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 GSVGSV 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 ©; 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 © 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
© 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 NISMSORM 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. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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