients of such changes. Further PPWB may as risk containment measure at any time at its sole discretion and without prior notice, prohibit or restrict the client’s ability to place the orders or trade in all of some of securities/ contracts through member. The exposure limits are generally based on the availability of the margin in the client’s account. Margin may be in the form of funds and /or in the form of securities with PPWB. The client shall be permitted to trade upto a predetermined number of times of the margin (the “Multiple”) and the quantum of the Multiple on the margin shall be decided at sole discretion of PPWB.

    The client agrees that trade related losses, if any on account of such refusal or due to delay caused by such review, shall be borne exclusively by the client alone. The stock broker is required only to communicate / advise the parameters for the calculation of the margin / security requirements as rate(s) /percentage(s) of the dealings, through anyone or more approved means or methods such as courier /facsimile / email / voice mails /telephone (telephone includes such devices as mobile phones etc.) including SMS on the mobile phone or any other similar device; by messaging on the computer screen of the client's computer; by informing the client through employees / agents of the stock broker; by publishing /displaying it on the website of the stock broker / making it available as a download from the website of the stock broker or if the circumstances, so require, by radio broadcast / television broadcast /newspapers advertisements etc; or any other suitable or applicable mode or manner. Once parameters for margin / security requirements are so communicated, the client shall monitor his / her / its position (dealings / trades and valuation of security) on his / her / its own and provide the required / deficit margin / security forthwith as required from time to time. The client is not entitled to trade without adequate margin/security and that it shall be his/her/its responsibility to ascertain beforehand the margin/ security requirements for his/her/its orders/trades/deals and to ensure that the required margin/security is made available to the stock broker in such form and manner as may be required by the stock broker. If the client's order is executed despite a shortfall in the available margin, the client shall make up the shortfall immediately. The client further agrees that he/she/it shall be responsible for all orders (including orders that may be executed without the required margin in the client's account) &/or any trade related claim/loss/damage arising out of the nonavailability/shortage of margin /security required by the stock broker & / or exchange & / or SEBI.

    The stock broker is entitled to vary the form (Le., the replacement of the margin / security in one form with the margin / security in any other form, say, in the form of funds instead of shares) & / or quantum & / or percentage of the margin & / or security required to be deposited / made available, from time to time. The margin / security deposited by the client with the stock broker are not eligible for any interest. The stock broker is entitled to include / appropriate any / all payout of funds & / or securities towards margin / security without requiring specific authorizations for each payout.

    The stock broker is entitled to transfer funds &/ or securities from his account for one exchange & / or one segment of the exchange to his / her / its account for another exchange & / or another segment of the same exchange whenever applicable and found necessary by the stock broker. The client also agrees and authorises the stock broker to treat / adjust his/ her / its margin / security lying in one exchange & / or one segment of the exchange / towards the margin / security / pay in requirements of another exchange & / or another segment of the exchange. The stock broker is entitled to disable/freeze the account &/or trading facility/any other service. facility, if, in the opinion of the stock broker, the client has committed a crime/fraud or has acted in contradiction of the Mandatory and Voluntary Client Registration Documents or / is likely to evade / violate any laws, rules, regulations, directions of a lawful authority whether Indian or foreign or if the stock broker so apprehends.

  3. Applicable brokerage rate:

    The stock broker is entitled to charge brokerage within the limits imposed by exchange which at present is as under:

    Brokerage will be charged to the client based on the brokerage rates specified in the account opening form or as per the product/ scheme opted by the client from time to time. Brokerage chargeable to the client will also be communicated to the client through the welcome letter sent at time of account opening. However, any increase in brokerage rate either be done with the consent of the client in writing or at the discretion of PPWB by giving 15 days advance notice to the client.

    1. For Cash Market Segment:

      The maximum brokerage chargeable in relation to trades effected in the securities admitted to dealings on the Capital Market segment of the Exchange shall be 2.5 % of the contract price exclusive of statutory levies. It is hereby further clarified that where the sale / purchase value of a share is Rs.10/ - or less, a maximum brokerage of 25 paise per share may be collected.

    2. For Option contracts:

      Brokerage for option contracts shall be charged on the premium amount at which the option contract was bought or sold and not on the strike price of the option contract. It is hereby clarified that brokerage charged on options contracts shall not exceed 2.5% of the premium amount or Rs 100/- (per lot) whichever is higher.

