Policies

Policies and Procedures forms integral part of the Member Constituent Agreement :

1. Refusal of order for Penny Stocks:

GSV shall have the absolute discretion to accept, refuse or partiallyaccept any buy or sell order for execution from a client in respect of penny stocks, illiquid stocks, stockshaving low liquidity, illiquid options, far month options, writing of options and any other contracts / shareswhich are extremely volatile or subject to Market manipulation.GSV may permit restrictive acceptance of orders in such scrips / contracts in controlled environments likeorders received from clients being forwarded by branches / sub brokers to HO instead of allowing them at branch / sub broker level. GSV may cancel orders in such scrips received from clients before execution or after partial execution without assigning any reasons there of GSV may take appropriate declarations from the clients before accepting such orders. GSV shall not be responsible for delay in execution of such orders and any opportunity / financial loss to the client.
2. Setting up Client’s Exposure Limits:

GSV may have its own policy to allow differential purchase limitsand sell limits varying from client to client, depending upon credit worthiness, integrity and past trading record of each client and volatility in the market which may vary from time to time. GSV may provide an exposure limit for intra day and delivery to a client which would be a multiple of the clear ledger balance in the account of the client along with collateral values after appropriate haircut. The value of multiple and haircut shall be decided as per Market volatility, quality of collaterals, credit worthiness, integrity and past trading record of each client which may vary from client to client and from time to time.GSV may provide a sell Iimit to the client equivalent to the value of securities held by the client in his POA enabled Demat account with our CDSL DP and the collaterals held with us in our Beneficiary / Margin account on behalf of clients after making appropriate adjustments for the usettled delivery positions of the client.GSV may provide Exposure for Futures and Options writing in Derivatives segment based on availability of Initial Margin (Span+ Exposure + MTM) in the form of clear ledger balance. Considering collaterals after appropriate haircut is at the sole discretion of GSV. However the buying of Options in Derivatives segment may be allowed on the premium value against the clear ledger balance available in Client’s account.
3. Applicable Brokerage rates:

Brokerage shall be applied as per the rates agreed upon with the client inthe KYC at the time of registration of the client subsequently through a written agreement between theclient and GSV. The rate of Brokerage shall not exceed the maximum brokerage permissible under Exchangebye laws. The slab rates of brokerage fixed by us are function of the quality and cost of services provided to the clientand the volume and revenue expected from an account. It shall be reviewed by us from time to time and may be increased with prospective effect at a notice of 15 days sent to the email address or postal address of the client registered with us.The Brokerage shall however be exclusive of DP Charges, Account opening charges, delayed payment charges, penalties levied by Exchanges, courier charges, bank charges towards cheque bounces and SEBI/ Exchange / CM turnover or any other charges levied by regulatory and statutory bodies from time to time.
4. Imposition of penalty / delayed payment charges by either party, specifying the rate and the period(This must not result in funding by the broker in contravention of the applicable laws) :

As per theExchange bye laws, the Member has to make pay in of funds to the Exchange by T+2 morning and arrangedelivery of securities to the Exchange latest by T+2 morning. Futher Member broker is also required to maintain adequate upfront margins with the exchange to avail exposure for trading. The exchanges havealso defined the ratios in which the cash and collaterals are to be maintained by the Member broker.In order to manage its operations, GSV requires full cooperation of the clients in meeting their respectiveobligation towards pay in and margins.Mandatory document dealing with Policies and Procedures pursuant to SEBI’s Circular MIRSD/SE/Cir - 19/2009 dated 03rd December 2009 GSV is therefore authorized by the client to charge a delayed payment penalty not exceeding 0.10% Per day on account of delays / failure by the client in meeting the pay in obligations on the scheduled date in both Cash & F&O Segment. While levying delayed payment charges in the running account of a client, GSV may not consider any credit balance in the other family or group accounts of the client. Penalties levied by the Exchanges: Futher Exchanges levy various penalties on the member brokers on auction resulting from short deliveries, non adherence to client wise exposure limits, client wise shortfalls in F & O Margin and for other reasons which may be defined by the Exchanges from time to time. GSV is therefore authorized by the client to pass on any penalty imposed by the Exchange/SEBI and or any other regulatory authority to the client, which arises on account of the client. GSV provide exposure against the upfront margins received in the form of cash / collateral from the client and the client also has the right to withdraw Cash and collaterals at his/ her discretion, GSV shall not pay any interest other benefit to the client for maintaining cash balances or depositing collateral margins.
5. The right to sell client’s securities or close client’s positions without giving notice to the client,on account of non payment of client’s dues (This shall be limited to the extent of settlement /margin obligations):

