Annexure A 10.

The stock broker and sub-broker shall maintain all the details of the client
as mentioned in the account opening form or any other information
RIGHTS AND OBLIGATIONS OF STOCK BROKERS, SUB-BROKERS pertaining to the client, confidentially and that they shall not disclose the same
AND CLIENTS to any person/authority except as required under any law/regulatory
as prescribed by SEBI and Stock Exchanges requirements. Provided however that the stock broker may

1. The client shall invest/trade in those securities/contracts/other so disclose information about his client to any person or authority with the
instruments admitted to dealings on the Exchanges as defined in the express permission of the client.
Rules, Byelaws and Regulations of Exchanges/ Securities and Exchange
Board of India (SEBI) and circulars/notices issued there under from timeto MARGINS
time.
11. The client shall pay applicable initial margins, withholding margins, special
2. The stock broker, sub-broker and the client shall be bound by allthe margins or such other margins as are considered necessary by the stock broker
Rules, Byelaws and Regulations of the Exchange and or the Exchange or as may be directed by SEBI from time to time as applicable
circulars/notices issued there under and Rules and Regulations of SEBI to the segment(s) in which the client trades. The stock broker is permitted in its
and relevant notifications of Government authorities as may be in force from sole and absolute discretion to collect additional margins (even though not
time to time. required by the Exchange, Clearing House/Clearing Corporation or SEBI)
and the client shall be obliged to pay such margins within the stipulated time.
3. The client shall satisfy itself of the capacity of the stock broker to deal in
securities and/or deal in derivatives contracts and wishes to execute its orders 12. The client understands that payment of margins by the client does not
through the stock broker and the client shall from time to time continue to necessarily imply complete satisfaction of all dues. In spite of consistently
satisfy itself of such capability of the stock broker before executing orders having paid margins, the client may, on the settlement of its trade, be obliged
through the stock broker. to pay (or entitled to receive) such further sums as the contract may
dictate/require.
4. The stock broker shall continuously satisfy itself about the genuineness and
financial soundness of the client and investment objectives relevantto the TRANSACTIONS AND SETTLEMENTS
services to be provided.
13. The client shall give any order for buy or sell of a security/derivatives contract
5. The stock broker shall take steps to make the client aware of the precise in writing or in such form or manner, as may be mutually agreed between the
nature of the Stock broker’s liability for business to be conducted, including any client and the stock broker. The stock broker shall ensure to place orders and
limitations, the liability and the capacity in which the stock broker acts. execute the trades of the client, only in the Unique Client Code assigned to that
client.
6. The sub-broker shall provide necessary assistance and co-operate with
the stock broker in all its dealings with the client(s). 14. The stock broker shall inform the client and keep him apprised about
trading/settlement cycles, delivery/payment schedules, any changes therein
CLIENT INFORMATION from time to time, and it shall be the responsibility in turn of the client to
comply with such schedules/procedures of the relevant stock exchange where
7. The client shall furnish all such details in full as are required by the stock the trade is executed.
broker in "Account Opening Form” with supporting details, made mandatory by
stock exchanges/SEBI from time to time. 15. The stock broker shall ensure that the money/securities deposited by the client
shall be kept in a separate account, distinct from his/its own account or
8. The client shall familiarize himself with all the mandatory provisionsin account of any other client and shall not be used by the stock broker for
the Account Opening documents. Any additional clauses or documents himself/itself or for any other client or for any purpose other than the purposes
specified by the stock broker shall be non-mandatory, as per terms & conditions mentioned in Rules, Regulations, circulars, notices, guidelines of SEBI
accepted by the client. and/or Rules, Regulations, Bye-laws, circulars and snotice of Exchange.

9. The client shall immediately notify the stock broker in writing if there is any 16. Where Exchange(s) cancels trade(s) suo moto all such trades including the
change in the information in the ‘account opening form’ as provided at the trade/s done on behalf of the client shall ipso facto stand cancelled, stock broker
time of account opening and thereafter; including the informationon winding shall be entitled to cancel the respective contract(s) with client(s).
up petition/insolvency petition or any litigation which may have material
bearing on his capacity. The client shall provide/update the financial information 17. The transactions executed on the Exchange are subject to Rules, Byelaws and
to the stock broker on a periodic basis. Regulations and circulars /notices issued thereunder of the Exchanges
 vis the client and he shall be liable to implement the arbitration awards
where the trade is executed and all parties to such trade shall have made in such proceedings.
submitted to the jurisdiction of such court as may be specified by the
Byelaws and Regulations of the Exchanges where the trade is executed for the 26. The client/stock-broker understands that the instructions issued by an
purpose of giving effect to the provisions of the Rules, Byelaws and Regulations authorized representative for dispute resolution, if any, of the client/stock- broker
of the Exchanges and the circulars/notices issued thereunder. shall be binding on the client/stock-broker in accordance with the letter
authorizing the said representative to deal on behalf of the said client/stock-
BROKERAGE broker.

18. The Client shall pay to the stock broker brokerage and statutory leviesas TERMINATION OF RELATIONSHIP
are prevailing from time to time and as they apply to the Client’s account,
transactions and to the services that stock broker renders to the Client. The 27. This relationship between the stock broker and the client shall be
stock broker shall not charge brokerage more thanthe maximum terminated; if the stock broker for any reason ceases to be a member ofthe
brokerage permissible as per the rules, regulations and bye-laws of the stock exchange including cessation of membership by reason of the stock
relevant stock exchanges and/or rules and regulations of SEBI. broker's default, death, resignation or expulsion or if the certificate is cancelled
by the Board.
LIQUIDATION AND CLOSE OUT OF POSITION
28. The stock broker, sub-broker and the client shall be entitled to terminate
19. Without prejudice to the stock broker's other rights (including the rightto the relationship between them without giving any reasons to the other party,
refer a matter to arbitration), the client understands that the stock broker shall after giving notice in writing of not less than one month to the other parties.
be entitled to liquidate/close out all or any of the client's positions for non- Notwithstanding any such termination, all rights, liabilities and obligations of the
payment of margins or other amounts, outstanding debts, etc. and adjust parties arising out of or in respect of transactions entered into prior to the
the proceeds of such liquidation/close out, if any, against the client's termination of this relationship shall continue to subsist and vest in/be
liabilities/obligations. Any and all losses and financial charges on account of binding on the respective parties or his/its respective heirs, executors,
such liquidation/closing-out shall be charged to and borne by the client. administrators, legalrepresentatives or successors, as the case may be.

20. In the event of death or insolvency of the client or his/its otherwise 29. In the event of demise/insolvency of the sub-broker or the cancellation of his/its
becoming incapable of receiving and paying for or delivering or registration with the Board or/withdrawal of recognition of the sub- broker by
transferring securities which the client has ordered to be bought or sold, stock the stock exchange and/or termination of the agreement withthe sub broker
broker may close out the transaction of the client and claim losses,if any, by the stock broker, for any reason whatsoever, the client shall be informed of
against the estate of the client. The client or his nominees, successors, such termination and the client shall be deemed to be the direct client of
heirs and assignee shall be entitled to any surplus which may result there the stock broker and all clauses in the ‘Rights and Obligations’ document(s)
from. The client shall note that transfer of funds/securities in favor of a governing the stock broker, sub-broker and client shall continue to be in force
Nominee shall be valid discharge by the stock broker against the legal heir. as it is, unless the client intimates tothe stock broker his/its intention to
terminate their relationship by giving a notice in writing of not less than one
21. The stock broker shall bring to the notice of the relevant Exchange month.
the information about default in payment/delivery and related aspects by
a client. In case where defaulting clientis a corporate Director(s) ADDITIONAL RIGHTS AND OBLIGATIONS
/Promoter(s) /Partner(s) /Proprietor as the case may be, shall also be
communicated by the stock broker to the relevant Exchange(s). 30. The stock broker shall ensure due protection to the client regarding client’s
rights to dividends, rights or bonus shares, etc. in respect of transactions
DISPUTE RESOLUTION routed through it and it shall not do anything which is likely to harm the
interest of the client with whom and for whom theymay have had transactions
22. The stock broker shall provide the client with the relevant contact details of the in securities.
concerned Exchanges and SEBI.
31. The stock broker and client shall reconcile and settle their accounts from
23. The stock broker shall co-operate in redressing grievances of the client in time to time as per the Rules, Regulations, Bye Laws, Circulars, Notices
respect of all transactions routed through it and in removing objections for bad and Guidelines issued by SEBI and the relevant Exchanges where the
delivery of shares, rectification of bad delivery, etc. trade is executed.

24. The client and the stock broker shall refer any claims and/or disputes 32. The stock broker shall issue a contract note to his constituents for trades
with respect to deposits, margin money, etc., to arbitration as per the Rules, executed in such format as may be prescribed by the Exchange from time
Byelaws and Regulations of the Exchanges where the trade is to time containing records of all transections including details of order
executed and circulars/notices issued thereunder as may be in force from number , trade number, trade time, trade price, trade quantity,
time to time.

25. The stock broker shall ensure faster settlement of any arbitration
proceedings arising out of the transactions entered into between him vis-à-
 generated by the system at the time of sending the contract notes
shall be maintained by the stock broker for the specified period under the
details of the derivatives contract, client code, brokerage, all charges levied extant regulations of SEBI/stock exchanges. The log report shall provide
etc. and with all other relevant details as required therein to be filled in and the details of the contract notes that are not delivered to the client/e-mails
issued in such manner and within such time as prescribed by the rejected or bounced back. The stock broker shall take all possible steps to
Exchange. The stock broker shall send contract notes to the investors ensure receipt of notification of bounced mails by him at all times within the
within one working day of the execution of the trades inhard copy and/or stipulated time period under the extant regulations of SEBI/stock exchanges.
in electronic form using digital signature.
33. The stock broker shall make pay out of funds or delivery of securities, asthe 41. Receive the contract notes in the electronic form. Wherever the ECNs have not
case may be, to the Client within one working day of receipt of the payout from been delivered to the client or has been rejected (bouncing of mails)by the e-
the relevant Exchange where the trade is executed unless otherwise specified mail ID of the client, the stock broker shall send a physical contract note to
by the client and subject to such terms and conditions as may be prescribed the client within the stipulated time under the extant regulations of SEBI/stock
by the relevant Exchange from time totime where the trade is executed. exchanges and maintain the proof of delivery of such physical contract notes.

34. The stock broker shall send a complete `Statement of Accounts’ for both funds 42. In addition to the e-mail communication of the ECNs to the client, the stock
and securities in respect of each of its clients in such periodicity and format broker shall simultaneously publish the ECN on his designated web-site,
within such time, as may be prescribed by the relevant Exchange, from time if any, in a secured way and enable relevant access to the clients and for
to time, where the trade is executed. The Statement shall also state that the this purpose, shall allot a unique user name and password to the client, with
client shall report errors, if any, in the Statement within such time as may be an option to the client to save the contract note electronically and/or take a print
prescribed by the relevant Exchange from time to time where the trade was out of the same.
executed, from the receipt thereof to the Stock broker.
LAW AND JURISDICTION
35. The stock broker shall send daily margin statements to the clients. Daily
Margin statement should include, inter- alia, details of collateral deposited, 43. In addition to the specific rights set out in this document, the stock broker, sub-
collateral utilized and collateral status (available balance/due from client) with broker and the client shall be entitled to exercise any other rights which the
break up in terms of cash, Fixed Deposit Receipts (FDRs), Bank Guarantee and stock broker or the client may have under the Rules, Bye-laws and Regulations
securities. of the Exchanges in which the client chooses to trade and circulars/notices
issued thereunder or Rules and Regulations of SEBI.
36. The Client shall ensure that it has the required legal capacity to, and is
authorized to, enter into the relationship with stock broker and is capable of 44. The provisions of this document shall always be subject to Government
performing his obligations and undertakings hereunder. All actions notifications, any rules, regulations, guidelines and circulars/notices issued
required to be taken to ensure compliance of all the transactions, which the by SEBI and Rules, Regulations and Bye laws of the relevant stock exchanges,
Client may enter into shall be completed by the Client prior to such tbraensaction where the trade is executed, that may be in force from time to time.
ing entered into. 45. The stock broker and the client shall abide by any award passed by the
Arbitrator(s) under the Arbitration and Conciliation Act, 1996. However,
ELECTRONIC CONTRACT NOTES (ECN) there is also a provision of appeal within the stock exchanges, if either
party is not satisfied with the arbitration award.
37. In case, client opts to receive the contract note in electronic form, he shall provide an
appropriate e-mail id to the stock broker. The client shall communicate to 46. Words and expressions which are used in this document but which are not defined
the stock broker any change in the email-id through a physical letter. If the client herein shall, unless the context otherwise requires, have the same meaning as
has opted for internet trading, the request for change of email id may be made assigned thereto in the Rules, Byelaws and Regulations and circulars/notices
through the secured access by way ofclient specific user id and password. issued thereunder of the Exchanges/SEBI.