  4. Imposition of penalty / delayed payment charges

    PPWB requires all its clients to make the payment towards outstanding arising out of trades and/ or ancillary services availed by the client on or before due date. In case of outstanding in account, penal interest will be levied on the client to deter them from delaying the payment in future. The company may charge delay payment charges at 0.05% per day.

    Margins provided by the client in the form of funds and or securities shall be interest free and PPWB shall not be liable to pay any interest on the same. Further where the stock broker has to pay any fine or bear any punishment from any authority in connection with / as a consequence of / in relation to any of the orders / trades / deals / actions of the client, the same shall be borne by the client. The client agrees to pay to the stock broker brokerage, commission, fees, all taxes, duties, levies imposed by any authority including but not limited to the stock exchanges.

  5. The right to sell clients' securities or close clients' positions, without giving notice to the client, on account of non-payment of client's dues. (Limited to Margin/ Settlement Obligations)

    The stock broker maintains centralized banking and securities handling processes and related banking and depository accounts at designated place. The client shall ensure timely availability of funds / securities in designated form and manner at designated time and in designated bank and depository account(s) at designated place, for meeting his/her/its pay in obligation of funds and securities. The stock broker shall not be responsible for any claim/loss/damage arising out of non availability/short availability of funds/securities by the client in the designated account(s) of the stock broker for meeting the pay in obligation of either funds or securities. If the client gives orders / trades in the anticipation of the required securities being available subsequently for pay in through anticipated payout from the exchange or through borrowings or any off market delivery(s) or market delivery(s) and if such anticipated availability does not materialize in actual availability of securities / funds for pay in for any reason whatsoever including but not limited to any delays / shortages at the exchange or stock broker level / non release of margin by the stock broker etc., the losses which may occur to the client as a consequence of such shortages in any manner such as on account of auctions / square off / closing outs etc., shall be solely to the account of the client and the client agrees not to hold the stock broker responsible for the same in any form or manner whatsoever. In case the payment of the margin / security is made by the client, the stock broker shall be at liberty to give the benefit / credit of the same. In case open position (Le. short/long) gets converted into delivery due to non square off because of any reason whatsoever, the client agrees to provide securities/funds to fulfill the payin obligation failing which the client will have to face auctions or internal close outs; in addition to this the client will have to pay penalties and charges levied by exchange in actual and losses, if any. Without prejudice to the foregoing, the client shall also be solely liable for all and any penalties and charges levied by the exchange(s) as applicable and prescribed in the regulations. The stock broker is entitled to prescribe the date and time by which the margin / security is to be made available and the stock broker may refuse to accept any payments in any form after such deadline for margin / security expires. Notwithstanding anything to the contrary in the Mandatory and Voluntary Client Registration Documents or elsewhere, if the client fails to maintain or provide the required margin/ fund / security or to meet the funds/margins/ securities pay in obligations for the orders / trades / deals of the client within the prescribed time and form, the stock broker shall have the right without any further notice or communication to the client to take any one or more of the following steps:

    1. To withhold any payout of funds / securities.
    2. To withhold / disable the trading / dealing facility to the client.
    3. To liquidate one or more security(s) of the client by selling the same in such manner and at such rate which the stock broker may deem fit in its absolute discretion. It is agreed and understood by the client that securities here includes securities which are pending delivery / receipt.
    4. To liquidate / square off partially or fully the position of sale & / or purchase in anyone or more securities / contracts in such manner and at such rate which the stock broker may decide in its absolute discretion.
    5. To take any other steps which in the given circumstances, the stock broker may deem fit. The client agrees that the trade related loss(s) if any, on account of anyone or more steps as enumerated herein above being taken by the stock broker, shall be borne exclusively by the client alone and agrees not to question the reasonableness, requirements, timing, manner, form, pricing etc., which are chosen by the stock broker.