GSV is having the right to sell client’s securities, both unpaid securities as well ascollaterals deposited towards margins, or close out client’s open positions, without giving notice to the client where there is a delay / failure of the client to meet the pay in obligations and / or there is a failure of the client to bring additional margins to cover the increase in risk in the dynamic market conditions. In case of unpaid obligations on T+3 basis, GSV may sell the unpaid / partially paid securities. In addition GSV may sell the collaterals deposited by the client towards margins and or paid securities purchased by the client in earlier settlements where the sale proceeds of unpaid securities are inadequate to cover the pay in obligations and where the unpaid securities apear to be comparatively illiquid and cannot be sold at reasonable rates to the extent required. GSV may follow LIFO method for liquidation of securities but it may not binding on it to follow this method in all cases. Margin shortfalls in F & O: Positions of the client may be closed out to the extent of margin shortfall on the T+1 basis. While computing margin shortfall value of unapproved securities shall not be considered. GSV reserves the right to consider the collateral. Intra day Positions: GSV shall have right to close out any intra-day positions taken by the client after a defined “Cut off” time (Presently 15 minutes before close of market).While selling the securities / closing the client’s positions, GSV may take into account the sales made by the client, positions closed by the client or collections received from the client till a cut off time. While selling the securities / closing the client’s positions, GSV may not take into consideration cheques / drafts/ pay orders deposited by the client with it until clear proceeds of such instruments are received by it in its bank account.  GSV shall have the right to sell client’s securities or close out client’s open positions but it shall not be under any obligations to undertake this exercise compulsorily. GSV shall therefore not be under any obligation to compensate / or to provide reasons of any delay or omission on its part to sell client’s securities or close open positions of the client. The ultimate responsibility risk and liability of the trades are binding on the client.
6. Shortages in obligations arising out internal netting of trades:

GSV shall have the right to adopt a policy of its choice for internal auctions arising out of internal netting of trades and charge to defaulter seller and compensate the impacted purchaser as per the policy.
7. Conditions under which a client may not be allowed to take further position or the broker may close the existing position of a client:

Where the client is not having adequate margins as per conditions defined in Risk Management Policy. In Cash Segment : Where the client has not able to meet his pay in obligation in cash by the schedule date of pay in, irrespective of the value of collaterals available with GSV. Clear proceeds of the cheque deposited by the client to meet the pay in obligations has not yet been received by GSV.Client is trading in “illiquid” securities and volumes in his account exceed internal cut off limit fixed by GSV. GSV exposure at “house level” in a specific scrip / contract exceeds the internal limits fixed by it.In Derivatives: Where the client has not met the margin and has not met Market to Market loss in cash.  Where the open positions in a contract exceeded or are close to market wide cut off limits. Where the client’s position is close to client wise permissible “open” positions. Intraday: Clients may not be able to place intra day orders after a cut off time fixed by us. (Presently 15 minutes prior to close of market)
8. Temporarily suspending or closing a client’s account at the client’s request:

GSV may carry a periodic review of the client accounts and may suspend the accounts from trading in the following circumstances:
• Where the client is inactive for more than 6 months.
• Where the client account is under investigation by any regulatory body.• Where the client has not cleared the naked or uncovered debits which are more than 7 days’ old.
• Non-delivery of statement of accounts sent on period basis.
• Physical contract notes are received back undelivered due to reasons like “No such person”, “addressee left”, refusal to accept, or other reasons which create suspicion.
• DCN failed (Bounced email) on more than 3 instances until client submits and registers new email id.
• Non-updation of communication details like email id, mobile number, land lines details or if it is found to be belonging to the third person.
• On notices received from Statutory, government or local authorities and Income Tax, Service Tax authority etc.
• Where a client is reported to or known to have expired.
• Any other reason at the descretion of GSV.
• Written request from the client for suspension.

9. Deregistering a Client: GSV may deregister a client on the following circumstances:

Any action taken by SEBI / NSE or being part of list of debarred entities published by SEBI.
• On basis of information found in sites of CIBIL, Watch out Investors, or client having suspicious back ground, link with suspicious organization etc.
• GSV shall have right to close out the existing positions; sell the collaterals to recover its dues, if any, before de registering the client.
• GSV shall have the right to deregister a client after serving a 15 days written notice without assigning any reason thereof.
I / we have clearly understood and agree to abide by aforesaid policies and procedures.
I /we also understand and agree that these policies and procedures can be changed from time to time.
I /we understand that GSV shall have the right to implement all the above policies but shall not be under any bligations to undertake this exercise compulsorily. The ultimate responsibility, risk and Iiability of the trades are binding on the client

10. Policy for inactive clients :

Client account will be considered as inactive, if the client does not trade for period of Six months. Calculation will be done at the beginning of every month and those clients Who have not traded even a single time will be considered as inactive. G.S.V. SECURITIES Private Limited would be placing such accounts under temporary suspension. Once the account is under temporary suspension, the client would not be allowed to login to his account or trade (place orders) either through online mode or by calling/visiting its service branch. For an inactive client to become active the client should provide proof of identity and bank statement and a letter stating to start trading.