38. The stock broker shall ensure that all ECNs sent through the e-mail shall 47. All additional voluntary clauses/document added by the stock broker should
be digitally signed, encrypted, non-tamper able and in compliance with not be in contravention with rules/regulations/notices/circulars of Exchanges/SEBI.
the provisions of the IT Act, 2000. In case, ECN is sent through e-mail Any changes in such voluntary clauses/document(s) needto be preceded by a
asan attachment, the attached file shall also be secured with the digital notice of 15 days. Any changes in the rights and obligations which are
signature, encrypted and non-tamperable. specified by Exchanges/SEBI shall also be brought to the notice of the clients.

39. The client shall note that non-receipt of bounced mail notification by the 48. If the rights and obligations of the parties hereto are altered by virtue of
stock broker shall amount to delivery of the contract note at the e-mail ID change in Rules and regulations of SEBI or Bye-laws, Rules and
of the client. Regulations of the relevant stock Exchanges where the trade is executed, such
changes shall be deemed to have been incorporated herein i
40. The stock broker shall retain ECN and acknowledgement of the e-mail
ina soft and non-tamperable form in the manner prescribed by the
exchange in compliance with the provisions of the IT Act, 2000 and as per
the extant rules/regulations/circulars/guidelines issued by SEBI/Stock
Exchanges from time to time. The proof of delivery i.e., log report
 modification of the rights and obligations of the parties mentioned in this 6. The Client shall immediately notify the Stock broker in writing if he
document. forgets his password, discovers security flaw in Stock Broker’s IBT
System, discovers/suspects discrepancies/ unauthorized access
through his username/password/account with full details of such
Internet & Wireless Technology Based Trading Facility Provided by Stock unauthorized use, the date, the manner and the transactions effected
Broker to the Client pursuant to such unauthorized use, etc.
1. Stock broker is eligible for providing Internet based trading (IBT) and 7. The Client is fully aware of and understands the risks associated with
securities trading through the use of wireless technology that shall include
availing of a service for routing orders over the internet/securities trading
the use of devices such as mobile phone, laptop with data card, etc. which through wireless technology and Client shall be fully liable and responsible
use Internet Protocol (IP). The stock broker shall comply with all requirements
for any and all acts done in the Client’s Username/password in any manner
applicable to internet based trading/securities trading using wireless
whatsoever.
technology as may be specified by SEBI & the Exchanges from time to
time.
8. The stock broker shall send the order/trade confirmation through email to the
client at his request. The client is aware that the order/ trade confirmation is
2. The client is desirous of investing/trading in securities and for this purpose, also provided on the web portal. In case client is trading using wireless
the client is desirous of using either the internet based trading facility or the technology, the stock broker shall send the order/trade confirmation on the
facility for securities trading through use of wireless technology. The Stock device of the client.
broker shall provide the Stock broker’s IBT Serviceto the Client, and the
Client shall avail of the Stock broker’s IBT Service, on and subject to 9. The client is aware that trading over the internet involves many uncertain
SEBI/Exchanges Provisions and the terms and conditions specified on factors and complex hardware, software, systems, communication lines,
the Stock broker’s IBT Web Site provided that they are in line with the norms peripherals, etc. are susceptible to interruptions and dislocations. The Stock
prescribed by Exchanges/SEBI. broker and the Exchange do not make any representation or warranty that
the Stock broker’s IBT Service will be available to the Client at all times
3. The stock broker shall bring to the notice of client the features, risks, without any interruption.
responsibilities, obligations and liabilities associated with securities trading
through wireless technology/internet/smart order routing or any other 10. The Client shall not have any claim against the Exchange or the Stock broker
technology should be brought to the notice of the client by the stock broker. on account of any suspension, interruption, non-availability or malfunctioning
of the Stock broker’s IBT System or Service or the Exchange’s service or
4. The stock broker shall make the client aware that the Stock Broker’s systems or non-execution of his orders due to any link / system failure at the
IBT system itself generates the initial password and its password policy Client / Stock brokers/Exchange end for any reason beyond the control of
as stipulated in line with norms prescribed by Exchanges/SEBI. the stock broker/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 Stock broker’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/securities
trading through wireless technology through order routed system and
undertakes to ensure that the password of the client and/or his
authorized representative are not revealed to any third party including
employees and dealers of the stock broker.
 Annexure C