  6. Shortages in obligations arising out of internal netting of trades.

    1. The client may not receive shares on T+1 / T+2 in case there is an internal shortage situation with PPWB i.e. the buyer and seller are both PPWB clients and the seller defaults in delivery due to which the buyer may not receive the shares.
    2. In case of an internal shortage firstly the defaulting seller would be debited with a closing price of the T day or T+1 day whichever is higher plus upto 30% for the default till such time the auction process or close out process is completed.
    3. Additionally brokerage, statutory costs and other incidental charges including penalty for non-delivery may be debited to the client.
    4. In case of internal Shortage of physically settled Derivatives contracts, there will be compulsory close out price +10% of the closing price of the pay-in date. The amount will be debited to seller and credit will be given to Buyer. PPWB may also levy charges on the defaulting seller for non-delivery of stocks within the stipulated time.
  7. Conditions under which a client may not be allowed to take further position or the broker may close the existing position of a client.

    Under following circumstances a client may not be allowed to take further position and if required the existing position in his account may be also be closed:
    1. If there is a continuous debit Balance in client’s account.
    2. If there is insufficient margin in client’s account required to maintain his open position.
    3. PPWB retains the right to block the client to take a position in certain specified scrips basis the risk management systems of PPWB.
    4. If client is not responding satisfactorily to the Company / regulatory enquiry on trades undertaken by him explaining the rationale for transactions or fails to provide documents to prove beneficial ownership of shares, submit proof of income/ Net worth etc.
    5. If there is an order by SEBI or any other appropriate authority debarring the client from dealing in securities market or an order to suspend/seize client’s account.
    6. In case the scrip or member limits are breached or likely to be breached in the Derivatives Market Segment.
    7. In case where suspicious transactions are observed, including but not limited to off market transactions.
    8. In case of dormant/inactive account and
    9. At the discretion of the company by giving written notice to the client.

    In the event of death or insolvency of the client, winding up or liquidation or the client otherwise becoming incapable of receiving and paying for or delivering or transferring securities which the client has ordered to be bought or sold, the Stock Broker may close out the transaction of the client and the client or his legal representative as the case shall be liable for any losses, costs and be entitled to any surplus which may result there from.

  8. Deregistering a client :

    Notwithstanding anything to the contrary stated in the arrangement, PPWB shall be entitled to terminate the arrangement with immediate effect in any of the following circumstances:
    1. If the action of the client are prima facie illegal improper or such as to manipulate the price of any securities or disturb the normal/proper functioning of securities either alone or in conjunction with others;
    2. If there is commencement of any legal proceedings against the client under any law in force;
    3. On the death/lunacy or other disability of the client;
    4. If the client being a partnership firm, steps taken by the client and/or its partners for dissolution of the partnership;
    5. If the client suffers any adverse material change in his/her/ its financial position or defaults in any other/arrangement with PPWB;
    6. If there is reasonable apprehension that the client is unable to pay its debts or the client has admitted its inability to pay its debts, as they become payable;
    7. If the client is in breach of any terms, condition or covenant of this arrangement;
    8. If the client has made any material misrepresentation of facts, including (without limitation) in relation to the security;
    9. If a receiver, administrator or liquidator has been appointed or allowed to be appointed of all or any part of the undertaking of the client;
    10. If the client have taken or suffered to be taken any action for its reorganization, liquidation or dissolution;
    11. If the client has voluntarily or compulsorily become the subject of proceedings under any bankruptcy or insolvency law or being a company, goes into liquidation or has a receiver appointed in respect of its assets or refers itself to the Board of Industrial and Financial Reconstruction or under any other law providing protection as a relief undertaking;
    12. If the covenant or warranty of the client is incorrect or untrue in any material respect;
    13. On the order from the appropriate authority;
    14. In accordance with the provisions of arrangement entered into with the client
  9. Temporarily suspending or closing a client’s account at the client’s request :

    A client can request for temporary suspending or for permanent closing his account. For permanent closure, client has to give a notice of one month and clear the dues, if any, in his account. Client account may be suspended by the company at any time:
    1. On directions received from any regulatory authorities.
    2. If client is not responding to the queries raised by the company related to his trade activities.
    3. If there is not a single active demat account linked to trading account.
    4. Due to any other non compliance observed in the account.
  10. Policy on inactive (dormant) Account:

    For Trading Accounts:The term In-active/dormant trading account refers to such trading account where no transaction have been carried out in the client's trading account for a period of last 12 months from the date of last transaction across all exchanges or from account opening date.