11.Error Code policy

 

We maintain accuracy while placing orders of all Exchanges/Segments through NEAT and CTCL trading terminals. Human errors are inevitable on rare occasions, but all these erroneous codes are being committed due to typographical mistakes. The transactions executed other than actual code will be transferred to Error‐code through Exchange on‐line trade modification window during the market hours and corresponding quantity will be squared‐off on behalf of actual code before market closes for the day. Based on the net position of these transactions, the profit or loss will be settled between error‐code and the actual code. In case the mistake is being committed by the operator himself or herself, corresponding quantity will be squared‐off by the Member with anticipation of profit or loss.    As per the functional operations of the trading terminal, there will be a scope of happening above instances in NEAT only, but whereas CTCL trading terminal are much controlled while validating and processing the orders before execution. The history of the above instances is being maintained in soft and hard copies for the future verifications during the audit trail.

 

 

12.POLICY ON HIRING AND TRAINING

 

Hiring of Employees GSV is having adequate screening procedures in place to ensure standards when hiring employees. They should identify the key positions within their own organization structures having regard to the risk of money laundering and terrorist financing and the size of their business and ensure the employees taking up such key positions are suitable and competent to perform their duties. Employee’s Training GSV is having an ongoing employee training programme so that the members of the staff are adequately trained in AML and CFT procedures. Training requirements being focused for frontline staff, back office staff, compliance staff, risk management staff and staff dealing with new customers. GSV staff is much concerned that understanding the motivation behind these guidelines, obligations and requirements, implement them consistently and are sensitive to the risks of their systems being misused by ruthless elements.

 

 

13. Shortages in obligations arising out internal netting of trades:

GSV shall have the right to adopt a policy of its choice for internal auctions arising out of internal netting of trades and charge to defaulter seller and compensate the impacted purchaser as per the policy. 

 

14.Policy for inactive clients 

Client account will be considered as inactive, if the client does not trade for period of Six months. Calculation will be done at the beginning of every month and those clients Who have not traded even a single time will be considered as inactive. G.S.V. SECURITIES Private Limited would be placing such accounts under temporary suspension. Once the account is under temporary suspension, the client would not be allowed to login to his account or trade (place orders) either through online mode or by calling/visiting its service branch. For an inactive client to become active the client should provide proof of identity and bank statement and a letter stating to start trading.

 

15.Policy in Anti Money Laundering

 