GUIDANCE NOTE - DO’s AND DON’Ts receipts/deliveries of funds and securities. The statement shall also
FOR TRADING ON THE EXCHANGE(S) FOR INVESTORS explain the retention of funds and securities and the details of the pledged
shares, if any.
BEFORE YOU BEGIN TO TRADE c) On the date of settlement, the stock broker may retain the requisite
1. Ensure that you deal with and through only SEBI registered securities/funds towards outstanding obligations and may also retain the funds
intermediaries. You may check their SEBI registration certificate number expected to be required to meet derivatives margin obligations for next 5 trading
from the list available on www.nseindia.com and http://sebi.gov.in days, calculated in the manner specified by the exchanges.In respect of cash
2. Ensure that you fill the KYC form completely and strike off the blank fieldsin market transactions, the stock broker may retain entire pay-in obligation of
the KYC form. funds and securities due from clients as on date of settlement and for next
3. Ensure that you have read all the mandatory documents viz. Rights and day’s business, he may retain funds/ securities/margin to the extent of
Obligations, Risk Disclosure Document, Policy and Procedure document value of transactions executed on theday of such settlement in the cash
of the stock broker. market.
4. Ensure to read, understand and then sign the voluntary clauses, if any, agreed d) You need to bring any dispute arising from the statement of account or
between you and the stock broker. Note that the clauses as agreed settlement so made to the notice of the stock broker in writing preferably within
between you and the stock broker cannot be changed without your consent. 7 (seven) working days from the date of receipt of funds/securities or
5. Get a clear idea about all brokerage, commissions, fees and other charges statement, as the case may be. In case of dispute, refer the matter in writing to
levied by the broker on you for trading and the relevant provisions/ the Investors Grievance Cell of the relevant Stock exchanges without delay.
guidelines specified by SEBI/Stock exchanges. 14. In case you have not opted for maintaining running account and pay- out
6. Obtain a copy of all the documents executed by you from the stock broker free of funds/securities is not received on the next working day of the receipt of
of charge. payout from the exchanges, please refer the matter to the stock broker. In
7. In case you wish to execute Power of Attorney (POA) in favour of the Stock case there is dispute, ensure that you lodge a complaint in writing immediately
broker, authorizing it to operate your bank and demat account, please refer to with the Investors Grievance Cell of the relevant Stock exchange.
the guidelines issued by SEBI/Exchanges in this regard. 15. Please register your mobile number and email id with the stock broker,to
receive trade confirmation alerts/ details of the transactions throughSMS or
TRANSACTIONS AND SETTLEMENTS
email, by the end of the trading day, from the stock exchanges.
8. The stock broker may issue electronic contract notes (ECN) if specifically
authorized by you in writing. You should provide your email id to the stock IN CASE OF TERMINATION OF TRADING MEMBERSHIP
broker for the same. Don’t opt for ECN if you are not familiar with computers. 16. In case, a stock broker surrenders his membership, is expelled from
9. Don’t share your internet trading account’s password with anyone. membership or declared a defaulter; Stock exchanges gives a public notice
10. Don’t make any payment in cash to the stock broker. inviting claims relating to only the "transactions executed on the trading system"
11. Make the payments by account payee cheque in favour of the stock of Stock exchange, from the investors. Ensure that you lodge a claim with the
broker. Don’t issue cheques in the name of sub-broker. Ensure that you relevant Stock exchanges within the stipulated period and with the
have a documentary proof of your payment/deposit of securities with the supporting documents.
stock broker, stating date, scrip, quantity, towards which bank/ demat account 17. Familiarize yourself with the protection accorded to the money and/or
such money or securities deposited and from which bank/ demat account. securities you may deposit with your stock broker, particularly in the event
12. Note that facility of Trade Verification is available on stock exchanges’ websites, of a default or the stock broker’s insolvency or bankruptcy and the extent
where details of trade as mentioned in the contract note maybe verified. to which you may recover such money and/or securities may be governed
Where trade details on the website do not tally with the details mentioned by the Bye-laws and Regulations of the relevant Stock exchange where the
in the contract note, immediately get in touch with the Investors Grievance Cell trade was executed and the scheme of the Investors’ Protection Fund in force
of the relevant Stock exchange. from time to time.
13. In case you have given specific authorization for maintaining running DISPUTES/ COMPLAINTS
account, payout of funds or delivery of securities (as the case may be), may 18. Please note that the details of the arbitration proceedings, penal action
not be made to you within one working day from the receipt of payout from against the brokers and investor complaints against the stock brokers are
the Exchange. Thus, the stock broker shall maintain running account for you displayed on the website of the relevant Stock exchange.
subject to the following conditions: 19. In case your issue/problem/grievance is not being sorted out by concerned
a) Such authorization from you shall be dated, signed by you only and stock broker/sub-broker then you may take up the matter with the
contains the clause that you may revoke the same at any time. concerned Stock exchange. If you are not satisfied with the resolution of your
b) The actual settlement of funds and securities shall be done by the stock broker, complaint then you can escalate the matter to SEBI.
at least once in a calendar quarter or month, depending on your preference. 20. Note that all the stock broker/sub-brokers have been mandated by SEBI
While settling the account, the stock broker shall send to youa ‘statement of to designate an e-mail ID of the grievance redressal
accounts’ containing an extract from the client ledger for funds and an extract division/compliance officer exclusively for the purpose of registering
from the register of securities displaying all the complaints.
1. Refusal of orders for penny / illiquid stock its own and provide the required / deficit margin / security forthwith as
The stock broker may from time to time limit (quantity/ value)/refuse ordersin one required from time to time.
or more securities due to various reasons including market liquidity, value of The client is not entitled to trade without adequate margin/security and that it
security(ies), the order being for securities which are not inthe permitted shall be his/her/its responsibility to ascertain beforehand the margin/ security
list of the stock broker / exchange(s) / SEBI. Provided furtherthat stock broker requirements for his/her/its orders/trades/deals and to ensure thatthe required
may require compulsory settlement/advance payment of expected settlement margin/security is made available to the stock broker in such form and manner
value/delivery of securities for settlement priorto acceptance/placement of as may be required by the stock broker. If the client's order is executed despite
order(s) as well. The client agrees that the trade related losses, if any on a shortfall in the available margin, the client shall make up the shortfall
account of such refusal or due to delay caused by such limits, shall be immediately. The client further agrees that he/she/it shall be responsible for all
borne exclusively by the client alone. The stock broker may require orders (including orders that may be executed without the required margin in
reconfirmation of orders, which are larger than that specified by the stock the client's account) &/or any trade related claim/loss/damage arising out of
broker's risk management, and is also aware that the stock broker has the the nonavailability/shortage of margin /security required by the stock broker &
discretion to reject the execution of such orders based on its risk perception. / or exchange & / or SEBI.
1. Setting up client's exposure limits and conditions under which a client maynot The stock broker is entitled to vary the form (Le., the replacement of the
be allowed to take further position or the broker may close the existing
position of a client. The stock broker may from time to time impose and vary limits margin / security in one form with the margin / security in any other form,say,
on the orders that the client can place through the stock broker's trading in the form of funds instead of shares) & / or quantum & / or percentage
system (including exposure limits, turnover limits, limits as to the number, value of the margin & / or security required to be deposited /made available,
and/or kind of securities in respect of which orders can beplaced etc.). The from time to time.
client is aware and agrees that the stock broker may need to vary or reduce the The margin / security deposited by the client with the stock broker are not eligible
limits or impose new limits urgently on the basis of thestock broker's risk for any interest. The stock broker is entitled to include / appropriate any / all
perception and other factors considered relevant by thestock broker including but payout of funds & / or securities towards margin / security without requiring specific
not limited to limits on account of exchange/ SEBI directions/limits ( such as broker authorizations for each payout.
level/ market level limits in security specific The stock broker is entitled to transfer funds &/ or securities from his account for
/ volume specific exposures etc.) , and the stock broker may be unable to inform one exchange & / or one segment of the exchange to his / her / its account for
the client of such variation, reduction or imposition in advance. Theclient agrees another exchange & / or another segment of the same exchange whenever
that the stock broker shall not be responsible for such variation, reduction or applicable and found necessary by the stock broker.
imposition or the client's inability to route any order through the stock broker's trading The client also agrees and authorises the stock broker to treat / adjust his/her
system on account of any such variation, reduction or imposition of limits. The / its margin / security lying in one exchange & / or one segment of the exchange /
client further agrees that the stock broker may atany time, at its sole discretion towards the margin / security / pay in requirements of another exchange & / or
and without prior notice, prohibit or restrict the client's ability to place orders or another segment of the exchange.
trade in securities through the stock broker,or it may subject any order placed The stock broker is entitled to disable/freeze the account &/or trading
by the client to a review before its entryinto the trading systems and may refuse facility/any other service. facility, if, in the opinion of the stock broker, the client has
to execute / allow execution of orders due to but not limited to the reason of committed a crime/fraud or has acted in contradiction of the Mandatory and
lack of margin / securities orthe order being outside the limits set by stock Voluntary Client Registration Documents or / is likely to evade / violate
broker / exchange/ SEBI andany other reasons which the stock broker may any laws, rules, regulations, directions of a lawful authority whether Indian or
deem appropriate in the circumstances. foreign or if the stock broker so apprehends.
The client agrees that trade related losses, if any on account of such refusal 2. Applicable brokerage rate
or due to delay caused by such review, shall be borne exclusively by the client
The stock broker is entitled to charge brokerage within the limits imposed by
alone. The stock broker is required only to communicate / advisethe parameters
exchange which at present is as under:
for the calculation of the margin / security requirements as rate(s)
/percentage(s) of the dealings, through anyone or more approved means a. For Cash Market Segment:
or methods such as post /speed post / courier / registered post The maximum brokerage chargeable in relation to trades effected in the securities
/registered A.D /facsimile / e- mail / voice mails /telephone (telephone admitted to dealings on the Capital Market segment of the Exchange shall be
includes such devices as mobile phones etc.) including SMS on the 2.5 % of the contract price exclusive of statutory levies. It is hereby further clarified that
mobile phone or any other similar device; by messaging on the computer where the sale / purchase value of a share is Rs.10/ -or less, a maximum brokerage
of 25 paise per share may be collected.
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 b. For Option contracts:
stock broker / making it available as a download from the website ofthe Brokerage for option contracts shall be charged on the premium amount atwhich
stock broker; by displaying it on the notice board of the branch / office through the option contract was bought or sold and not on the strike price ofthe option
which the client trades or if the circumstances, so require,by radio broadcast contract. It is hereby clarified that brokerage charged on options contracts shall
/ television broadcast /newspapers advertisements etc; or any other suitable or not exceed 2.5% of the premium amount or Rs 100/- (per lot) whichever is
applicable mode or manner. higher.
The client agrees that the postal department / the courier company / newspaper 4 . Imposition of penalty / delayed payment charges
company and the e-mail / voice mail service provider and such other The client agrees that any amounts which are overdue from the client towards
service providers shall be the agent of the client. Once parameters for margin trading or on account of any other trade related reason to the stockbroker will be
/ security requirements are so communicated, the client shall monitor his / her / its charged with delayed payment charges at 0.05% per day. The client agrees
position (dealings / trades and valuation of security) on his / her / that the stock broker may impose fines / penalties at 0.05% per day for any
orders / trades / deals / actions of the client which are contrary to the
Mandatory and Voluntary Client Registration Documents / rules / regulations /
 bye laws of the exchange or any otherlaw for the time being in force. Further Client Registration Documents or elsewhere, if the client fails to maintain
where the stock broker has to payany fine or bear any punishment from any or provide the required margin/ fund / security or to meet the funds/margins/
authority in connection with / as a consequence of / in relation to any of the securities pay in obligationsfor the orders / trades / deals of the client within
orders / trades / deals / actionsof the client, the same shall be borne by the client. the prescribed time andform, the stock broker shall have the right without any
The client agrees to pay to the stock broker brokerage, commission, fees, all further notice or communication to the client to take any one or more of the
taxes, duties, levies imposed by any authority including but not limited to the stock following steps:
exchanges. i. To withhold any payout of funds / securities.
5. The right to sell clients' securities or close clients' positions, without giving notice to ii. To withhold / disable the trading / dealing facility to the client.
the client, on account /of non-payment of client's dues. (Limited to Margin/ iii. To liquidate one or more security(s) of the client by selling the same in
Settlement Obligations)
such manner and at such rate which the stock broker may deem fit in its
The stock broker maintains centralized banking and securities handling absolute discretion. It is agreed and understood by the client that securities
processes and related banking and depository accounts at designated place. here includes securities which are pending delivery / receipt.
The client shall ensure timely availability of funds / securities in designated form iv. To liquidate / square off partially or fully the position of sale & / or purchase
and manner at designated time and in designated bank and depository account(s) at in anyone or more securities / contracts in such manner and at such rate which the
designated place, for meeting his/her/its pay in obligation of funds and securities. stock broker may decide in its absolute discretion.
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 v. To take any other steps which in the given circumstances, the stock broker may
designated account(s) of the stock brokerfor meeting the pay in obligation of deem fit. The client agrees that the trade related loss(s) if any, on account of
either funds or securities. If the clientgives orders / trades in the anticipation of anyone or more steps as enumerated herein above being taken by the stock
the required securities being available subsequently for pay in through broker, shall be borne exclusively by the client alone and agrees not to question
anticipated payout from the exchange or through borrowings or any off market the reasonableness, requirements, timing, manner, form, pricing etc., which are
delivery(s) or market delivery(s) and if such anticipated availability does not chosen by the stock broker.
materialize in actual availability of securities / funds for pay in for any reason 6. Shortages in obligations arising out of internal netting of trades.
whatsoever including but not limited to any delays / shortages at the exchange or The settlement of trades at the Stock Exchange/Clearing Corporation is done on a
stock broker level / non release of margin by the stock broker etc., the losses which net basis, settlement number-wise. There are instances where clients carry out
may occur to the client as a consequence of such shortages in any manner such delivery sale transactions but are unable to deliver such stocks towards the
as on account of auctions / square off / closing outs etc., shall be solelyto the settlement of the obligation. If there are counter purchases made by clients of
account of the client and the client agrees not to hold the stock broker responsible Zerodha in the same settlement number, the ensuing non-delivery of shares by
for the same in any form or manner whatsoever. In case the payment of the clients who have sold results in the purchase clients not getting credit for shares.
margin / security is made by the client through a bank instrument, the stock Such a scenario is referred to as an 'Internal Shortage.'
broker shall be at liberty to give the benefit / credit for Zerodha has appointed NSE Clearing Limited (NCL) as our designated Clearing
the same only on the realization of the funds from the said bank instrumentetc. Corporation. NCL is responsible for clearing all trades carried out by Zerodha's
at the absolute discretion of the stock broker. Where the margin /securityis made clients.
available by way of securities or any other property, the stock broker is empowered To facilitate the resolution of internal shortages, we have implemented the "Facility
to decline its acceptance as margin / security & / or to acceptit at such reduced for Voluntary Auction for Internal Shortages." This mechanism allows participants to
value as the stock broker may deem fit by applying haircuts or by valuing it by auction off any internal shortages they may have before facing penalties or forced
marking it to market or by any other method asthe stock broker may deem fit in buy-ins. Zerodha shares with the Stock Exchange a list of all stocks for which a
its absolute discretion. voluntary auction has to be conducted
The stock broker has the right but not the obligation, to cancel all pending
In the event of a short delivery by a client, they will be debited an amount equivalent
orders and to sell/close / liquidate all open positions/ securities / shares at the
to 20% above the closing rate of the day of sale. The securities that were short
pre-defined square off time or when Mark to Market (M-T-M) percentage reaches or
delivered will be purchased from the NSE Clearing Ltd Voluntary Auction Facility on
crosses stipulated margin percentage mentioned on the website, whichever is
the auction day. The purchase consideration, inclusive of all statutory taxes, levies,
earlier. The stock broker will have sole discretion to decide referred stipulated
and fees, will then be transferred to the account of the client who sold and short
margin percentage depending upon the market condition. In the event of such
delivered the securities.
square off, the client agrees to bear all the trade related losses based on actual
executed prices. Furthermore, the provisional margin entry posted on the client's account will be
subsequently reversed.
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 i. In cases where securities cannot be purchased from the voluntary auction due
securities/funds to fulfill the payin obligation failing which the client will have to to any force majeure condition(s), the trades will be settled through a 'closeout.' The
face auctions or internal close outs; in addition to this the client will have to pay closeout amount will be equivalent to the highest price prevailing in the NSE from
penalties and charges levied by exchange in actual and losses, if any. Without the day of trading until the auction day, or 20% above the official closing price on
prejudice to the foregoing, the client shall also be solely liable for all and any the auction day, whichever is higher. This amount will be debited from the client's
penalties and charges levied by the exchange(s). account who sold and did not deliver the securities, and a subsequent credit will be
The stock broker is entitled to prescribe the date and time by which the margin / given to the buyer of the securities who did not receive delivery.
security is to be made available and the stock broker may refuse to accept any ii. Additionally, after the netting off of securities between equity market &
payments in any form after such deadline for margin / security expires. derivative trades, all internal shortages arising out of non delivery of securities will
Notwithstanding anything to the contrary in the Mandatory and Voluntary also be handled via the Voluntary auction mode. In the event that for any unforeseen
reason, we are unable to take part in the voluntary auction, then the transaction will
be completed by the purchase of the shares in the error account with an equivalent
 debit (including charges) being posted to the short delivering client account and the l/We have fully understood the same and do hereby sign the same. These Policies
shares being credited to the account of the purchasing investor. and Procedures may be amended / changed by the broker, provided the change is
7. Conditions under which a client may not be allowed to take further position or the informed to me / us with through anyone or more approved means or methods such
broker may close the existing position of a client. as post / speed post / courier / registered post / registered AD / telegram / e-mail /
voice mails / telephone (telephone includes such devices as mobile phones etc.)
We have margin based RMS System. Client may take exposure up to the
including SMS on the mobile phone or any other similar device; by messaging on
amount of margin available with us. Client may not be allowed to take position
in case of non-availability/ shortage of margin as per our RMS policy of the the computer screen of the client's computer; by informing the client through
company. The existing position of the client is also liable to square off/ close out employees / agents of the stock broker; by publishing / displaying it on the
without giving notice due to shortage of margin / non making of payment for their website of the stock broker / making it available asa download from the
pay-in obligation / outstanding debts. website of the stock broker; by displaying it on the notice board of the branch /
office through which the client trades or if the circumstances, so require, by radio
8. De-registering a client Notwithstanding anything to the contrary stated in the
broadcast / television broadcast / newspapers advertisements etc; or any
Mandatory and Voluntary Client Registration Documents the stock broker shall be
other approved suitable or applicable mode or manner by an advance notice
entitled to terminate the Mandatory and Voluntary Client Registration Documents of 15 days.
with immediate effect in any of the following circumstances:
i. If the action of the Client are prima facie illegal/ improper or such as to I/we agree that the postal department / the courier company /newspapercompany
manipulate the price of any securities or disturb the normal/ properfunctioning and the ev-moiaceil/ mail service provider and such other
of the market, either alone or in conjunction with others. service providers shall be my/our agent. These Policies and Procedures shall
ii. If there is any commencement of a legal process against the Client under always be read along with the Mandatory and Voluntary Client Registration
any law in force. Documents and shall be compulsorily referred to while deciding any
iii. On the death/lunacy or other disability of the Client. dispute / difference or claim between me / us and stock broker before any
iv. If a receiver, administrator or liquidator has been appointed or allowed tobe court of law / judicial / adjudicating authority including arbitrator / mediator etc.
appointed of all or any part of the undertaking of the Client. 9. Temporarily suspending or closing client's account at Client's request
v. If the Client has voluntarily or compulsorily become the subject of On the written request of the client, the client account can be suspended
proceedings under any bankruptcy or insolvency law or being a company, temporarily and can be re-activated on the written request of the client only. During
goes into liquidation or has a receiver appointed in respect of its assets or suspension period, the market transaction will be prohibited. However client’s
refers itself to the Board for Industrial and Financial Reconstruction or under pending settlement can take place. ZERODHA can withhold the payouts of
any other law providing protection as a relief undertaking. client and suspend his trading account due to surveillance action or judicial or /
vi. If the Client being a partnership firm, has any steps taken by the Client and regulatory order/action requiring client suspension. On the written request
and/ or its partners for dissolution of the partnership. of the client, the client account can be closed provided the client adheres to
vii. If the Client have taken or suffered to be taken any action for its formalities for account closure including settlement of all dues in the account and
reorganization, liquidation or dissolution. closing of all open position. If the client wishes to again open a broking account
viii. If the Client has made any material misrepresentation of facts, including(without then the client shall have to complete the KYC and account opening formalities
limitation) in relation to the Security. once again.
ix. If there is reasonable apprehension that the Client is unable to pay its 10. Policy for Dormant Accounts
debts or Client has admitted its inability to pay its debts as they become payable. A Trading Account (irrespective whether having debit or credit balance) shall be
x. If the Client suffers any adverse material change in his / her / its financial classified as dormant account in case there are no transactions for a period in excess
position or defaults in any other agreement with the Stock broker. of 12 (Twelve) calendar months from the last transaction date. The Dormant
xi. If the Client is in breach of any term, condition or covenant of this Accounts shall be frozen for further transaction(s). Transactions here mean any of
Mandatory and Voluntary Client Registration Documents . the following:
a. No purchase or sale transaction in the Cash Segment of NSE & BSE.
xii. If any covenant or warranty of the Client is incorrect or untrue in any
b. No purchase or sale transaction in the Derivative segment of NSE & BSE.
material respect.
However notwithstanding any termination of the Mandatory and Voluntary c. No purchase or sale transaction in the currency derivative segment of NSE.
Client Registration Documents, all transactions made under/pursuant to this d. No Bank Receipts or Payments (Client Funds Pay-in or Pay-out).
Mandatory and Voluntary Client Registration Documents shall be subject to e. Any other Financial or Security transaction as provided on the website or through
all terms and conditions of this Mandatory and Voluntary Client Registration the offline mode affecting the common ledger of the customer maintained in the
Documents and parties to this Mandatory and Voluntary Client Registration back office for ZERODHA.
Documents submit to exclusive jurisdiction of courts of law at the place f. Not logged in with security token.
of execution of this Mandatory and Voluntary Client Registration On classification of any account as dormant account as stated above, ZERODHA will
Documents by Stock Broker. Client Acceptance of Policies and inform the client within seven days of such classification. A dormant account can
Procedures stated here in above: be re-activated on receipt of a request for reactivation along with valid proof of
identity. These policies and procedures can be changed by ZERODHA from time
to time with prior notice of 15 days.
POLICIES AND PROCEDURES
1. Setting up client's exposure limits and conditions under client further agrees that he/she/it shall be responsible for all
which a client may not be allowed to take further position or orders (including orders that may be executed without the
the broker may close the existing position of a client. required margin in the client's account) &/or any trade related
The broker, Zerodha Broking Ltd., may from time to time impose claim/loss/damage arising out of the non-availability/shortage of
and vary limits on the orders that the client can place through the margin required by the broker &/or exchange &/or SEBI/FMC. The
broker's trading system (including exposure limits, turnover limits, broker is entitled to vary the form (i.e., the replacement of the
limits as to the number, value and/or kind of contracts in respect margin in one form with the margin in any other form) &/or
of which orders can be placed etc.). The client is aware and quantum &/or percentage of the margin required to be depos-
agrees that the broker may need to vary or reduce the limits or ited/made available from time to time. The margin deposited by
impose new limits urgently on the basis of the broker's risk the client with the broker is not eligible for any interest. The broker
perception and other factors considered relevant by the broker is entitled to include/appropriate any/all payout of funds towards
including but not limited to limits on account of exchange/SEBI/ margin without requiring specific authorizations for each payout.
FMC directions/limits (such as broker level/market level limits in The broker is entitled to transfer funds from his account for one
contract specific/volume specific exposures etc.) and the broker exchange &/or one segment of the exchange to his/her/its
may be unable to inform the client of such variation, reduction or account for another exchange &/or another segment of the same
imposition in advance. The client agrees that the broker shall not exchange whenever applicable and found necessary by the
be responsible for such variation, reduction or imposition or the broker.
client's inability to route any order through the broker's trading The client also agrees and authorises the broker to treat/adjust
system on account of any such variation, reduction or imposition his/her/its margin lying in one exchange &/or one segment of the
of limits. The client further agrees that the broker may at any time, exchange/towards the margin/security/pay in requirements of
at its sole discretion and without prior notice, prohibit or restrict another exchange &/or another segment of the exchange.
the client's ability to place orders or trade through the broker, or it The broker is entitled to disable/freeze the account &/or trading
may subject any order placed by the client to a review before its facility/any other service/facility, if, in the opinion of the broker, the
entry into the trading systems and may refuse to excute/allow client has committed a crime/fraud or has acted in contradiction
execution of orders due to but not limited to the reason of lack of of the Mandatory and Voluntary Client Registration Documents/is
margin or the order being outside the limits set by broker/ likely to evade/violate any laws, rules, regulations, directions of a
exchange/SEBI/FMC and any other reasons which the broker may legal authority whether Indian or foreign or if the broker so
deem appropriate in the circumstances. The client agrees that apprehends.
trade related losses, if any on account of such refusal or due to
delay caused by such review, shall be borne exclusively by the 2. Applicable brokerage rate
client alone. The broker is required only to communicate/advise Zerodha Broking Ltd. is entitled to charge brokerage within the
the parameters for the calculation of the margin requirements as limits imposed by exchanges from time to time. The brokerage to
rate(s)/percentage(s) of the dealings, through any one or more be charged by Zerodha Broking Ltd. shall be exclusive of all
approved means or methods such as post/speed post/courier/ statutory levies such as services Tax, Stamp duty, SEBI turnover
registered fees, Commodities Transaction Tax and other taxes as they exist
post/registered A.D/facsimile/e-mail/voice mails/telephone from time to time and as they apply to the account and
(telephone includes such devices as mobile phones etc.) including transactions of the Clients and for the services rendered to the
SMS on the mobile phone or any other similar device; by Clients. Any revision in brokerage will be made only after giving 15
messaging on the computer screen of the client's computer; by days notice by way of communication through email and/or
informing the client through employees/agents of the broker; by through the website. It shall however be ensured that the
publishing/displaying it on the website of the broker/making it Brokerage shall not exceed maximum permissi-ble under the
available as a download from the website of the broker; by applicable regulations.
displaying it on the notice board of the branch/office through
which the client trades or if the circumstances, so require, by 3 . Imposition of penalty/delayed payment charges
radio broadcast/television broadcast/newspapers advertisements, The client agrees that any amounts which are overdue from the
etc; or any other suitable or applicable mode or manner. The client client towards trading or on account of any other trade related
agrees that the postal department/the courier com- reason to the broker will be charged with delayed payment
pany/newspaper company and the e-mail/voice mail service charges at 0.05% per day. The client agrees that the broker may
provider and such other service providers shall be the agent of the impose fines/penalties at 0.05% per day for any
client. Once parameters for margin/security requirements are so orders/trades/deals/actions of the client which are contrary to the
communicated, the client shall monitor his/her/its position Mandatory and Voluntary Client Registration
(dealings/trades) on his/her/its own and provide the Documents/rules/regulations/bye laws of the exchange or any
required/deficit margin forthwith as required from time to time. other law for the time being in force. Further where the broker has
The client is not entitled to trade without adequate margins and to pay any fine or bear any punishment from any authority in
that it shall be his/her/its responsibility to ascertain beforehand the connection with/as a consequence of/in relation to any of the
margin requirements for his/her/its orders/trades/deals and to orders/trades/deals/actions of the client, the same shall be borne
ensure that the required margin is made available to the broker in by the client. The client agrees to pay to the broker brokerage,
such form and manner as may be required by the broker. If the commission, fees, all taxes, duties, levies imposed by any
client's order is executed despite a shortfall in the available authority including but not limited to the exchanges.
margin, the client shall make up for the shortfall immediately. The
4.The right to sell clients' securities or close clients' positions, margin/fund/security or to meet the funds/margins/securities pay
without giving notice to the client, on account/of non-payment in obligations for the orders/trades/deals of the client within the
of client's dues. (Limited to Margin/Settlement Obligations) prescribed time and form, the broker shall have the right without
The broker maintains centralized banking and securities handling any further notice or communication to the client to take any one
processes and related banking and depository accounts at or more of the following steps:
designated place. The client shall ensure timely availability of I To withhold any payout of funds/securities.
funds/securities in designated form and manner at designated ii. To withhold/disable the trading/dealing facility to the client.
time and in designated bank and depository account(s) at iii. To liquidate one or more security(s) of the client by selling the
designated place, for meeting his/her/its pay in obligation of funds same in such manner and at such rate which the broker may
and securities. The broker shall not be responsible for any deem fit in its absolute discretion. It is agreed and understood by
claim/loss/damage arising out of non availability/short availability the client that securities here includes securities which are
of funds/securities by the client in the designated account(s) of pending delivery/receipt.
the broker for meeting the pay in obligation of either funds or iv. To liquidate/square off partially or fully the position of sale &/or
securities. If the client gives orders/trades in the anticipation of purchase in anyone or more securities/contracts in such manner
the required securities being available subsequently for pay in and at such rate which the broker may decide in its absolute
through anticipated payout from the exchange or through discretion.
borrowings or any off market delivery(s) or market delivery(s) v. To take any other steps which in the given circumstances, the
and if such anticipated availability does not materialize in actual stock broker may deem fit. The client agrees that the trade related
availability of securities/funds for pay in for any reason whatso- loss(s) if any, on account of anyone or more steps as enumerated
ever including but not limited to any delays/shortages at the herein above being taken by the broker, shall be borne exclusively
exchange or broker level/non release of margin by the broker etc., by the client alone and agrees not to question the reasonableness,
the losses which may occur to the client as a consequence of requirements, timing, manner, form, pricing etc., which are
such shortages in any manner such as on account of auc- chosen by the broker.
tions/square off/closing outs etc., shall be solely to the account of
the client and the client agrees not to hold the broker responsible 5. Shortages in obligations arising out of internal netting of
for the same in any form or manner whatsoever. In case the trades
payment of the margin/security is made by the client through a Broker shall not be obliged to deliver any commodities or pay any
bank instrument, the broker shall be at liberty to give the bene- money to the client unless and until the same has been received
fit/credit for the same only on the realization of the funds from the by the broker from the exchange, the clearing corporation/clearing
said bank instrument etc. at the absolute discretion of the broker. house or other company or entity liable to make the payment and
Where the margin/security is made available by way of securities the client has fulfilled his/her/its obligations first. The policy and
or any other property, the broker is empowered to decline its procedure for settlement of shortages in obligations arising out of
acceptance as margin/security &/or to accept it at such reduced internal netting of trades is as under:
value as the broker may deem fit by applying haircuts or by On the Pay in /Payout date, the short delivering client (the Seller)
valuing it by marking it to market or by any other method as the is debited by an amount equivalent to 10% above the closing rate
broker may deem fit in its absolute discretion. The broker has the of day prior to the pay in/payout day i.e. T+1 day and the
right but not the obligation, to cancel all pending orders and to corresponding buyer will be credited by the equivalent amount.
sell/close/liquidate all open positions/securities at the pre-defined The obligation will be closed out at 10% above the closing
square off time or when Mark to Market (M-T-M) percentage price on the previous day of pay in /pay out (T+1) or highest
reaches or crosses stipulated margin percentage mentioned on rate prevailing from the trading date(T Day) till the closeout day
the website, whichever is earlier. The broker will have sole (T + 2). The broker shall have the right to adopt a policy of its
discretion to decide referred stipulated margin percentage choice for internal shortages arising out of internal netting of
depending upon the market condition. In the event of such square trades and charge to default seller and compensate the
off, the client agrees to bear all the trade related losses based on
impacted purchaser as per the policy. The current procedure
actual executed prices.
for internal shortage may be amended from time to time with
In case open position (i.e. short/long) gets converted into delivery
prospective effect and will be published on the website,
due to non square off because of any reason whatsoever, the
https://zerodha.com.
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 6.Conditions under which a client may not be allowed to
penalties and charges levied by exchange in actual and losses, if take further position or the broker may close the existing
any. Without prejudice to the foregoing, the client shall also be position of a client.
solely liable for all and any penalties and charges levied by the We have margin based RMS System. Client may take exposure
exchange(s). up to the amount of margin available with us. Client may not
The broker is entitled to prescribe the date and time by which the be allowed to take position in case of non-availability/shortage
margin/security is to be made available and the broker may refuse of margin as per our RMS policy of the company. The existing
to accept any payments in any form after such deadline for position of the client is also liable to square off/close out
margin/security expires. Notwithstanding anything to the contrary without giving notice due to shortage of margin/non making of
in the Mandatory and Voluntary Client Registration Documents or payment for their pay-in obligation/outstanding debts.
elsewhere, if the client fails to maintain or provide the required
7. Temporarily suspending or closing client's account at conditions of this Mandatory and Voluntary Client Registration
Client's request Documents and parties to this Mandatory and Voluntary Client
On the written request of the client, the client account can be Registration Documents submit to exclusive jurisdiction of
suspended temporarily and can be re-activated on the written courts of law at the place of execution of this Mandatory and
request of the client only. During suspension period, market Voluntary Client Registration Documents by the broker. Client
transaction will be prohibited. However client9s pending Acceptance of Policies and Procedures stated herein above:
settlement can take place. Zerodha Broking Ltd. can withhold l/we have fully understood the same and do hereby sign the
the payouts of client and suspend his trading account due to same. These Policies and Procedures may be
surveillance action or judicial &/or regulatory amended/changed by the broker, provided the change is
order/action requiring client suspension. On the written request informed to me/us with through anyone or more approved
of the client, the client account can be closed provided the means or methods such as post/speed
client adheres to formalities for account closure including post/courier/registered post/registered AD/telegram/e-
settlement of all dues in the account and closing of all open mail/voice mails/telephone (telephone includes such
position. If the client wishes to again open a broking account devices as mobile phones etc.) including SMS on the
again then the client shall have to complete the KYC and mobile phone or any other similar device; by messaging on the
account opening formalities once again. computer screen of the client's computer; by informing the
client through employees/agents of the broker; by publish-
8. De-registering a client notwithstanding anything to the ing/displaying it on the website of the broker/making it
contrary stated in the Mandatory and Voluntary Client available as a download from the website of the broker; by
Registration Documents the broker shall be entitled to displaying it on the notice board of the branch/office through
terminate the Mandatory and Voluntary Client Registration which the client trades or if the circumstances, so require, by
Documents with immediate effect in any of the following radio broadcast/television broadcast/newspapers advertise-
circumstances: ments etc; or any other approved suitable or applicable mode
ii. If the action of the Client are prima facie illegal/improper or or manner by an advance notice of 15 days.
such as to manipulate the price of any securities or
disturb the normal/ proper functioning of the market, either I/we agree that the postal department/the courier company
alone or in conjunction with others. /newspaper company and the e-mail/voice mail service
ii. If there is any commencement of a legal process against the provider and such other service providers shall be my/our
Client under any law in force. agent. These Policies and Procedures shall always be read
iii. On the death/lunacy or other disability of the Client. along with the Mandatory and Voluntary Client Registration
iv. If a receiver, administrator or liquidator has been appointed Documents and shall be compulsorily referred to while
or allowed to be appointed of all or any part of the undertaking deciding any dispute/difference or claim between me/us and
of the Client. stock broker before any court of law/judicial/adjudicating
authority including arbitrator/mediator etc.
v. If the Client has voluntarily or compulsorily become the
subject of proceedings under any bankruptcy or insol-
vency law or being a company, goes into liquidation or has 9. Policy for dormant accounts
a receiver appointed in respect of its assets or refers itself to A Trading Account (irrespective whether having debit or credit
the Board for Industrial and Financial Reconstruction or under balance) shall be classified as dormant account in case there
any other law providing protection as a relief undertaking. are no transactions for a period in excess of 12 (Twelve)
vi. If the Client being a partnership firm, has any steps taken by calendar months from the last transaction date. The Dormant
the Client and/or its partners for dissolution of the partnership. Accounts shall be frozen for further transaction(s).
vii. If the Client have taken or suffered to be taken any Transactions here mean any of the following:
action for its reorganization, liquidation or dissolution. a. No purchase or sale transaction in the Derivative segment of
viii. If the Client has made any material misrepresentation of MCX or NCDEX.
facts, including (without limitation) in relation to the Security. b. Any other Financial or Security transaction as provided on
ix. If there is reasonable apprehension that the Client is the website or through the offline mode affecting the common
unable to pay its debts or Client has admitted its inability to ledger of the customer maintained in the back office for
pay its debts as they become payable. Zerodha Broking Ltd.,.
x. If the Client suffers any adverse material change in c. Not logged in with security token.
his/her/its financial position or defaults in any other agreement On classification of any account as dormant account as stated
with the broker. above, Zerodha Broking Ltd., will inform the client within seven
xi. If the Client is in breach of any term, condition or days of such classification. A dormant account can be re-
covenant of this Mandatory and Voluntary Client Registration activated on receipt of a request for reactivation along with
Documents. valid proof of identity. These policies and proce-dures can be
xii. If any covenant or warranty of the Client is incorrect changed by Zerodha Broking Ltd., from time to time with prior
or untrue in any material respect. notice of 15 days.
However notwithstanding any termination of the Mandatory
and Voluntary Client Registration Documents, all transactions
made under/pursuant to this Mandatory and Voluntary Client
Registration Documents shall be subject to all terms and
RISK DISCLOSURE DOCUMENT Annexure 2