    The following process shall be followed for inactive accounts.

    Sr no.

    Situation

    Action to be taken

    1

    No trades carried out by the client in the last 12 (Twelve) months across all Exchanges

    Mark/Flag the client as 'Inactive' in back office and UCC records of Exchange.

    2

    Client approaches for activation within one year of the client being marked/flagged as 'Inactive'

    We shall ensure that the basic details of such client like Address, Mobile number, Email ID, Bank/DP account are updated in the records as well in the UCC records of the Exchange. In case there is a change in details, fresh documents to be submitted by the client. Account will be activated after receiving confirmation from client to activate the account.

    3

    After completion of a period of 1 year of the client being flagged as 'Inactive'

    Fresh documentation, due diligence and IPV to be undertaken.

    In case of transactions in IPO/MF and DP, fresh documentation, due diligence, and IPV will not be required.

    For Demat Accounts:

    The Demat accounts wherein no transaction had taken place for a continuous period of 12 (twelve) months shall be flagged as Dormant accounts.

    Additional due diligence would be observed over and above the normal verification procedure while processing debit transactions in such accounts. The transaction shall also be verified with the Beneficial owner in case of high value debits and the details of the process, date, time, etc., of the verification on the instruction slip shall be recorded under the signature of the depository official.

Risk Management Policy

  1. Background

    The Regulators mandate members to have a prudent system of risk management to protect themselves from client defaults. The same should be well documented and be made accessible to all the stakeholders. Risk Management System (RMS) function includes:
    • To define clear procedure for risk management of clients in Equities & Derivatives.
    • To check capital adequacy for exposure and requirements of the client.
    • Monitoring of Clients Order, Pattern of Trades, Order rejections, increasing of Exposure/limits.
    • Monitoring MTM profit/loss incurred out of trades.
    • Margin v/s Exposure of client.
    • Decision taking with regard to squaring off positions on account of MTM loss or Margin shortfalls or any other reasons that may come across.
    • Other monitoring procedures.
  2. Objective

    • To identify various risk areas to which PhonePe Wealth Broking Private Limited (PPWB) may get exposed in the normal course of broking business.
    • To build in process checks/controls to mitigate / minimize the risk exposure.
  3. Products Offered

    • Delivery Trading (i.e. Long Term - Cash and Carry (CNC))
    • Intraday Trading (i.e. Intraday Square-off (MIS))
    • Futures and Options (i.e. Carry and Intraday)
  4. Acceptable Collaterals

    Clients are required to provide liquid assets, which adequately cover various margin requirements. Liquid assets of the client which may include Cash component or any other acceptable collateral to get the trading limits. The client can provide cash and non-cash collateral.
    1. Cash Component:

      • Net Client Ledger Balance:
        Net Client Ledger Balance including funds payin during the day across all segments and Exchanges and Credit entry passed in Client ledger towards securities for which any delivery obligation is already provided by the client and Early Pay-In (EPI) to the Exchange has been done upto the Exchange prescribed guidelines and limits.
      • Fixed Deposits
      • Bank Guarantees

    2. Non Cash Component:

      1. Securities

        PPWB may accept approved securities as defined by the Exchange and / or Non-Approved Securities, at the discretion of Risk Team, after applying appropriate haircut.
        Approved securities are liquid Securities ,in dematerialized format, actively traded on the national exchanges, which are specifically not declared as illiquid shall be pledged as margins, as per the pledging/ re-pledging mechanism specified by SEBI/NSDL/CDSL/CC from time to time.

        Appropriate Haircut, equal to Value at Risk (VAR) margin or such higher percentage as prescribed by the PPWB from time to time, shall be applied to the closing price of the securities as prescribed by Exchange. Value of securities, after consideration of appropriate haircut, shall be considered as value of securities pledged.

        Collateral Margin shall not be considered for equity delivery positions (Cash and Carry product) and Options Buy carried forward positions.

        PPWB shall reserves the right to re-pledge the approved securities to the Clearing Corporations. In case the client defaults, PPWB and/or the Clearing Corporations shall be entitled to invoke securities pledged by the client.

