1. COLLECTION OF MARGINS:
POLICIES AND PROCEDURES
Margins, by whatever name called & defined by the Exchanges viz. Initial margin, Exposure margin, Pre-expiry margin, Tender period or delivery period margin, Additional margin and Special cash margin or any other margin specified by Exchanges/Regulator from time to time. Finopia reserves the discretion to call for a higher percentage of margins from the client, than stipulated by the Exchanges/Regulator, depending on its risk assessment or Surveillance parameters or volatility in the markets.
All margins are collected in Funds and collaterals. Funds are collected by way of Account payee cheque, NEFT / RTGS / IMPS etc. Collaterals can be in the form of Fixed Deposit Receipts, pledged securities and any other form decided by Finopia from time to time. The threshold/apex limit each form of collaterals, the ratio of funds and collaterals and their hair-cuts are solely at discretion of Finopia subject to the guidelines laid down by Exchanges/Clearing House/Regulator.
2. REPORTING OF CLIENT’S MARGINS TO EXCHANGES AND PENALTY FOR MARGIN VIOLATIONS:
Margin reporting to Exchanges will be carried out as per the norms and guidelines of the Exchanges/Regulators. In case of open positions at multiple Exchanges/Segments, Finopia can apportion the available funds and collaterals on its desecration and practice. Penalties on instances of shortages will be debited to clients’ ledger with applicable tax rates.
3. EXPOSURE SETTING
1. Finopia has absolute discretion in setting the exposure limit of a client.
2. Exposure varies from time to time and it is depending upon the net cash & collateral available in a client’s
3. trading account.
4. Finopia reserves the right to withdraw the exposure limit of a client at any point of time, without any further
5. notice, if there are any dues/margin shortages in the client’s account or based on Market conditions/ Risk
6. Management policy of Finopia
7. In case of Cheques, exposure will be updated on clearance.
8. Squaring off trades in MCX Commodities, selling of unsettled cash positions and the shares are lying in
9. client’s beneficiary account of Finopia DP can be effected without any additional exposure.
10. 100% credit balance is required in the trading account for trading in Trade-to-Trade scrips and other select
11. stocks.
12. Finopia has the absolute discretion to set Margin requirement limits for every trade. Margin requirements
13. are set based on our Risk Management policy and Market conditions.
14. For trades in Equity segment, Margin is based on the security selected. This is made available in the Trading
15. Terminal.
16. For trades in Commodity Derivative segment, Upfront Margin is based on SPAN + Exposure margin,
17. Additional margin and any other margin as followed by the Exchanges.
18. Finopiareservestherighttoblocktradesinanysecurities/contractsfromitsend,basedriskassessmentor
19. Surveillance parameters of Finopia/Exchanges/Regulator or on PMLA guidelines, though such client
20. position may be within Exchange position limits.
21. Donotexecutetradeinbannedscrips/contracts.
4. LIQUIDATION OR SQUARING/CLOSING OUT OF CLIENT’S OPEN POSITIONS
If shares purchased by clients are pending in Finopia’s pool account due to non-payment of funds, such shares will be sold to the extent of amount due, at any point of time after settlement pay-in time stipulated by exchange. In case of online accounts, shares will be sold at any point of time, if payments are not received before the settlement pay-in time stipulated by exchange.
If total debit/ Mark to Market Loss % in the client’s account is greater than or equal to the stipulated % of the total Collateral, then the existing positions will be sold. In the Commodity Derivative segment, if there is no sufficient margin, the open positions will be squared.
Finopia shall attempt liquidating necessary positions security/Commodity hitting the daily price filter (circuit) to avoid any dues in client’s account. The losses, if any, arising on the square-off trades shall be borne by the client. Open positions that are not squaredoff for reasons beyond the control of Finopia viz. technical issues, price band etc. shall be squared-off in the immediate session thereafter or whenever the security/commodity is traded
Finopia reserves the right to square off any position taken without sufficient margin at any point of time without any further notice. Finopia reserves the right to square off existing positions if cheques received against these are dishonoured. Finopia reserves the right to invoke pledged shares/FDs/any other collaterals to cover MTM losses.