GSV‟s intentions for publishing a policy on Prevention of Anti Money Laundering Act is not to impose restrictions that are contrary to GSV‟s established culture of openness, trust-worthy and integrity. GSV is strictly following Rules/Regulations/Bye-Laws to maintain the compliance of Regularity Authorities/SEBI and Exchanges to facilitate a Trading platform to transact with more transparency and to maintain a good business relationship with Clients, Individual Investors and Business associates. We are providing Exchanges connectivity via VSAT and Internet to access the Market Watch of different Exchanges and Segments. Trader Work Stations are being installed to place their Buy/Sell orders, Price Enquiry, Confirmations, Outstanding Position, Net Positions, Funds and Securities. Effective service and monitoring is a team effort involving the participation and support of every GSV employee and affiliate who deals with information and/or information systems. It is the responsibility of every employee to know these guidelines, and to conduct their activities accordingly. Purpose of the Policy 18 The purpose of this policy is to outline the business operations and not to deviate from the procedures being followed at GSV. These procedures are in place to protect the Clients, Investors and GSV. Inappropriate application of these procedures exposes GSV to risks including disablement by SEBI/Exchange, Loosing Market Good will, Financial Loss and legal issues. Scope of the policy This policy applies to employees, Clients, Investors, Sub-brokers, and other Business associates at GSV. This policy also applies to all business activities those are performed through GSV. Client Due Diligence Obtaining sufficient information in order to identify persons who beneficially own or control securities account. Whenever it is apparent that the securities acquired or maintained through an account are beneficially owned by a party other than the client, that party should be identified using client identification and verification procedures. The beneficial owner is the natural person or persons who ultimately own, control or influence a client and/or persons on whose behalf a transaction is being conducted. It also incorporates those persons who exercise ultimate effective control over a legal person or arrangement. Verifying the client‟s identity using reliable, independent source documents, data or information; Identifying beneficial ownership and control, i.e. determine which individual(s) ultimately own(s) or control(s) the customer and/or the person on whose behalf a transaction is being conducted; Verifying the identity of the beneficial owner of the customer and/or the person on whose behalf a transaction is being conducted, corroborating the information provided in relation to (c); and Conducting ongoing due diligence and scrutiny, i.e. perform ongoing scrutiny of the transactions and account throughout the course of the business relationship to ensure that the transactions being conducted are consistent with GSV‟s knowledge of the client, its business and risk profile, taking into account, where necessary, the client‟s source of funds. Policy for acceptance of clients: No account should be opened in a fictitious / benami name or on an anonymous basis. Factors of risk perception (in terms of monitoring suspicious transactions) of the client‟s domicile, the nature of activities, and financial capacity must be verified in back-end 19 process. Based on these parameters, the client should clearly classify as low, medium and high risk. These classifications are to be updated regularly in KYC document. GSV should ensure that an account is not opened where it is unable to apply appropriate clients due diligence measures/KYC polices. This may be applicable in cases where it is not possible to ascertain the identity of the client, information provided to the GSV is suspected to be non genuine, perceived non co-operation of the client in providing full and complete information. GSV should not allow such client and file a suspicious activity report to determine any suspicious trading. In such cases the account must be free zed or closed. GSV is more cautious to ensure that it does not return securities of money that may be from suspicious trades. However, GSV should consult the relevant authorities in determining what action it should take when it suspects suspicious trading. In case, the client is permitted to act on behalf of another person, the extent of account operation must be keep tracking of transactions, volume limits, exposure limits and the value of transaction exceeding from the actual eligibility/allocation. The role and responsibilities of both the persons must be verified to avoid illegal/malicious trading activities. The relationship of the client has to be screened and ensure that the identity of the client does not have any links with person having a criminal background. Risk-based Approach According to client‟s background, he may belongs to higher or lower risk category. In such cases, GSV should apply the client due diligence measures on a risk sensitive basis. According to the risk sensitiveness, GSV should do in-depth scrutiny as compared to medium and lower risk levels. In line with the risk-based approach, the type and amount of identification information and documents should obtain necessarily depend on the risk category of a particular client. The following entities are to be verified as a Clients of special category (CSC): Non resident clients High net-worth clients, Trust, Charities, NGOs and organizations receiving donations Companies having close family shareholdings or beneficial ownership Politically exposed persons (PEP) of foreign origin Current / Former Head of State, Current or Former Senior High profile politicians and connected persons (immediate family, Close advisors and companies in which such individuals have interest or significant influence) Companies offering foreign exchange offerings Clients in high risk countries (where existence / effectiveness of money laundering controls is suspect, where there is unusual banking secrecy, Countries active in narcotics production, Countries where corruption (as per Transparency International Corruption Perception Index) is highly prevalent, Countries against 20 which government sanctions are applied, Countries reputed to be any of the following – Havens / sponsors of international terrorism, offshore financial centers, tax havens, countries where fraud is highly prevalent. Non face to face clients Clients with dubious reputation as per public information available etc. Client identification procedure: GSV is very keen on identifying the client‟s reliability or honesty while maintaining the relationship, behaviour of transactions, payments and other procedural adoptions. The attitude of the client can be measured from the KYC documents. The supporting documents and agreements of KYC are being maintained with latest amendments as per SEBI/Exchange circulars. And this is also ensured that uniformity of documentation across the multiple Exchanges/Segments. This uniformity is t avoid unrealistic and in compatible information. In order to further strengthen the KYC norms and identify every associate in the securities market with their respective PAN thereby ensuring sound audit trail of all the transactions, PAN has been made sole identification number for all participants transacting in the securities market, irrespective of the amount of transaction GSV does not indulge nor support any political activities or maintaining any relationship anywhere at branch or sub-broker locations The client should be identified by using reliable sources including documents / information. The GSV should obtain adequate information to satisfactorily establish the identity of each new client and the purpose of the intended nature of the relationship. The information should be adequate enough to satisfy competent authorities (regulatory / enforcement authorities) in future that due diligence was observed by the GSV in compliance with the Guidelines. Each original documents should be seen prior to acceptance of a copy. Failure by prospective client to provide satisfactory evidence of identity should be noted and reported to the higher authority of GSV. GSV shall formulate and implement a client identification programme which notifies rules for maintenance of records of the nature and value of transactions, the procedure and manner of maintaining and time for furnishing of information and verification of records enable it to determine the true identity of clients. A copy of the client identification programme shall be forwarded to the Director, FIU- IND. 21 It may be noted that while risk based approach may be adopted at the time of establishing business relationship with a client, no exemption from obtaining the minimum information/documents from clients. Record Keeping GSV should ensure compliance with the record keeping requirements contained sufficient to permit reconstruction of individual transactions (including the amounts and types of currencies involved, if any) so as to provide, if necessary, evidence for prosecution of criminal behavior. To enable this reconstruction, GSV should retain the following information for the accounts of clients in order to maintain a satisfactory audit trail: (a) the beneficial owner of the account; (b) the volume of the funds flowing through the account; and (c) for selected