The Exchange does not expressly or impliedly, guarantee nor I Risk of Higher Volatility
make any representation concerning the completeness, the Volatility refers to the dynamic changes in price that security/
adequacy or accuracy of this disclosure documents nor has the derivative contracts undergo when trading activity continues on
Exchange endorsed or passed any merits of participating in the the Exchanges.
Commodity Derivatives/trading. This brief statement does not Generally, higher the volatility of a security/derivatives contract,
disclose all of the risks and other significant aspects of trading. greater is its price swings. There may be normally greater
You should, therefore, study derivatives trading carefully before volatility in thinly traded
becoming involved in it. security/derivatives contracts than in actively traded commodi-
ties/contracts. As a result of volatility, your order may only be
In the light of the risks involved, you should undertake transac- partially executed or not executed at all, or the price at which your
tions only if you understand the nature of the contractual relation- order got executed may be substantially different from the last
ship into which you are entering and the extent of your exposure traded price or change substantially thereafter, resulting in real
to risk. losses.

You must know and appreciate that trading in equity shares, ii. Risk of Lower Liquidity
commodity futures contracts/derivatives or other instruments a. Liquidity refers to the ability of market participants to buy and/or
traded on the Commodity Exchange(s), which have varying sell security/derivatives contract expeditiously at a competitive
element of risk, is generally not an appropriate avenue for price and with minimal price difference. Generally, it is assumed
someone of limited resources/ limited investment and/or trading that more the number of orders available in a market, greater is the
experience and low risk tolerance. You should, therefore, carefully liquidity. Liquidity is important because with greater liquidity, it is
consider whether such trading is suitable for you in the light of easier for investors to buy and/or sell security/derivatives
your financial condition. In case, you trade on the contracts swiftly and with minimal price difference and as a result,
Exchange and suffer adverse consequences or loss, you shall be investors are more likely to pay or receive a competitive price for
solely responsible for the same and the Exchange shall not be security/derivatives contracts purchased or sold. There may be a
responsible, in any manner whatsoever, for the same and it will risk of lower liquidity in some security/derivatives contracts as
not be open for you to take the plea that no adequate disclosure compared to active security/derivatives contracts. As a result,
regarding the risks involved was made or that you were not your order may only be partially executed, or may be executed
explained the full risk involved by the concerned member. The with relatively greater price difference or may not be executed at
Client shall be solely responsible for the consequences and no all.
contract can be rescinded on that account. b. Buying/Selling without intention of giving and/or taking delivery
of certain commodities may also result into losses, because in
You must acknowledge and accept that there can be no guarantee such a situation, security/derivatives contracts may have to be
of profits or no exception from losses while executing orders for squared-off at a low/high prices, compared to the expected price
purchase and/or sale of a security/derivatives being traded on the levels, so as not to have any obligation to deliver/receive such
Exchange. commodities.

It must be clearly understood by you that your dealings on the iii. Risk of Wider Spreads
Exchange through a member shall be subject to your fulfilling Spread refers to the difference in best buy price and best sell
certain formalities set out by the member, which may, inter alia, price. It represents the differential between the price of buying a
include your filing the know your client form and are subject to security/derivatives and immediately selling it or vice versa.
Rules, Byelaws and Business Rules of the Exchange guidelines Lower liquidity and higher volatility may result in wider than
prescribed by SEBI from time to time and circulars as may be normal spreads for less liquid or illiquid commodities/security/
issued by the Exchange from time to time. derivatives contracts. This in turn will hamper better price
formation.
The Exchange does not provide or purport to provide any advice
and shall not be liable to any person who enters into any business iv. Risk-reducing orders
relationship with any member of the Exchange and/or third party a. Most of the Exchanges have a facility for investors to place
based on any information contained in this document. Any <limit orders=, <stop loss orders= etc. Placing of such orders (e.g.
information contained in this document must not be construed as <stop loss= orders or <limit= orders) which are intended to limit
business advice/investment advice. No consideration to trade losses to certain amounts may not be effective many a time
should be made without thoroughly understanding and reviewing because rapid movement in market conditions may make it
the risks involved in such trading. If you are unsure, you must impossible to execute such orders.
seek professional advice on the same. b. A <market= order will be executed promptly, subject to
availability of orders on opposite side, without regard to price and
In considering whether to trade, you should be aware of or must that while the customer may receive a prompt execution of a
get acquainted with the following:- <market= order, the execution may be at available prices of
outstanding orders, which satisfy the order quantity, on price time
1. Basic Risks involved in the trading of Commodity Futures priority. It may be understood that these prices may be signifi-
Contracts and other Commodity Derivatives Instruments on the cantly different from the last traded price or the best price in that
Exchange. security/derivatives contract.
c. A <limit= order will be executed only at the <limit= price specified 2. As far as Futures Commodity Derivatives are concerned,
for the order or a better price. However, while the client received please note and get yourself acquainted with the following
price protection, there is a possibility that the order may not be additional features:-
executed at all.
d. A stop loss order is generally placed "away" from the current 2.1 Effect of "Leverage" or "Gearing":
price of a security/derivatives contract, and such order gets
activated if and when the contract reaches, or trades through, the a. The amount of margin is small relative to the value of the
stop price. Sell stop orders are entered ordinarily below the current security/derivatives contract so the transactions are 'leveraged' or
price, and buy stop orders are entered ordinarily above the current 'geared'. Commodity Derivatives trading, which is conducted with
price. When the contract approaches pre-determined price, or a relatively small amount of margin, provides the possibility of
trades through such price, the stop loss order converts to a great profit or loss in comparison with the principal investment
market/limit order and is executed at the limit or better. There is no amount. But transactions in security/derivatives carry a high
assurance therefore that the limit order will be executable since a degree of risk. You should therefore completely understand the
contract might penetrate the predetermined price, in which case, following statements before actually trading in security/derivatives
the risk of such order not getting executed arises, just as with a contracts and also trade with caution while taking into account
regular limit order. one's circumstances, financial resources, etc.

v. Risk of News Announcements b. Trading in Futures Commodity Derivatives involves daily

Traders/Manufacturers make news announcements that may settlement of all positions. Every day the open positions are
impact the price of the commodities and/or security/derivatives marked to market based on the closing price. If the closing price
contracts. These announcements may occur during trading and has moved against you, you will be required to deposit the amount
when combined with lower liquidity and higher volatility may of loss (notional) resulting from such movement. This margin will
suddenly cause an unexpected positive or negative movement in have to be aid within a stipulated time frame, generally before
the price of the security/derivatives contract. commencement of trading on the next day.