      2. Mutual Funds

        List of approved Mutual Funds is specified by the Clearing Corporation from time to time. Clients shall be permitted to pledge an open ended Mutual Fund units available in demat form as Collateral.

        Appropriate Haircut, equal to Value at Risk (VAR) margin or such higher percentage as prescribed by the PPWB from time to time, shall be applied to the closing NAV of the Mutual Fund Units as prescribed by Exchange / AMFI.
        The collateral value of Mutual Fund units shall be arrived at after deduction of Haircut. Also the total value of Mutual Funds provided as non-cash portion (Collateral) has certain Member level limits as per Clearing Corporation. Hence, client shall be unable to pledge mutual funds/securities above the said limit.

        In case of others (Mutual Funds not listed) the haircut will be as prescribed by Risk team

        Valuation Rate of Scrips/ Exchange Traded Funds for margin reporting purpose

        Valuation based on T-1 day rate as per NSE Bhavcopy. In case, scrip is not listed on NSE or not traded on NSE, then valuation rate as per BSE Bhavcopy shall be applied.

        Valuation Rate of Other Mutual Funds (MF) i.e. not listed on Exchange:MF units which are neither listed on NSE or BSE shall be valued as per AMFI NAV file of T-1 day.

  5. Setting up Client's Exposure Limits for all segments

    PPWB may, from time to time impose and vary limits on the orders that the client can place through the PPWB’s trading system (including exposure limits, turnover limits, limits as to the number, value in respect of which orders can be placed etc.). The client is aware and agrees that the PPWB may, need to vary or reduce the limits or impose new limits urgently on the basis of the PPWB’s risk perception and other factors considered relevant by the PPWB including but not limited to limits on account of Exchange/ SEBI directions/limits and the PPWB may be unable to inform the client of such variation, reduction or imposition in advance. The client agrees that the PPWB shall not be responsible for such variation, reduction or imposition or the client's inability to route any order through the PPWB's trading system on account of any such variation, reduction or imposition of limits.

    The client further agrees that the PPWB may refuse to execute / allow execution of orders or change limits set by PPWB/ Exchange / SEBI and any other reasons which the PPWB may deem appropriate in the circumstances. The client agrees that the losses, if any, on account of such refusal or delay caused by such review, shall be borne exclusively by the client alone

    While computing and reporting the available margin following parameter consider‐
    • Clear credit lying in client's settlement and margin ledger account.
    • Value of Securities Pledge (after haircut) including Pool account to the extent of Exchange guidelines as prescribed from time to time.
    • Any successful online funds transfer.
    • Credit entry for EPI passed in client ledger.
    • In case of Futures, Clients shall be allowed to trade only up to the applicable client wise position limits set by the Exchanges/Regulators from time to time.

    Kindly Note:-
    1. The exposure limits can be increased or decreased on the basis of clients profile & PPWB’s risk appetite.
    2. In addition to above, PPWB may apply specific scrip wise Margin as prescribed by Exchange from time to time.

    PPWB shall not be responsible for any delay/non-receipt of link/OTP from depositories for creation of pledge or non-confirmation of pledge request by the client or due to any other issue at depository as well as at PPWB’s end.

    Sr. No.ParticularsLimits
    1Intraday LimitsIntra-day existing available limits will be available to the extent of (VaR + ELM + Adhoc) % or minimum % as prescribed by the Exchanges in cash segment from time to time and (Span Margin + ELM) % in FO segment. Leverage shall be provided considering scrip wise position and market conditions at the discretion of Risk team from time to time. M to M will be charged over and above available margins as and when required. Any square off on account of an Intra-day transaction would release the blocked margin after adjusting realised losses/charges. Open positions before Close of market will be squared off through Trigger Based or Time based (EOS) process unless specifically squared off by the risk team depending on shortfall in margin or due to other risk parameters.
    2Carry ForwardClients with sufficient Cash balance shall be allowed to Carry Forward their positions depending upon the product subscribed by the client
    For F&O, client can carry forward their positions after giving sufficient margin in the form of Cash and/ or Collaterals.
    3Square off Criteria and Timing
    1. Time based square off: All Intraday Cash and F & O positions shall be squared off on daily basis either at predefined timeline or risk team reserves the right to square off trades at any time during the market hours at their sole discretion
    2. MTM square off: At any given point in time if the MTM level of the client breaches 50% minimum or as defined by the risk team of his available margin, the risk team would square off the relevant positions of the client. The final discretion will be of the Risk Team at all the times.
    3. Margin square off: if clients does not clear settlement / margin shortfall within the stipulated time.
    4. ADHOC Square off: It may be initiated due to conditions such as stock hitting circuit, physical delivery, market circuit etc. at the discretion of the risk team

    Note: It would be client responsibility to ensure that sufficient margin is available at all the times.