transactions: • the origin of the funds; • the form in which the funds were offered or withdrawn, e.g. cash, cheques, etc.; • the identity of the person undertaking the transaction; • the destination of the funds; • the form of instruction and authority. GSV should ensure that all clients and transaction records and information are available on a timely basis to the competent investigating authorities. Where appropriate, they should consider retaining certain records, e.g. client identification, account files, and business correspondence, for periods which may exceed that required under the SEBI Act, Rules and Regulations framed there-under PMLA 2002, other relevant legislations, Rules and Regulations or Exchange bye-laws or circulars. More specifically, GSV shall put in place a system of maintaining proper record of transactions prescribed under Rule 3, notified under the Prevention of Money Laundering Act (PMLA), 2002 as mentioned below: (i) all cash transactions of the value of more than rupees ten lakh or its equivalent in foreign currency. (ii) all series of cash transactions integrally connected to each other which have been valued below rupees ten lakh or its equivalent in foreign currency where such series of transactions have taken place within a month and the aggregate value of such transactions exceeds rupees ten lakh. (iii) all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine and where any forgery of a valuable security has taken place. (iv) all suspicious transactions whether or not made in cash and by way of as mentioned in the Rules. Information to be maintained 22 GSV have to maintain and preserve the following information in respect of transactions referred to in Rule 3 of PMLA Rules: I. the nature of the transactions; II. the amount of the transaction and the currency in which it denominated; III. the date on which the transaction was conducted; and IV. the parties to the transaction. Retention of Records GSV should take appropriate steps to evolve an internal mechanism for proper maintenance and preservation of such records and information in a manner that allows easy and quick retrieval of data as and when requested by the competent authorities. Further, the records mentioned in Rule 3 of PMLA Rules have to be maintained and preserved for a period of ten years from the date of cessation of the transactions between the client and GSV. GSV is required to formulate and implement the client identification program containing the requirements as laid down in Rule 9 and such other additional requirements that it considers appropriate. The records of the identity of clients have to be maintained and preserved for a period of ten years from the date of cessation of the transactions between the client and GSV. The following document retention terms should be observed: All necessary records on transactions, both domestic and international, should be maintained at least for the minimum period prescribed under the relevant Act (PMLA, 2002 as well SEBI Act, 1992) and other legislations, Regulations or exchange bye-laws or circulars. Records on client identification (e.g. copies or records of official identification documents like passports, identity cards, driving licenses or similar documents), account files and business correspondence should also be kept for the same period. In situations where the records relate to on-going investigations or transactions which have been the subject of a suspicious transaction reporting, they should be retained until it is confirmed that the case has been closed. Role of Principal Officer GSV is properly discharging legal obligations to report suspicious transactions to the authorities, the Principal Officer would act as a central reference point in facilitating onward reporting of suspicious transactions and for playing an active role in the identification and assessment of potentially suspicious transactions. Names, designation and addresses (including e-mail addresses) of „Principal Officer‟ including any changes therein shall also be intimated to the Office of the Director-FIU. 23 As a matter of principle, it is advisable that the „Principal Officer‟ is of a sufficiently higher position and is able to discharge his functions with independence and authority. Monitoring of Transactions GSV should pay special attention to all complex, unusually large transactions / patterns which appear to have no economic purpose. GSV may specify internal threshold limits for each class of client accounts and pay special attention to the transaction which exceeds these limits. GSV should ensure a record of transaction is preserved and maintained in terms of section 12 of the PMLA 2002 and that transaction of suspicious nature or any other transaction notified under section 12 of the act is reported to the appropriate law authority. Suspicious transactions should also be regularly reported to the higher authorities / head of the department. Further the compliance dept. of GSV should randomly examine a selection of transaction undertaken by clients to comment on their nature i.e. whether they are in the suspicious transactions or not. Suspicious Transaction Monitoring & Reporting GSV should ensure to take appropriate steps to enable suspicious transactions to be recognised and have appropriate procedures for reporting suspicious transactions. While determining suspicious transactions, intermediaries should be guided by definition of suspicious transaction contained in PML Rules as amended from time to time. A list of circumstances which may be in the nature of suspicious transactions is given below. This list is only illustrative and whether a particular transaction is suspicious or not will depend upon the background, details of the transactions and other facts and circumstances: a) Clients whose identity verification seems difficult or clients appears not to cooperate b) Asset management services for clients where the source of the funds is not clear or not in keeping with clients apparent standing /business activity; c) Clients in high-risk jurisdictions or clients introduced by banks or affiliates or other clients based in high risk jurisdictions; d) Substantial increases in business without apparent cause; e) Unusually large cash deposits made by an individual or business; f) Clients transferring large sums of money to or from overseas locations with instructions for payment in cash; g) Transfer of investment proceeds to apparently unrelated third parties; h) Unusual transactions by CSCs and businesses undertaken by shell corporations, offshore banks /financial services, businesses reported to be in the nature of exportimport of small items. 24 Any suspicion transaction should be immediately notified to the Money Laundering Principal Officer. The notification may be done in the form of a detailed report with specific reference to the clients, transactions and the nature /reason of suspicion. However, it should be ensured that there is continuity in dealing with the client as normal until told otherwise and the client should not be told of the report/suspicion. In exceptional circumstances, consent may not be given to continue to operate the account, and transactions may be suspended, in one or more jurisdictions concerned in the transaction, or other action taken. It is likely that in some cases transactions are abandoned/aborted by clients on being asked to give some details or to provide documents. GSV should ensure to report all such attempted transactions in STRs, even if not completed by clients, irrespective of the amount of the transaction. Reporting to Financial Intelligence Unit-India In terms of the PMLA rules, GSV is required to report information relating to cash and suspicious transactions to the Director, Financial Intelligence Unit-India (FIU-IND) 6 th Floor, Hotel Samrat, Chanakyapuri, New Delhi-110021. Website: http://fiuindia.gov.in/ GSV is carefully going through all the reporting requirements and formats divided into two parts- Manual Formats and Electronic Formats. While detailed instructions for filing all types of reports are given in the instructions part of the related formats and should adhere to the following: The cash transaction report (CTR) (wherever applicable) for each month should be submitted to FIU-IND by 15th of the succeeding month. The Suspicious Transaction Report (STR) should be submitted within 7 days of arriving at a conclusion that any transaction, whether cash or non-cash, or a series of transactions integrally connected are of suspicious nature. The Principal Officer should record his reasons for treating any transaction or a series of transactions as suspicious. It should be ensured that there is no undue delay in arriving at such a conclusion. The Principal Officer is responsible for timely submission of CTR and STR to FIU-IND; Utmost confidentiality should be maintained in filing of CTR and STR to FIU-IND. The reports may be transmitted by speed/registered post/fax at the notified address. No nil reporting needs to be made to FIU-IND in case there are no cash/suspicious transactions to be reported. No restrictions on operations in the accounts where an STR has been made. The directors, officers and employees (permanent and temporary) should be prohibited from disclosing (“tipping off”) the fact that a STR or related information is being reported or provided to 25 the FIU-IND. Thus, it should be ensured that there is no tipping off to the client at any level.