vi. Risk of Rumours c. If you fail to deposit the additional margin by the deadline or if
a. Rumours about the price of a security/commodity at times an outstanding debt occurs in your account, the Member of the
float in the market through word of mouth, newspaper, websites Exchange may liquidate/square-up a part of or the whole position.
or news agencies, etc., the investors should be wary of and In this case, you will be liable for any losses incurred due to such
should desist from acting on rumours. square-up/ Close Outs.

vii. System Risk d. Under certain market conditions, an Investor may find it difficult
a. High volume trading will frequently occur at the market opening or impossible to execute the transactions. For example, this
and before market close. Such high volumes may also occur at situation can occur due to factors such as illiquidity i.e. when
any point in the day. These may cause delays in order execution or there are insufficient bids or offers or suspension of trading due to
confirmation. price limit or circuit breakers etc.
b. During periods of volatility, on account of market participants
continuously modifying their order quantity or prices or placing e. Steps, such as, changes in the margin rate, increase in the cash
margin rate etc. may be adopted in order to maintain market
fresh orders, there may be delays in execution of order and its
stability. These new measures may be
confirmation.
c. Under certain market conditions, it may be difficult or impossi- applied to the existing open interests. In such conditions, you will
be required to put up additional margins or reduce your positions.
ble to liquidate a position in the market at a reasonable price or at
all, when there are no outstanding orders either on the buy side or f. You must ask your Member of the Exchange to provide the full
the sell side, or if trading is halted in a security/derivatives due to details of the security/derivatives contracts you plan to trade
any action on account of unusual trading activity or price hitting
circuit filters or for any other reason. i.e. the contract specifications and the associated obligations.

viii. System/Network Congestion 3. Trading through wireless technology or any other technol-
Trading on the Exchange is in electronic mode, based on ogy:
satellite/leased line communications, combination of technologies Any additional provisions defining the features, risks, responsibili-
and computer systems to place and route orders. Thus, there ties, obligations and liabilities associated with commodities
exists a possibility of communication failure or system problems trading through wireless technology or any other technology
or slow or delayed response from system or trading halt, or any should be brought to the notice of the client by the member.
such other problem/glitch whereby not being able to establish
access to the trading system/network, which may be beyond the 4. General
control of and may result in delay in processing or not processing
buy or sell orders either in part or in full. You are cautioned to note i. Deposited cash and property:
that although these problems may be temporary in nature, but You should familiarize yourself with the protections accorded to
when you have outstanding open positions or unexecuted orders, the money or other property you deposit particularly in the event
these represent a risk because of your obligations to settle all of a firm become insolvent or bankrupt. The extent to which you
executed transactions may recover your money or property may be governed by
specific legislation or local rules. In some jurisdictions, property,
which has been specifically identifiable as your own, will be pro-
rated in the same manner as cash for purposes of distribution in
the event of a shortfall. In case of any dispute with the Member of
the Exchange, the same shall be subject to arbitration as per the
Rules, Bye-laws and Business Rules of the Exchange.

ii. Commission and other charges:

Before you begin to trade, you should obtain a clear explanation of
all commissions, fees and other charges for which you will be
liable. These charges will affect your net profit (if any) or increase
your loss.

iii. For rights and obligations of the Members/Authorised

Persons/clients, please refer to Annexure 3.

iv.The term 'Constituent' shall mean and include a Client, a

Customer or an Investor, who deals with a member for the
purpose of trading in the security/derivatives through the
mechanism provided by the Exchange.

v. The term 'member' shall mean and include a Trading Member or

a Member/Broker, who has been admitted as such by the
Exchange and got a registration certificate from SEBI.
Additional Risk Disclosure documents for Options Trading
Risk of option holders:

1. An option holder runs the risk of losing the entire amount paid for the option in a relatively short period of
time. This risk reflects the nature of an option as a wasting asset which becomes worthless when it expires.
An option holder who neither sells his option in the secondary market nor exercises it prior to its expiration
will necessarily lose his entire investment in the option. If the price of the underlying does not change in the
anticipated direction before the option expires, to an extent sufficient to cover the cost of the option, the
investor may lose all or a significant part of his investment in the option.

2. The Exchanges may impose exercise restrictions and have absolute authority to restrict the exercise of
options at certain times in specified circumstances.

Risks of option writers:

1. If the price movement of the underlying is not in the anticipated direction, the option writer runs the risks
of losing substantial amount.

2. The risk of being an option writer may be reduced by the purchase of other options on the same
underlying interest and thereby assuming a spread position or by acquiring other types of hedging positions
in the options markets or other markets. However, even where the writer has assumed a spread or other
hedging position, the risks may still be significant. A spread position is not necessarily less risky than a
simple 'long' or 'short' position.

3. Transactions that involve buying and writing multiple options in combination, or buying or writing options
in combination with buying or selling short the underlying interests, present additional risks to investors.
Combination transactions, such as option spreads, are more complex than buying or writing a single option.
And it should be further noted that, as in any area of investing, a complexity not well understood is, in itself,
a risk factor. While this is not to suggest that combination strategies should not be considered, it is
advisable, as is the case with all investments in options, to consult with someone who is experienced and
knowledgeable with respect to the risks and potential rewards of combination transactions under various
market circumstances.
RIGHTS AND OBLIGATIONS OF MEMBERS, AUTHORIZED PERSONS Annexure 3
AND CLIENTS as prescribed by SEBI and Commodity Exchanges
1. The client shall invest/trade in those commodities /contracts/ form9 as provided at the time of account opening and thereafter;
other instruments admitted to dealings on the Exchanges as including the information on winding up petition/insolvency
defined in the Rules, Byelaws and Business Rules/ Regulations of petition or any litigation which may have material bearing on his
Exchanges/SEBI and circulars/notices issued there under from capacity. The client shall provide/update the financial information
time to time. to the Member on a periodic basis.