  6. Setting up Terminal Level Limits

    Trading Terminals are allotted to PPWB by Exchanges. These CTCL / IML terminals enable PPWB to place, modify and execute orders on behalf of clients. There may be instances where due to punching error or technical issues, unusual orders may be placed at high prices which might lead to execution of unrealistic orders or orders being executed at unrealistic prices. In cases where the order/price of such orders is high, it might lead to huge losses to PPWB. In order to avoid such a situation, it is imperative that certain limits are prescribed for each terminal allotted to PPWB.
    PPWB shall ensure documentation of internal controls on areas like order modification / cancellation, client code changes and post-trade activities are in place and are being updated from time-to-time.

    The following limits shall be defined for each terminal:
    • Quantity Limit for each order
    • In cases where a large trade is to be done, dealer can intimate the Risk Team of the higher limit requirement and the Risk Team can raise the limit accordingly.
    • Value Limit for each order
    • Turnover Limit for each user ID
    • Pending Order Limit for each ID
    • Member Level Turnover Limit
    • Spread Order Quantity and Value Limit (For all Segment) Checks in place
    • A dedicated Risk monitoring team to monitor the exposure, limit, etc.
    • RMS Terminal which has a facility to block the client as well as restrict to use over exposure.
    • Terminals limits will be set up by the Front Office official designated at Correspondence Office.
    • No user will be provided unlimited limit.
    • Limits shall be monitored on daily basis, taking following criteria’s: Turnover, Exposure, past trends, Location, Deposit/Collateral, etc.
    • Any other limits as prescribed by Exchanges from time to time.

    1. Trading in New Listing:

      Newly listed shares (usually do not have any DPR), shares are subject to the high market risks. Dealing in these securities will be allowed after verification of credit balance and M-to-M levels and shall also be subject to certain conditions as it may deem fit and proper in its absolute discretion.

      Risk team shall restrict Order Quantity/Value for IPO/OFS on the day of listing. Also Margin / Limits shall be set for the same considering various factors like size of IPO, allotment, floor price, etc. by Risk team.

    2. Trading in Illiquid Scrips/Penny Stocks:

      As a part of Due Diligence, Illiquid Securities/Trade to Trade shares/Penny Stocks and Scrips with less volume in FO segment may be restricted by Risk team. The list of such Restricted Scrips shall also include GSM/ASM/SMS List and will change from time to time.

  7. Order Receipt & Execution:

    • All orders routed through RMS are monitored by PPWB’s risk department and after confirmation about client’s margin status (availability of prescribed margin), order shall get executed.
    • Clients can enter trades primarily through PhonePe App and / or web browser. Order confirmation screen is displayed in order to confirm the trade details entered. Further, trade executed only if all the parameters are complied for execution else the trade will be rejected.
    • The dealers shall take utmost care while executing the trades of the clients regarding the accuracy of Client Code, Quantity and Price etc. The orders from the clients are promptly executed by the dealers and the order confirmation of the placement of the orders is immediately provided to the clients. Moreover, only registered dealers are allowed to enter the dealing room for placing the orders.
    • Any communication gap in receiving orders from the client also poses a risk to the PPWB. Accordingly, order from clients shall be received only through such means of communication which leave an audit trail.
      PPWB shall execute trades of clients only after keeping evidence of the client placing such order; it could be, inter alia, in the form of:
      • Physical record written & signed by client,
      • Telephone recording,
      • Email from authorized email id,
      • Log for internet transactions,
      • Record of SMS messages,
      • Any other legally verifiable record.
    • Further, wherever the order instructions are received from clients through the telephone, the PPWB shall mandatorily use telephone recording system to record the instructions and maintain telephone recordings as part of its records
    • A record of error trades will be kept separately and authorisation will be taken from authorised personnel for such orders.
    • Specific Orders :
      Bulk / Block deal: Prior approval from Risk & compliance shall be required. Bracket Order and Cover Order (BO & CO): It shall be permitted subject to restrictions. Risk team will clearly specify scrip, quantity and value restrictions with respect to BO & CO orders in Cash and FO segment during market hours
      After Market Orders (AMO) Orders: It shall be allowed for pre-fixed timings by Risk team and shall be subject to Minimum Order Value. Such orders will stand cancelled if placed without sufficient margin. AMO orders will be revalidated by Risk team before they are placed in Market.
  8. Monitoring of Debit Balances