 

16.Policy on Exposute to Clients

GSV may have its own policy to allow differential purchase limitsand sell limits varying from client to client, depending upon credit worthiness, integrity and past trading record of each client and volatility in the market which may vary from time to time. GSV may provide an exposure limit for intra day and delivery to a client which would be a multiple of the clear ledger balance in the account of the client along with collateral values after appropriate haircut. The value of multiple and haircut shall be decided as per Market volatility, quality of collaterals, credit worthiness, integrity and past trading record of each client which may vary from client to client and from time to time.GSV may provide a sell Iimit to the client equivalent to the value of securities held by the client in his POA enabled Demat account with our CDSL DP and the collaterals held with us in our Beneficiary / Margin account on behalf of clients after making appropriate adjustments for the usettled delivery positions of the client.GSV may provide Exposure for Futures and Options writing in Derivatives segment based on availability of Initial Margin (Span+ Exposure + MTM) in the form of clear ledger balance. Considering collaterals after appropriate haircut is at the sole discretion of GSV. However the buying of Options in Derivatives segment may be allowed on the premium value against the clear ledger balance available in Client’s account.

 

17.Policy on Limits Setting

GSV have been maintaining the margin system to protect the client from the risk and unexpected losses. This is purely based on the market conditions and the client‟s history of maintaining the account with us. GSV does not allow any client/sub-broker to transact in any Exchange/Segments without margin either in cash or collateral. According to margin availability, we consider the intra-day exposure limits. And these exposure limits are not fixed and will vary based on the market conditions/volatility. In case of Derivative segment, margin has to be maintained as per the Exchange specifications. GSV has sending a consolidated margin report on EOD basis to all clients/sub-brokers to know the outstanding position to prepare for the next trading session. This report has been prescribed by the Exchange to inform all clients regularly. The soft copy is being maintained for intra-day margins calls for any future reference

 

GSV should ensure that an account is not opened where it is unable to apply appropriate clients due diligence measures/KYC polices. This may be applicable in cases where it is not possible to ascertain the identity of the client, information provided to the GSV is suspected to be non genuine, perceived non co-operation of the client in providing full and complete information. GSV should not allow such client and file a suspicious activity report to determine any suspicious trading. In such cases the account must be free zed or closed. GSV is more cautious to ensure that it does not return securities of money that may be from suspicious trades. However, GSV should consult the relevant authorities in determining what action it should take when it suspects suspicious trading. In case, the client is permitted to act on behalf of another person, the extent of account operation must be keep tracking of transactions, volume limits, exposure limits and the value of transaction exceeding from the actual eligibility/allocation. The role and responsibilities of both the persons must be verified to avoid illegal/malicious trading activities. The relationship of the client has to be screened and ensure that the identity of the client does not have any links with person having a criminal background

 

18.Policy  on  Pre-funded Instruments

 