2. The Member, Authorized Person and the client shall be bound by 11. A. Protection from unfair terms in financial contracts**
all the Rules, Byelaws and Business Rules of the Exchange and a. An unfair term of a non-negotiated contract will be void.
circulars/notices issued there under and Rules and Regulations of b. A term is unfair if it 3
SEBI and relevant notifications of Government authorities as may i. causes a significant imbalance in the rights and obligations of
be in force from time to time. the parties under the financial contract, to the detriment of the
Client; and
3. The client shall satisfy himself of the capacity of the Member to ii.is not reasonably necessary to protect the legitimate interests
deal in commodities and/or deal in derivatives contracts and of the Member.
wishes to execute its orders through the Member and the client c. The factors to be taken into account while determining whether
shall from time to time continue to satisfy itself of such capability a term is unfair, include 3
of the Member before executing orders through the Member. i. the nature of the financial product or financial service dealt with
under the financial contract;
4. The Member shall continuously satisfy itself about the ii.the extent of transparency of the term;
genuineness and financial soundness of the client and investment **contracts offered by commodity exchanges
objectives relevant to the services to be provided. iii. the extent to which the term allows a Client to compare it
with other financial contracts for similar financial products or
5. The Member shall take steps to make the client aware of the
financial services; and
precise nature of the Member9s liability for business to be
iv. the financial contract as a whole and the terms of any other
conducted, including any limitations, the liability and the capacity contract on which it is dependent.
in which the Member acts.
d. A term is transparent if it 3
i. is expressed in reasonably plain language that is likely to be
6. Requirements of professional diligence
understood by the Client;
a. The Member must exercise professional diligence while ii.is legible and presented clearly; and
entering into a financial contract or discharging iii. is readily available to the Client affected by the term.
any obligations under it. e. If a term of a financial contract is determined to be unfair under
b. <professional diligence= means the standard of skill and care point 11.A.c, the parties will continue to be bound by the
that a Member would be reasonably remaining terms of the financial contract to the extent that the
expected to exercise towards a Client, commensurate withi. financial contract is capable of enforcement without the unfair
i. honest market practice; term.
ii.the principle of good faith;
iii. level of knowledge, experience and expertise of the 11.B.
Client; a. <Non-negotiated contract= means a contract whose terms,
iv. the nature and degree of risk embodied in the financial other than the terms contained in point 11.C.
product* or financial service being availed by the Client; and (given below) are not negotiated between the parties to the
v.the extent of dependence of the Client on the Member. financial contract and includes 3
*Commodity derivative contract i. a financial contract in which, relative to the Client, the Member
has a substantially greater bargaining power in determining terms
7. The Authorized Person shall provide necessary assistance and of the financial contract; and
co-operate with the Member in all its dealings with the client(s). ii.a standard form contract.
b. <Standard form contract= means a financial contract that is
Client Information substantially not negotiable for the Client, except for the terms
8. The client shall furnish all such details in full as are required by contained in point 11.C.
the Member in "Account Opening Form= with supporting details, c. Even if some terms of a financial contract are negotiated in
made mandatory by commodity exchanges/SEBI from time to form, the financial contract may be regarded as a non-negotiated
time. contract if so indicated by 3
i. an overall and substantial assessment of the financial contract;
9. The client shall familiarize himself with all the mandatory and
provisions in the Account Opening documents. Any additional ii.the substantial circumstances surrounding the financial
clauses or documents specified by the Member shall be non- contract
mandatory; therefore, subject to specific acceptance by the client. d. In a claim that a financial contract is a non-negotiated contract,
the onus of demonstrating otherwise will be on the Member.
10. The client shall immediately notify the Member in writing if
there is any change in the information in the 8account opening
11. C. v. the disclosure is directly related to the provision of a financial
a. The above does not apply to a term of a financial contract if it 3 product or financial service to the Client, if the Member 3
i. defines the subject matter of the financial contract; 1. informs the Client in advance that the personal information may
ii. sets the price that is paid, or payable, for the provision of the be shared with a third party; and
financial product or financial service under the financial contract 2. makes arrangements to ensure that the third party maintains
and has been clearly disclosed to the Client; or the confidentiality of the personal information in the same manner
iii. is required, or expressly permitted, under any law or regula- as required under this Part; or
tions. vi. the disclosure is made to protect against or prevent actual or
b. The exemption under point 11.C does not apply to a term that potential fraud, unauthorised transactions or claims, if the
deals with the payment of an amount which is contingent on the Member arranges with the third party to maintain the confidential-
occurrence or non- occurrence of any particular event. ity of the personal information in the manner required under this
Part.-
12. The Member and Authorized Person shall maintain all the c. <Third party= means any person other than the concerned
details of the client as mentioned in the account opening form or Member, including a person belonging to the same group as the
any other information pertaining to the client, confidentially and Member.
that they shall not disclose the same to any person/authority
except as required under any law/regulatory requirements. 14. A. Requirement of fair disclosure both initially and on
Provided however that the Member may so disclose information continuing basis
about his client to any person or authority with the express a. Member must ensure fair disclosure of information that is likely
permission of the client. to be required by a Client to make an informed transactional
decision.
13. A. Protection of personal information and confidentiality b. In order to constitute fair disclosure, the information must be
a. <Personal information= means any information that relates to a provided 3
Client or allows a Client9s identity to be inferred, directly or i. sufficiently before the Client enters into a financial contract, so
indirectly, and includes 3 as to allow the Client reasonable time to understand the informa-
i. name and contact information; tion;
ii. biometric information, in case of individuals ii. in writing and in a manner that is likely to be understood by a
iii. information relating to transactions in, or holdings of, financial Client belonging to a particular category; and
products iii. in a manner that enables the Client to make reasonable
iv. information relating to the use of financial services; or comparison of the financial product or financial service with other
v. such other information as may be specified. similar financial products or financial services.
c. The types of information that must be disclosed to a Client in
13. B. relation to a financial product or financial service, which may
a. A Member must 3 include information regarding 3
i. not collect personal information relating to a Client in excess of i. main characteristics of the financial product or financial service,
what is required for the provision of a financial product or including its features, benefits and risks to the Client;
financial service; ii. consideration to be paid for the financial product or financial
ii. maintain the confidentiality of personal information relating to service or the manner in which the consideration is calculated;
Clients and not disclose it to a third party, except in a manner iii. existence, exclusion or effect of any term in the financial
expressly permitted under point 13.B.b.; product or financial contract;
iii. make best efforts to ensure that any personal information iv. nature, attributes and rights of the Member, including its
relating to a Client that it holds is accurate, up to date and identity, regulatory status and affiliations;
complete; v. contact details of the Member and the methods of communica-
iv. ensure that Clients can obtain reasonable access to their tion to be used between the Member and the Client;
personal information, subject to any exceptions that the Regulator vi. rights of the Client to rescind a financial contract within a
may specify; and specified period; or
v. allow Clients an effective opportunity to seek modifications to vii. rights of the Client under any law or regulations.
their personal information to ensure that the personal information
held by the Member is accurate, up to date and complete. 14. B.
b. A Member may disclose personal information relating to a a. Member must provide a Client that is availing a financial
Client to a third party only if 3 product or financial service provided by it, with
i. it has obtained prior written informed consent of the Client for the following continuing disclosures 3
the disclosure, after giving the Client an effective opportunity to i. any material change to the information that was required to be
refuse consent; disclosed under point 14.A at
ii. the Client has directed the disclosure to be made; the time when the Client initially availed the financial product or
iii. the Regulator has approved or ordered the disclosure, and financial service;
unless prohibited by the relevant law or regulations, the Client is ii. information relating to the status or performance of a financial
given an opportunity to represent under such law or regulations product held by the Client, as may be required to assess the
against such disclosure; rights or interests in the financial product or financial service; and
iv. the disclosure is required under any law or regulations, and iii. any other information that may be specified.
unless prohibited by such law or regulations, the Client is given an b. A continuing disclosure must be made 3
opportunity to represent under such law or regulations against I within a reasonable time-period from the occurrence of any
such disclosure;
material change or at reasonable periodic intervals, as applicable; 22. The Client shall pay to the Member brokerage and statutory
and levies as are prevailing from time to time and as they apply to the
ii. in writing and in a manner that is likely to be understood by a Client9s account, transactions and to the services that Member
Client belonging to that category. renders to the Client. The Member shall not charge brokerage
more than the maximum brokerage permissible as per the Rules,
Margins Business Rules and Bye-laws of the relevant commodity
exchanges and/or Rules of SEBI.
15. The client shall pay applicable initial margins, withholding
margins, special margins or such other margins as are consid- Liquidation and close out of position
ered necessary by the Member or the Exchange or as may be
directed by SEBI from time to time as applicable to the seg- 23. Without prejudice to the Member's other rights (including the
ment(s) in which the client trades. The Member is permitted in its right to refer a matter to arbitration), the client understands that
sole and absolute discretion to collect additional margins (even the Member shall be entitled to liquidate/close out all or any of the
though not required by the Exchange or SEBI) and the client shall client's positions for nonpayment of margins or other amounts,
be obliged to pay such margins within the stipulated time. outstanding debts, etc. and adjust the proceeds of such liquida-
tion/close out, if any, against the client's liabilities/obligations. Any
16. The client understands that payment of margins by the client and all losses and financial charges on account of such liquida-
does not necessarily imply complete satisfaction of all dues. In tion/closing-out shall be charged to and borne by the client.
spite of consistently having paid margins, the client may, on the
settlement of its trade, be obliged to pay (or entitled to receive) 24. In the event of death or insolvency of the client or his/its
such further sums as the contract may dic- otherwise becoming incapable of receiving and paying for or
tate/require delivering or transferring commodities which the client has
ordered to be bought or sold, Member may close out the
Transactions & Settlements transaction of the client and claim losses, if any, against the
estate of the client. The client or his nominees, successors, heirs
17. The client shall give any order for buy or sell of commodities and assignee shall be entitled to any surplus which may result
derivatives contract in writing or in such form or manner, as may there from. The client shall note that transfer of
be mutually agreed between the client and the Member however funds/commodities in favor of a Nominee shall be valid discharge
ensuring the regulatory requirements in this regard are complied by the Member against the legal heir.
with. The Member shall ensure to place orders and execute the
trades of the client, only in the Unique Client Code assigned to that Dispute Resolution
client.
25. The Member shall co-operate in redressing grievances of the
18. The Member shall inform the client and keep him apprised client in respect of all transactions routed through it.
about trading/settlement cycles, delivery/payment schedules, any 26. The client and the Member shall refer any claims and/or
changes therein from time to time, and it shall be the responsibil- disputes with respect to deposits, margin money, etc., to
ity in turn of the client to comply with such schedules/procedures arbitration as per the Rules, Byelaws and Business Rules of the
of the relevant commodity exchange where the trade is executed. Exchanges where the trade is executed and circulars/notices
issued thereunder as may be in force from time to time.
19. The Member shall ensure that the money deposited by the
client shall be kept in a separate account, distinct from his/its own 27. The client/Member understands that the instructions issued
account or account of any other client and shall not be used by the by an authorized representative for dispute resolution, if any, of
Member for himself/itself or for any other client or for any purpose the client/Member shall be binding on the client/Member in
other than the purposes mentioned in Rules, circulars, notices, accordance with the letter authorizing the said representative to
guidelines of SEBI and/or Rules, Business Rules, Bye-laws, deal on behalf of the said client/Member.
circulars and notices of Exchange.
28. Requirement for each Member to have an effective grievance
20. Where the Exchange(s) cancels trade(s) suo moto all such redress mechanism which is accessible to all its Clients
trades including the trade/s done on behalf of the client shall ipso a. A Member must have in place an effective mechanism to
facto stand cancelled, Member shall be entitled to cancel the receive and redress complaints from its Clients in relation to
respective contract(s) with client(s). financial products or financial services provided by it, or on its
behalf, in a prompt and fair manner.
21. The transactions executed on the Exchange are subject to b. A Member must inform a Client, at the commencement of
Rules, Byelaws and Business Rules and circulars/notices issued
relationship with the Client and at such other time when the
thereunder of the Exchanges where the trade is executed and all
information is likely to be required by the Client, of 3
parties to such trade shall have submitted to the jurisdiction of i. the Client9s right to seek redress for any complaints; and
such court as may be specified by the Byelaws and Business ii. the processes followed by the Member to receive and redress
Rules of
complaints from its Clients.
the Exchanges where the trade is executed for the purpose of
giving effect to the provisions of the Rules, Byelaws and Business 29. A. Suitability of advice for the Client
Rules of the Exchanges and the circulars/notices issued thereun- Right to receive advice that is suitable taking into account the
der. relevant personal circumstances of the Client, such
Brokerage as the Clients financial circumstances and needs. This obligation
would apply to persons who render advice to Clients and the
regulator may specify categories of financial products and service 33. In the event of demise/insolvency of the Authorized Person or
that necessarily require such advice to be given. the cancellation of his/its registration with the Board or/withdrawal
a. A Member must 3 of recognition of the Authorized Person by the commodity
i. make all efforts to obtain correct and adequate information exchange and/or termination of the agreement with the Authorized
about the relevant personal circumstances of a Client; and Person by the Member, for any reason whatsoever, the client shall
ii. ensure that the advice given is suitable for the Client after due be informed of such termination and the client shall be deemed to
consideration of the relevant personal circumstances of the Client. be the direct client of the Member and all clauses in the 8Rights
b. If it is reasonably apparent to the Member that the available and Obligations9 document(s) governing the Member, Authorized
information regarding the relevant personal circumstances of a Person and client shall continue to be in force as it is, unless the
Client is incomplete or inaccurate, the Member must warn the client intimates to the Member his/its intention to terminate their
Client of the consequences of proceeding on the basis of relationship by giving a notice in writing of not less than one
incomplete or inaccurate information. month.
c. If a Client intends to avail of a financial product or financial
service that the Member determines unsuitable for the Client, the Additional Rights & Obligations
Member 3
i. must clearly communicate its advice to the Client in writing and 34. The Member and client shall reconcile and settle their
in a manner that is likely to be understood by the Client; and accounts from time to time as per the Rules, Business Rules, Bye
ii. may provide the financial product or financial service requested Laws, Circulars, Notices and Guidelines issued by SEBI and the
by the Client only after complying with point 29.A.a and obtaining relevant Exchanges where the trade is executed.
a written acknowledgement from the Client.
35. The Member shall issue a contract note to his clients for
30. Dealing with conflict of interest trades executed in such format as may be prescribed by the
In case of any conflict between the interests of a Client and that of Exchange from time to time containing records of all transactions
the Member, preference must be given to the Client interests. including details of order number, trade number, trade time, trade
a. A member must 3 price, trade quantity, details of the derivatives contract, client
i. provide a Client with information regarding any conflict of code, brokerage, all charges levied etc. and with all other relevant
interests, including any conflicted remuneration that the Member details as required therein to be filled in and issued in such
has received or expects to receive for making the advice to the manner and within such time as prescribed by the Exchange. The
Client; and Member shall send contract notes to the investors within 24
ii. give priority to the interests of the Client if the Member knows, hours of the execution of the trades in hard copy and/or in
or reasonably ought to know, of a conflict between 3 electronic form using digital signature.
1. its own interests and the interests of the Client; or 2. the
interests of the concerned Member and interests of the Client, in 36. The Member shall make pay out of funds or delivery of
cases where the Member is a financial representative. commodities as per the Exchange Rules, Bye-Laws, Business
b. The information under point 16a.i. must be given to the Client Rules and Circulars, as the case may be, to the Client on receipt
in writing and in a manner that is likely to be understood by the of the payout from the relevant Exchange where the trade is
Client and a written acknowledgment of the receipt of the executed unless otherwise specified by the client and subject to
information should be obtained from the Client. such terms and conditions as may be prescribed by the relevant
c. In this section, <conflicted remuneration= means any benefit, Exchange from time to time where the trade is executed.
whether monetary or non-monetary, derived by a Member from
persons other than Clients that could, under the circumstances, 37. The Member shall send a complete `Statement of Accounts9
reasonably be expected to influence the advice given by the for both funds and commodities in respect of each of its clients in
Member to a Client. such periodicity and format within such time, as may be pre-
scribed by the relevant Exchange, from time to time, where the
Termination of Relationship trade is executed. The Statement shall also state that the client
shall report errors, if any, in the Statement within such time as
31. This relationship between the Member and the client shall be
may be prescribed by the relevant Exchange from time to time
terminated; if the Member for any reason ceases to be a member
where the trade was executed, from the receipt thereof to the
of the commodity exchange including cessation of membership
Stock broker.
by reason of the Member's default, death, resignation or expulsion
or if the certificate is cancelled by the Exchange. 38. The Member shall send margin statements to the clients on
daily basis. Margin statement should include, interalia, details of
32. The Member, Authorized Person and the client shall be entitled
collateral deposited, collateral utilized and collateral status
to terminate the relationship between them without giving any
(available balance/due from client) with break up in terms of cash,
reasons to the other party, after giving notice in writing of not less
Fixed Deposit Receipts (FDRs), Bank Guarantee, warehouse
than one month to the other parties. Notwithstanding any such
receipts, securities etc.
termination, all rights, liabilities and obligations of the parties
arising out of or in respect of transactions entered into prior to the 39. The Client shall ensure that it has the required legal capacity
termination of this relationship shall continue to subsist and vest to, and is authorized to, enter into the relationship with Member
in/be binding on the respective parties or his/its respective heirs, and is capable of performing his obligations and undertakings
executors, administrators, legal representatives or successors, as hereunder. All actions required to be taken to ensure compliance
the case may be.
of all the transactions, which the Client may enter into shall be iv. any non-contractual barriers imposed by the Member where
completed by the Client prior to such transaction being entered the Client wishes to exercise rights under a financial contract,
into. including 3
v. the right to terminate the financial contract;
40. In case, where a member surrenders his/ her/ its member- vi. the right to switch to another financial product or another
ship, Member gives a public notice inviting claims, if ny, from Member and
investors. In case of a claim relating to transactions executed on vii. a threat to take any action, depending on the circumstances in
the trading system of the Exchange, ensure that client lodge a which the threat is made.
claim with the Exchange within the stipulated period and with the
supporting documents. Electronic Contract Notes (ECN)