    Clients can enter trades primarily through PPWB’s App and web browser. One of the parameter for acceptance of client’s trade is subject to availability of sufficient funds, else the trade order is rejected upfront. Hence, the possibility for clients with debit balances will not arise.

    Further, in exceptional situation ,due to technical issues, trade order are dealers punched then, there is a system for monitoring client debit balances, if any, on a daily and online basis. Risk team to monitor the debtors as well as asking for the margin money are deployed.

    Clients can be followed up either by PN notification, sending SMS or e-mails:
    • No further exposure is allowed if debit balance continues for 5 days from the date of payin.
    • In case full payment not received from the client, Risk team may retain those securities in CUSPA account as per SEBI guidelines.
  9. Margin Collection Procedure (CM Segment)

    • Client limits are allowed as per margin norms of the relevant Exchanges. Clients are required to provide upfront margin in the form of funds or Securities before any trade as per the discretion of Risk team
    • PPWB shall take proper and adequate margin from clients and shall allow to carry forward positions as per the Exchanges/SEBI norms and guidelines. At the end of the day, shortage of client margin is calculated and reported to the Exchanges. During the trading hours, if any short margin observed, Risk team may square off the positions of the client.
  10. Margin Collection Procedure (FO Segment)

    In this segment, the Exchanges stipulate that every position taken should be based on the available initial margin. Apart from the initial margin, Exchanges have introduced exposure margin in order to meet the market volatility and risk associated.

    Based on the requirements of Exchanges, PPWB insists that all the clients in F&O segment should have sufficient margins (Span + Exposure margin) for taking position in the F&O segment. The margin should either be clear credit balance or in the form of collaterals i.e. Value of securities (after applying appropriate haircut) accepted as collateral from the clients by way of ‘Margin Pledge’ created in Depository system for the purpose of Margin. Appropriate hair cut would be applicable for collaterals in the form of Securities before taking the valuation.

    The MTM loss arising in F&O positions need to be paid on the same day (T day) or till T+1 day so that MTM settlement can be performed properly, failing which the positions may be reduced to the available margin level. In order to retain the position in such cases is possible only if Funds are transferred from the client’s bank account either through online banking or Fund Transfer.

    Additional Adhoc Margin (i.e. over & above span margin) may be levied as a risk containment measure to be determined on the basis of market factors and risk factors associated with the securities being traded.

    Options RMS:

    The options carry forward buying position should be allowed against clear credit balance / premium credit. Collaterals, in any form, will not be considered as margin for options buying carry forward positions. For intraday option buying, collateral may be consider by PPWB risk team at their discretion.

    Options selling involve unlimited risk and thereby Exchanges specify high span margin & exposure margin and hence will be allowed only after sufficient margin provided by the client. Deep out of the money options selling may not be entertained and similarly option’s having less liquidity may not be allowed. Risk team may restrict Buying .in Options near month contract on the day of expiry.

    The risk team will have sole discretion to allow or disallow trading in any contract basis risk parameters.

    Physical Settlement in Derivatives:

    A client can request for physical delivery in FO segment only if he brings entire delivery margin on or prior to the expiry day. If the client wants to convert ITM/ATM to physical delivery then client shall bring the required margin as prescribed by the Exchange or PPWB from time to time. In case the required margins are not provided by client then PPWB reserves the right to liquidate the contract without allowing client to convert to physical settlement

    The risk team will have sole discretion to allow or disallow trading in any contract basis risk parameters.