As a Policy GSV. Securities Pvt. Ltd. discourages receipt of funds from the Clients through Prefunded Instrument means Demand Draft, Pay Orders, Fund Transfer through Internet, etc This is to discourage the flow of third party funds or unidentified money into the System to avoid future litigations and comply with the Regulations of the regulatory bodies. The Prefunded Instruments may be accepted under special circumstances with the permission of the Senior Management / Board of Directors. The special circumstances include: • Continuous Bank Holidays. • Client having account in other Banks or in Co-operative bank • To Meet Immediate Margin/Settlement Shortfall • To take Fresh Position • Client‘s bank or City do not have clearing facility / branch. • Non Availability Cheque book or delay in procuring cheque book • Default Client Where the aggregate value of the prefunded instrument is less than Rs. 50000/- per day per client, the prefunded instrument is accepted only after ascertaining the genuine reason for the said prefunded instrument and after obtaining undertaking to that affect by maintaining the Xerox copy of the prefunded instrument. Where the aggregate value of the prefunded instrument is Rs. 50000/- or above per day per client, the prefunded instrument is accepted only after ascertaining the genuine reason for the said prefunded instrument and after obtaining undertaking to that affect and accompanied by the name of the account holder and number of the bank account debited for the purpose duly certified by the issued bank. The mode of the certification may include the following: i. Certificate from the issuing bank on its letterhead or on a plain paper with the seal of the issuing bank. ii. Certified copy of the requisition slip (portion which is retained by the bank) to issue the instrument. iii. Certified copy of the passbook/bank statement for the account debited to issue the instrument. iv. Authentication of the bank account-number debited and name of the account holder by the issuing bank on the reverse of the instrument. The Prefunded Instruments will be accepted only in cases mentioned above and not otherwise. The credit of such prefunded instruments will be given to the Clients only on the fulfillment of the above procedure and subject to the approval of the Senior Management / Board of Directors.

 

19.POLICY ON RISK MANAGEMENT

 

GSV‟s intentions for publishing a Risk Management Policy are not to impose restrictions that are contrary to GSV‟s established culture of openness, trust-worthy and integrity. GSV is strictly following Rules/Regulations/ByeLaws of SEBI and Exchanges to facilitate a Trading platform to transact with more transparency and to maintain a good business relationship with Clients, Individual Investors and Business associates. We are providing Exchanges connectivity via VSAT and Internet to access the Market Watch of different Exchanges and Segments. Trader Work Stations are being installed to place their Buy/Sell orders, Price Enquiry, Confirmations, Outstanding Position, Net Positions, Funds and Securities. Effective service and monitoring is a team effort involving the participation and support of every GSV employee and affiliate who deals with information and/or information systems. It is the responsibility of every employee to know these guidelines, and to conduct their activities accordingly.  The purpose of this policy is to outline the business operations and not to deviate from the procedures being followed at GSV. These procedures are in place to protect the Clients, Investors and GSV. Inappropriate application of these procedures exposes GSV to risks including disablement by SEBI/Exchange, Loosing Market Good will, Financial Loss and legal issues. This policy applies to employees, Clients, Investors, Sub-brokers, and other Business associates at GSV. This policy also applies to all business activities those are performed through GSV. As per the Exchange settlement cycle, we have to collect the pay-in either funds or securities within T+1. If the client is unable to complete the pay-in obligation with in T+2, he/she will not be allowed for fresh buying. 29 Cycle of Pay-in Capital Market Segment T+1 collect from clients T+2 Morning Completing the Exchange obligation T+3 Releasing of payout of funds and securities Future and Options Segment T+1 collection for client T+1 Morning completing the Exchange Obligation T+1 Evening Pay-out from Exchange T+2 Releasing of Payout to clients  .We have been maintaining the margin system to protect the client/sub-broker from the risk and unexpected losses. This is purely based on the market conditions and the client‟s history of maintaining the account with us. GSV does not allow any client/sub-broker to transact in any Exchange/Segments without margin either in cash or collateral. According to margin availability, we consider the intra-day exposure limits. And these exposure limits are not fixed and will vary based on the market conditions/volatility. In case of Derivative segment, margin has to be maintained as per the Exchange specifications. GSV has sending a consolidated margin report on EOD basis to all clients/sub-brokers to know the outstanding position to prepare for the next trading session. This report has been prescribed by the Exchange to inform all clients regularly. The soft copy is being maintained for intra-day margins calls for any future reference. GSV is not encouraging the cash transaction while processing the payment and receipts. We accept payment only through Check/DD/Online Transfer. In case of payment through Demand Draft, the payee has to declare the details of the Demand Draft in his covering letter. Do not accept any third-party cheques under any circumstances. This will help us to avoid unrealized/unauthorized dealing of funds. Squaring-off position is being done only in case of unrealized margin outstanding, minimizing the further losses and any unforeseen market conditions. Before squaring-off 30 any position, we always seek the final opinion from the owner of the transaction in multiple intervals. In the event of unanswered, irresponsible, intimating/sending messages in multiple intervals and considering the duration of live market session, if the owner of the transaction does not respond in time, the Management/RMS will be the final decision maker to Square-off the position immediately and the same will be intimated to the ultimate client through concerned Branch Manager/Sub-broker. The value of margin before squaring-off any qty should meet 100%. In other instances up to 75% is also considered based on the client‟s previous history of transactions. GSV is having a robust mechanism of internal controls on Risk Management to safeguard the Clients and Business associates. All tracking, filtering, alarming mechanism is in place to avoid malpractice, suspicious and other unauthorized entries through our system. The level of hierarchy is being maintained to manage the risk parameters.