In addition to above points, there will be auto square off of shares purchased in ‘margin’ for intraday trading. The timings of auto square off will be displayed on the internet trading website. Finopia reserves the right to close the positions or sell the securities and the shares available as holdings to recover the outstanding dues.
5. SECURITIES PAY-OUT MECHANISM:
A. The securities received in pay-out against which payment has been made by clients, shall be transferred to the demat account of the respective clients within one working day of the pay-out. Such securities shall be transferred directly from the pool account of Finopia to the demat account of the respective client. B. The securities that have not been paid for in full by the clients (unpaid securities), shall be transferred to “client unpaid securities account” from the pool account of Finopia.
C. In case of securities (where inter-depository transfer is not available) held in a particular depository (i.e. SGB, G- secs) and the client does not have an account in the said Depository, the client will have to open an account, the member may transfer the relevant securities to the ‘Client Collateral Account”
6. POLICY ON PENNY STOCKS
Definition: Any stock which is trading on a stock exchange at a price less than the face value is defined as a penny stock. Further, such stocks can be fundamentally weak in terms of net worth, sales, market capitalization and/or profitability and may have violated provisions of the Listing Agreement of the exchange in which they are listed or have large number of investors’ complaints pending against them. Finopia will have the right to refuse execution of trades in the above stocks. List of penny stocks is available in the customer care site. Further, as per SEBI circular CIR/MRD/DP/6/2013 dated February 14, 2013, clients are requested to note the penalty criteria for certain trades in periodic call auction:
Penalty for trades in periodic call auction: - In the event where maximum of buy price entered by a client (on PAN basis) is equal to or higher than the minimum sell price entered by that client and if the same results into trades, a penalty shall be imposed on such trades. The penalty shall be calculated and charged by the exchange and collected from trading members on a daily basis. Trading members will recover such penalty from clients.
7. SHORTAGES IN OBLIGATIONS ARISING OUT OF INTERNAL NETTING OF TRADES
If a client fails to make timely delivery to Finopia in respect of the shares or securities sold by him as notified by the Exchange from time to time i.e., in case of short delivery, 150% of the short sell amount will be deducted from the ledger while calculating Initial buying power till the settlement and the said un-discharged obligation on the part of the client shall be subjected to close out or auction in accordance with the rules and regulations of the Exchange. The loss, if any, on account of such close out or auction shall be debited to the account of the client. Under such cases, no further claims shall lie between the client and Finopia.
In case of an internal shortage situation within Finopia, i.e. the buyer and seller are both Finopia clients and the seller defaults in delivery due to which the buyer may not receive the shares, firstly the defaulting seller would be debited 150% of the short sell amount for the default till such time the Settlement/auction process is completed. The defaulting seller would be debited statutory costs and other incidental charges including penalty for non-delivery. In case of shares purchased by client where no delivery was timely effected as required under the Rules and Regulations by the Exchange the short delivery will be closed-out by Finopia in accordance with the Exchange procedures and the credit on account of such close-out or auction shall be made to the account of the client. Under such cases, no further claims shall lie between the client and Finopia.
In case where there are internal shortages, Voluntary Auction (system prevailing in Clearing Corporation) will be arranged in all possible cases. Other short position if any for which Voluntary Auction was not done would then be closed out on the closing price of the exchange auction day + 10% (If rate is increasing daily till auction day, it will be 20%) or settlement high whichever is higher.
In case of securities being de-listed/suspended from trading / unable to buy on account of corporate action, Finopia will close out internal shortages with closing price of the Exchange on auction day + 10% or settlement high whichever is higher (Credit to buyer & debit to seller).
8. BROKERAGE RATE:
Brokerage Rate : Brokerage will be charged to the client based on the brokerage rates specified in the account opening form (Refer tariff sheet for brokerage and other charges) or as per the product/scheme opted by the client from time to time. The brokerage rate will be within the permissible limit set by SEBI/exchanges.