  11. Right to Liquidate Position

    Without prejudice to the stock broker's other rights (including the right to refer a matter to arbitration), the client understands that the stock broker shall be entitled to liquidate/close out all or any of the client's positions for non-payment of margins or other amounts, outstanding debts, etc. and adjust the proceeds of such liquidation/close out, if any, against the client's liabilities/obligations. Any and all losses and financial charges on account of such liquidation/closing-out shall be charged to and borne by the client.

    In the event of death or insolvency of the client or his/its otherwise becoming incapable of receiving and paying for or delivering or transferring securities which the client has ordered to be bought or sold, stock broker may close out the transaction of the client and claim losses, if any, against the estate of the client. The client or his nominees, successors, heirs and assignee shall be entitled to any surplus which may result there from. The client shall note that transfer of funds/securities in favour of a Nominee shall be valid discharge by the stock broker against the legal heir subject to completion of all necessary transmission related formalities.

    Risk Head to decide on the priority of securities to be square off from securities of a client i.e. which scrip is to be liquidated first. Generally, security with highest collateral value will be liquidated first.

  12. CUSPA square off Process

    If client has not paid for the securities purchased then the securities received from Exchange will be transferred to client’s linked demat account and will be pledge in favor of the CUSPA account of the broker. If client does not bring the balance amount then securities will be squared off by RMS team as per the Exchange prescribed guideline or at the discretion of the RMS team. If client brings balance amount within the prescribed timeline then securities will be Unpledge in client demat account.

  13. Disclaimer

    Client agrees and accepts that if for any reason there is system/network issue/Exchange circuits and Trading is halted or open positions could not be squared off, client will not hold PPWB responsible for the losses arising out of the same.

  14. Other Risk Management Mechanism:

    Sr. No.ParticularsLimits
    1.Restricted Scrips & Banned Scrips
    • Securities in BAN Period: No fresh positions will be allowed in Securities declared in BAN period in FO by exchange
    • PPWB reserves the right to refuse execution of trade in below mentioned Restricted Scrips :
      1. Securities in ASM/GSM/SMS List
      2. Securities Restricted as per Internal Policy
    2.Penalty/ Delayed Payment Charges
    • Any delay payment after settlement will attract upto 24% interest p.a. or such other rates as decided from time to time. Further client may not be allowed to take fresh exposure till debit balance is cleared within the Exchange prescribed guideline.
    • Any penalty related to Ban period/Short Margin or any other penalty by the Exchange on transaction will be recovered from the respective client. It will be subject to Exchange regulations and as decided from time to time.
    3.Surveillance

    In case of unethical practices strict action will be taken and the decision will lie solely with the PPWB. Such as:

    • Synchronized trading
    • Off market Transfer to Multiple clients and from multiple to single account
    • Client Script Concentration
    • Profit loss transfer
    • Circular /Insider Trading/Price Rigging is strictly prohibited and subject to action
    4.Single Order Limit

    PPWB reserves the right to restrict order/request above certain value/quantity in respect of certain securities as a part of due diligence.

    5.General
    • No Family adjustment of ledger is allowed.
    • No third party collateral securities will be accepted.
    • No unlimited limits will be given on any Client ID and Dealer ID.

    Note: PPWB Risk team reserves rights to give exceptions/deviations to this policy at their discretion.

  15. Margin Trading Facility - Risk Management

    Clients availing Margin Trading Facility, should maintain margins as per terms agreed upon for availing such facility.

    The stocks deposited as collateral for availing margin trading facility and the stocks purchased under the margin trading facility (Funded stocks) shall be marked separately and monitored on a real time basis. There would be no benefit of the Mark to Market Profit for the MTF position in terms of releasing any limits for trading.

    Client shall pay any shortage in the required margin immediately on receiving demand (margin call) on the trade day failing which PPWB shall be at liberty to liquidate the funded shares and/or collateral shares to recover the outstanding dues

    In case there is a shortfall, margin call would be made on T day. In the normal market condition, it is expected that the client makes good the shortage within T +4 day failing which the position would be liquidated on T+5 day to the extent of margin shortfall or positions may be squared off at the discretion of risk team

    PPWB at its sole discretion reserves the right to withdraw the facility and ask for payments from the client or ask for higher margins depending on the extreme situations.