41. A. Protection from unfair conduct which includes misleading 42. In case, client opts to receive the contract note in electronic
conduct & abusive conduct form, he shall provide an appropriate e-mail id to the stock broker.
a. Unfair conduct in relation to financial products or financial The client shall communicate to the stock broker any change in
services is prohibited. the email-id through a physical letter. If the client has opted for
b. <Unfair conduct= means an act or omission by a Member or its internet trading, the request for change of email id may be made
financial representative that significantly impairs, or is likely to through the secured access by way of client specific user id and
significantly impair, the ability of a Client to make an informed password.
transactional decision and includes 3
i. misleading conduct under point 41.B 43. The Member shall ensure that all ECNs sent through the e-mail
ii. abusive conduct under point 41.C shall be digitally signed, encrypted, non tamperable and in
iii. such other conduct as may be specified. compliance with the provisions of the IT Act, 2000. In case, ECN
is sent through e-mail as an attachment, the attached file shall
41. B. also be secured with the digital signature, encrypted and non-
a. Conduct of a Member or its financial representative in relation tamperable.
to a determinative factor is misleading if
it is likely to cause the Client to take a transactional decision that 44. The client shall note that non-receipt of bounced mail
the Client would not have taken otherwise, and the conduct notification by the Member shall amount to delivery of the contract
involves 3 note at the e-mail ID of the client.
i. providing the Client with inaccurate information or information
that the Member or financial representative does not believe to be 45. The Member shall retain ECN and acknowledgement of the e-
true; or mail in a soft and non-tamperable form in the manner prescribed
ii. providing accurate information to the Client in a manner that is by the exchange in compliance with the provisions of the IT Act,
deceptive. 2000 and as per the extant rules/circulars/guidelines issued by
b. In determining whether a conduct is misleading under point SEBI/Commodity exchanges from time to time. The proof of
41.B.a, the following factors must be considered to be <determi- delivery i.e., log report generated by the system at the time of
native factors= 3 sending the contract notes shall be maintained by the Member for
i. the main characteristics of a financial product or financial the specified period under the extant rules/circulars/guidelines
service, including its features, benefits and risks to the Client; issued by SEBI/Commodity exchanges. The log report shall
ii. the Client9s need for a particular financial product or financial provide the details of the contract notes that are not delivered to
service or its suitability for the Client; the client/e-mails rejected or bounced back. The Member shall
iii. the consideration to be paid for the financial product or take all possible steps to ensure receipt of notification of bounced
financial service or the manner in which the consideration is mails by him at all times within the stipulated time periodunder the
calculated; extant rules/circulars/guidelines issued by SEBI/Commodity
iv. the existence, exclusion or effect of any term in a financial exchanges.
contract, which is material term in the context of that financial
contract;v. the nature, attributes and rights of the Member, 46. The Member shall continue to send contract notes in the
including its identity, regulatory status and affiliations; and physical mode to such clients who do not opt to receive the
vi. the rights of the Client under any law or regulations. contract notes in the electronic form. Wherever the ECNs have not
been delivered to the client or has been rejected (bouncing of
41. C. mails) by the e-mail ID of the client, the Member shall send a
a. A conduct of a Member or its financial representative in relation physical contract note to the client within the stipulated time under
to a financial product or financial service is abusive if it 3 the extant Regulations/ Rules, Bye-Laws, Business Rules and
i. involves the use of coercion or undue influence; and
Circulars of SEBI/commodity exchanges and maintain the proof of
ii. causes or is likely to cause the Client to take a transactional dispatch and delivery of such physical contract notes.
decision that the Client would not have taken otherwise.
b. In determining whether a conduct uses coercion or undue 47. In addition to the e-mail communication of the ECNs to the
influence, the following must be considered 3 client, the Member shall simultaneously publish the ECN on his
i. the timing, location, nature or persistence of the conduct; designated web-site, if any, in a secured way and enable relevant
ii. the use of threatening or abusive language or behavior;
iii. the exploitation of any particular misfortune or circumstance of
the Client, of which the Member is aware, to influence the Client9s
decision with regard to a financial product or financial service;
access to the clients and for this purpose, shall allot a unique user
name and password to the client, with an option to the client to
save the contract note electronically and/or take a print out of the
same.

Law and Jurisdiction

48. In addition to the specific rights set out in this document, the
Member, Authorised Person and the client shall be entitled to
exercise any other rights which the Member or the client may have
under the Rules, Bye-laws and Business Rules of the Exchanges
in which the client chooses to trade and circu-
lars/notices issued thereunder or Rules of SEBI.

49. The provisions of this document shall always be subject to

Government notifications, any rules, guidelines and circu-
lars/notices issued by SEBI and Circulars, Rules, Business Rules
and Bye laws of the relevant commodity exchanges, where the
trade is executed, that may be in force from time to time.

50. The Member and the client shall abide by any award passed
by the Arbitrator(s) under the Arbitration and Conciliation Act,
1996. However, there is also a provision of appeal, if either party
is not satisfied with the arbitration award.

51. Words and expressions which are used in this document but
which are not defined herein shall, unless the context otherwise
requires, have the same meaning as assigned thereto in the Rules,
Byelaws and Regulations/Business Rules and circu-
lars/notices issued thereunder of the Exchanges/SEBI.

52. All additional voluntary/non-mandatory clauses/document

added by the Member should not be in contravention with Rules/
Business Rules/Notices/Circulars of Exchanges/SEBI. Any
changes in such voluntary clauses/document(s) need to be
preceded by a notice of 15 days. Any changes in the rights and
obligations which are specified by Exchanges/SEBI shall also be
brought to the notice of the clients.

53. If the rights and obligations of the parties hereto are altered by
virtue of change in Rules of SEBI or Bye-laws, Rules and Business
Rules of the relevant commodity exchanges where the trade is
executed, such changes shall be deemed to have been
incorporated herein in modification of the rights and obligations of
the parties mentioned in this document.

54. Members are required to send account statement to their

clients every month.
GUIDANCE NOTE - DO9s AND DON9Ts FOR THE CLIENTS Annexure 4

Do9s
1. Trade only through Registered Members of the Exchange. Check from the Exchange website at following link
https://www.mcxindia.com/membership/notice-board/Member-AP -Details to see whether the Member is registered with the Exchange.
2. Insist on filling up a standard 'Know Your Client (KYC)' form before you commence trading.
3. Insist on getting a Unique Client Code (UCC) and ensure all your trades are done under the said UCC.
4. Insist on reading and signing a standard 'Risk Disclosure Agreement'.
5. Obtain a copy of your KYC and/ or other documents executed by you with the Member, from the Member.
6. Cross check the genuineness of trades carried out at the Exchange through the trade verification facility available on the Exchange
website at the following link https://www.mcxindia.com/en/login .The trades can be verified online where trade information is available
up to 5 working days from the trade date.
7. Insist on a duly signed Contract Note in specified format for every executed trade within 24 hours of trade, highlighting the details of
the trade along with
your UCC.
8. Ensure that the Contract Note contains all the relevant information such as Member Registration Number, Order No., Order Date,
Order time, Trade No., Trade rate, Quantity, Arbitration Clause, etc.
9. Obtain receipt for collaterals deposited with the Member towards margins.
10. Go through the Rules, Bye-laws, Regulations, Circulars, Directives, Notifications of the Exchange as well as of the Regulators,
Government and other authorities to know your rights and duties vis-à-vis those of the Member.
11. Ask all relevant questions and clear your doubts with your Member before transacting.
12. Insist on receiving the bills for every settlement.
13. Insist on Monthly statements of your ledger account and report any discrepancies in the statement to your Member within 7
working days. In case of unsatisfactory response report the discrepancy to the Exchange within 15 working days from the date of
cause of action.
14. Scrutinize minutely both the transaction & holding statements that you receive from your Depository Participant.
15. Keep Delivery Instruction Slips (DIS) book issued by DPs in safe possession.
16. Ensure that the DIS numbers are preprinted and your account number (UCC) is mentioned in the DIS book.
17. Freeze your Demat account in case of your absence for longer duration or in case of not using the account frequently.
18. Pay required margins in time and only by Cheque and ask for receipt thereof from the Member.
19. Deliver the security/commodity in case of sale or pay the money in case of purchase within the time prescribed.
20. Understand and comply with accounting standards for derivatives.
21. Ensure to read, understand and then sign the voluntary clauses, if any, agreed between you and the Member. Note that the
clauses as agreed between you and the Member cannot be changed without your consent.
22. Get a clear idea about all brokerage, commissions, fees and other charges levied by the Member on you for trading and the
relevant provisions/guidelines specified by SEBI/Commodity exchanges.
23. Make the payments by account payee cheque in favour of the Member. Ensure that you have a documentary proof of your
payment/deposit of security/commodity with the Member, stating date, commodity, quantity, towards which bank/demat account such
money or commodities (in the form of warehouse receipts) deposited and from which bank/ demat account.
24. The payout of funds or delivery of security/commodity (as the case may be) shall not be made to you within one working day
from the receipt of payout from the Exchange, in case you have given specific authorization for maintaining running account to the
member. Thus, in this regard, the running account authorization provided by you to the Member shall be subject to the following
conditions:
a) Such authorization from you shall be dated, signed by you only and contains the clause that you may revoke the same at any time.
b) You need to bring any dispute arising from the statement of account to the notice of the Member in writing preferably within 7
(seven) working days from the date of receipt of funds/security/commodity or statement, as the case may be. In case of dispute, refer
the matter in writing to the Investors Grievance Cell of the relevant Commodity exchanges without delay.
c) In case you have not opted for maintaining running account and pay-out is not received on the next working day of the receipt of
payout from the exchanges, please refer the matter to the Member. In case there is dispute, ensure that you lodge a complaint in writing
immediately with the Investors Grievance Cell of the relevant Commodity exchange.
d) Please register your mobile number and email id with the Member, to receive trade confirmation alerts/ details of the transactions
through SMS or email, by the end of the trading day, from the commodity exchanges.
25. You should familiarize yourself with the protection accorded to the money or other property you may deposit with your member,
26. Please ensure that you have a documentary proof of having made the deposit of such money or property with the member, stating
towards which account such money or property deposited.
27. In case your problem/grievance/issue is not being sorted out by concerned Member/Authorised Person then you may take up the
matter with the concerned Commodity Exchange. If you are not satisfied with the resolution of your complaint then you can escalate
the matter to SEBI.

Don't
1. Do not deal with any unregistered intermediaries.
2. Do not undertake off-market transactions as such transactions are illegal and fall outside the jurisdiction of the Exchange.
3. Do not enter into assured returns arrangement with any Member.
4. Do not get carried away by luring advertisements, rumours, hot tips, explicit/implicit promise of returns, etc.
5. Do not make payments in cash/ take any cash towards margins and settlement to/from the Member.
6. Do not start trading before reading and understanding the Risk Disclosure Agreement.
7. Do not neglect to set out in writing, orders for higher value given over phone.
8. Do not accept unsigned/duplicate contract note/confirmation memo.
9. Do not accept contract note/confirmation memo signed by any unauthorized person.
10. Don9t share your internet trading account9s password with anyone.
11. Do not delay payment/deliveries of security/commodity to Member.
12. Do not forget to take note of risks involved in the investments.
13. Do not sign blank Delivery Instruction Slips (DIS) while furnishing security/commodity, deposits and/or keep them with
Depository Participants (DP) or member to save time.
14. Do not pay brokerage in excess of that rates prescribed by the Exchange.
15. Don9t issue cheques in the name of Authorized Person.
Prodecure to lodge a complaint online on SEBI SCORES

1. From 1st August 2018, it has been made mandatory to register on SEBI SCORES for lodging a complaint.

2. To become a registered user of SCORES, investors may click on “Register here” under “Investor Corner”
appearing on the homepage of SCORES portal. Investors will have to fill in Registration form. Fields like Name,
Address, E-mail Address, PAN and Mobile Number are mandatory fields and are required to be filled up. The
username and password of SCORES will be sent to the investor’s registered email id. If an investor is already a
registered user, they can login by entering their username and password.

3. After logging into SCORES, investors must click on “Complaint Registration” under “Investor Corner”.

4. Investor should provide complaint details.

5. Investors must select the correct complaint category, entity name, and nature of complaint.

6. Investors must provide complaint details in brief (up to 1000 characters).

7. A PDF document (up to 2MB of size for each nature of complaint) can also be attached along with the complaint
as supporting document.

On successful submission of complaint, system generated unique registration number will be displayed on the
screen which may be noted for future correspondence. An email acknowledging the complaint with complaint
registration number will also be sent to the email id entered in the complaint registration form. A text message will
also be sent to the investor informing them about registration of the complaint.