9. RISK CURTAILMENT MEASURES AND RESTRICTIONS ON TRADING BY CLIENT:
1. Finopia reserves the right to block trading in several contracts from its end, based on its own risk assessment and also based upon certain Surveillance parameters. In general, the far month contracts and illiquid contracts may be restricted, except for specific request from the clients to allow trading in such contracts. In such cases of relaxation, Finopia may satisfy itself on the intent, purpose, besides insisting on higher margins from the client, as may be felt necessary.
2. Finopia reserves the right to restrict the trading limits of client under any of the following circumstances: (i) the Client account is in debit (ii) Client’s cheque has been returned by the Bank or such cheque returns have been observed at multiple instances in the client’s account or client has deposited a third party cheque (including cheque from an unregistered Bank account) (iii) Client’s positions are concentrated in illiquid contracts or client’s open positions in specific commodities appear large though such client position may be within Exchange position limits (iv) MTM loss increases suddenly & substantially (v) Finopia has suspicion on certain transactions or receipts in context of the PMLA guidelines 3. Finopia shall appropriately assign reasons, orally or otherwise, to the concerned client, in event of Finopia deciding to restrict the trading limits if it is for reasons other than the above.
10. IMPOSITION OF PENALTY/DELAYED PAYMENTS:
Any amounts which are due from the Client to Finopia towards trading and or investments in any of the segments / exchanges or otherwise or on account of services availed or to any of Finopia’s group or associate companies will be charged delayed payment charges at such rate per month as may be determined by Finopia from time to time. The Client hereby agrees and authorises Finopia to directly debit the same to the account of the Client.
The Client agrees that if payment is delayed by the Client, the value of which may be greater than the dues by the client to Finopia may suspend fully or partially access to all or any of the Products and/or Services or take legal action or any such action as it may deem fit. The rate of such charges is presently fixed as 21.24% p.a. and any change to the same shall be intimated to the client in the manner provided herein.
If there is any position taken during the banned period, penalty if any, will be debited to client account.
11. SUSPENDING/CLOSING/DEREGISTERING OF ACCOUNT:
In all cases of non-payment, fraud, malpractice, death or insolvency of the client, violation of rules and regulations by the client, or if the continued association with the client is prejudicial to the interest of Finopia and the market in general, at the absolute discretion of Finopia, the account shall be suspended or cancelled or the client shall be deregistered with or without notice of 30 days or of a lesser tenure as the case may be. Accounts may be temporarily suspended or closed at the request provided the client gives a written request for the same.
12. TREATMENT OF INACTIVE ACCOUNT:
All active trading accounts where there is no single transaction in any of our products for the last twelve months, will be changed to INACTIVE mode. An “Inactive” client is defined as follows - one that satisfies all of the below mentioned conditions: a. Has not traded in any exchanges like BSE & MCX
b. Has not applied for E - IPO c. Has not done any DP related transactions in CDSL (like AMC payment, demat, remat, MF redemption, DIS issuance, off-market, market, Inter-DP, pledge, Transmission, Closure cum transfer, Minor turned major updation, E -Insurance account opening, client complaint which has been registered, etc) d. Has not given any pay-in or taken any pay-out as a part of settlement e. Has not updated his KYC viz; Annual KYC , KRA -KYC & CKYC through Finopia f. Has not done any changes in his profile – eg: change in address, email, nomination, third party PoA, etc For reactivation of accounts clients have to submit necessary KYC / KYC updation documents as specified by the regulators from time to time.
13. TRADING SUPPORT IN EVENT OF ANY DISRUPTION:
1. Finopia extends support for Trading by the client, during market hours i.e. to all its clients, including the IBT / Wireless trading clients, through its network of Branches and Head-office. 2. In case of any disruption in services at the client’s servicing Finopia branch, for reasons beyond their control, the client shall be mapped to the nearest Finopia branch for continuity in trading. The client can also opt to transact through Finopia’s Head-office (Call & Trade). An IBT / Wireless trading client also can utilize the same facilities.
Any changes or modifications to the above policies & procedures shall be intimated by email. The updated copy of the same will also be available on the website / customer portal of Finopia.