20.Policy on Surveillance

 

GSV is having a robust mechanism of internal controls on Risk Management to safeguard the Clients and Business associates. All tracking, filtering, alarming mechanism is in place to avoid malpractice, suspicious and other unauthorized entries through our system. The level of hierarchy is being maintained to manage the risk parameters.

Corporate ID - Exchange Connectivity

Connect2NSE - Exchange Connectivity

 CTCL Surveillance Administration- CTCL vendor Software

Risk Monitoring

Access of online Back-office

On hand Surveillance reports   MIS reports

 

 

21.Internal Policy in respect of passing of NISM-Series –VII: Securities Operation and Risk Management Certification Examination

 

Reference

1.SEBI Notification No.LAD-NRO/GN/2010-11/21/29390 published in the Gazette of India    on December 10, 2010

2.NSE Circular no. NSE/INSP/16536 December 15, 2010

3.NSE Circular no. NSE/INSP/27495 September 02, 2014

4.BSE Notice no.20101215-19 dated December 15,2010

5.BSE Notice no. 20140902-8 dated September 02,2014

 Brief

SEBI issued Notification no. LAD-NRO/GN/2010-11/21/29390 dated December 10, 2010 , according to which, following categories of associated persons associated with a registered stock broker/trading member/clearing member in any recognized stock exchanges, who are involved in, or deal with any of the following:

  

  1. Assets or Funds of investors or clients
    b. Redressal of investor grievances
    c. Internal control or risk management
    d. Activities having a bearing on operational risk

 

shall be required to have a valid certificate of NISM Series VII – Securities Operation & Risk Management (SORM) from National Institute of Securities Market(NISM). NSE and BSE has also issued circulars requesting the members to comply with the requirement of said SEBI Notification.


Need For the Policy

 

The Company being a trading member NSE , provisions of the aforesaid requirement is applicable to all its employees  involved in the activities as mentioned above.

 

 

Policy

 

As required in the aforesaid notification of SEBI, all existing persons associated with the Company as on date of publication and engaged in deal with:

 

(a) Assets of funds of investors or clients
(b) Redressal of investor grievances
(c) Internal control or risk management
(d) Activities having a bearing on operational risk

shall obtain the valid certification of NISM Series VII - Securities Operation and Risk, Management (SORM) within two years from the date of such notification. Simultaneously whenever the company employs any associated person specified as mentioned above, the said associated person shall obtain valid certification of NISM Series VII – Securities Operation and Risk Management (SORM) within one year from the date of his /her employment/registration as sub-broker.

However, any of the works (as stated herein above) being performed by such persons, obtaining, NISM-SORM Certification shall be optional provided that they are supervised by his / her supervisor who shall have to obtain / continue to have NISM – SORM Certification or such other prescribed certification at all times.

 

 

 

 

 

 

22.SQUARING OFF CLIENT POSITIONS

GSV is having the right to sell client’s securities, both unpaid securities as well ascollaterals deposited towards margins, or close out client’s open positions, without giving notice to the client where there is a delay / failure of the client to meet the pay in obligations and / or there is a failure of the client to bring additional margins to cover the increase in risk in the dynamic market conditions. In case of unpaid obligations on T+3 basis, GSV may sell the unpaid / partially paid securities. In addition GSV may sell the collaterals deposited by the client towards margins and or paid securities purchased by the client in earlier settlements where the sale proceeds of unpaid securities are inadequate to cover the pay in obligations and where the unpaid securities apear to be comparatively illiquid and cannot be sold at reasonable rates to the extent required. GSV may follow LIFO method for liquidation of securities but it may not binding on it to follow this method in all cases. Margin shortfalls in F & O: Positions of the client may be closed out to the extent of margin shortfall on the T+1 basis. While computing margin shortfall value of unapproved securities shall not be considered. GSV reserves the right to consider the collateral. Intra day Positions: GSV shall have right to close out any intra-day positions taken by the client after a defined “Cut off” time (Presently 15 minutes before close of market).While selling the securities / closing the client’s positions, GSV may take into account the sales made by the client, positions closed by the client or collections received from the client till a cut off time. While selling the securities / closing the client’s positions, GSV may not take into consideration cheques / drafts/ pay orders deposited by the client with it until clear proceeds of such instruments are received by it in its bank account.  GSV shall have the right to sell client’s securities or close out client’s open positions but it shall not be under any obligations to undertake this exercise compulsorily. GSV shall therefore not be under any obligation to compensate / or to provide reasons of any delay or omission on its part to sell client’s securities or close open positions of the client. The ultimate responsibility risk and liability of the trades are binding on the client. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Links