RISK MANAGEMENT (RMS) POLICY

Collection of margins from the Clients are necessary before executing the trades on their behalf, however it is compulsory to be collected in modes specified by the Exchanges in Futures & Options segments of the Exchange and  Capital Market Segment . Presently after the recent guidelines issued by SEBI / Exchanges and as required we are collecting upfront margins from clients before entering into any transaction on his/her behalf as per the margining system of the exchanges both in the Capital Market (CM)Segment as well as Future & Options (F&O) Segment in the modes specified by the Exchanges.

All trades executed on Exchanges in the Capital Market (CM) Segment will attract various types of margin from “Clients” namely (a) VAR Margin (b) Extreme Loss Margin or Exposure Margin (ELM) (c) Ad-hoc Margin (d) Mark to Market Margin (M2M) and others if any. Margin from Clients can be collected in the form of Cash , FDR ,  Pledge / Re-pledge of Securities mandated in the approved list of Stock Exchanges and other allowable forms. For valuation of collaterals, the method followed by the exchanges are implemented i.e. the market rate shall be considered as closing price of T-1 day, haircuts shall be as per exchange provided files or at percentage which may be decided from time to time.  Margin from Clients are required to be collected upfront i.e. before executing any trades. As client has to make available requisite clear funds towards his/her funds pay-in obligations by T+2 or T+1 days depending upon the securities traded by the clients and Securities Pay-in within the requisite pay-in time by T+2 / T+1 days as decided by Exchanges and Depositories..

1. Policy for penny stocks : Stocks which appear in the list of illiquid securities and SMS securities issued by the Exchanges every Quarter are considered as penny stocks. These stocks are generally considered to be highly speculative and high risk because of their lack of liquidity, large bid-ask spreads, small capitalization and limited following and disclosure. Depending on the market condition and RMS policy of the company, Salasar Stock Broking Ltd. (SSBL) reserves the right to refuse to allow trading and /or provide limits on penny stocks.
2. Trading in newly listed shares, T2T securities: Newly listed securities and Trade-to-Trade securities which have high VaR margin are subject to high market risks and rate fluctuations. Trade-to-Trade securities will have a daily price range (DPR) whereby the chances that these shares can reach the upper DPR or Lower DPR during a trading day are higher than other securities. Newly listed shares usually do not have a DPR and hence, the chances for rate fluctuations are higher. The dealing in newly listed shares will be restricted to the available credit balance after considering the Mark-to-Market (Mark-to Market) levels. Hence, the dealing in these securities will be subject to permission from the RMS department and will be subject to the availability of credit balance of the Client.

With regards to Pay-Out of Securities to Clients & retention of the same in “Client Un-Paid Securities A/c” in event of not receiving the Clear Funds (Clear Funds means receiving / crediting of cleared / actual funds in Member Client Bank Account i.e. un-cleared receipts would not be considered while arriving at the value of Clear Funds) towards funds Pay-In obligation on T+2 / T+1 day (i.e. Funds Pay-In Day) from the Clients. In case of not receiving the Clear Funds fully / partially in our Client Bank a/c’s by Funds Pay-in day i.e. T+2 / T+1 Working Days which is also known as Pay-In / Pay-Out day , the Client Securities received in Pay-Out from the exchanges will be transferred fully to “Client Un-paid Securities A/c”, a separate a/c opened for the purpose of keeping Client Securities in the event of not receiving entirely the Clear Funds from the Clients by Funds Pay-in Day.

In the even to not receiving the Clear funds from Clients and transferring the Securities to “Client Un-paid Securities A/c” on or after funds Pay-in day, we will wait till the Funds Pay-In + 4 working days i.e. 4 working days from the Pay-In date to receive the Clear Funds from the Clients to settle their total Outstanding Debit balance. After receiving the funds within the time mentioned herein , the Securities received in Pay-Out and transferred to “Client Un-paid Securities A/c” will be transferred back to Client Beneficiary Account. In the event of non-receipt of Clear Funds by Funds Pay-In +4 days i.e. 4 working days from the Pay-In date , the Securities so received in Pay-Out and transferred to “Client Un-paid Securities A/c” will be sold / disposed off in the market on next day i.e. on 5th working day from the date of Pay-In of Funds. However we must receive the Clear Funds within the time limit mentioned above i.e. amount must be clearly credited in our Client bank a/c’s in order to stop / avoid the disposal of Securities on next day without recourse to the Clients. Further the Client may sell other securities lying in his/her beneficiary account or lying in Client collateral/collateral account to clear his debit obligation till Funds Pay-In + 3 days and the same can be considered towards such unpaid securities provided clear funds are received within Funds Pay-In + 5 days. In case we resort to selling the client securities to meet the shortfall we would dispose-off or square-off his positions on day mentioned above to the extent of amount debit in their account without any recourse to him and any balance securities left after meeting the shortfall would be transferred to the respective client’s demat account. However, any shortfall remaining even after disposing of Client Securities lying into “Client Un-paid Securities A/c” would be made good by the Client. During the Liquidation of Client securities from “Client unpaid securities account” and in case of multiple securities lying there , the policy of FIFO (First in & First Out) would be followed by us to the extent of shortfall. Excess securities if any available after liquidation, would be transferred to his beneficiary account. Further if Client Sells the securities and the same is not available for Securities Pay-In in his account by Pay-In day in his/her beneficiary account or lying in Client collateral/collateral account the same will be Auctioned by the Exchange on Securities Pay-In day and any penalty and loss / profit amount towards this will be transferred to Client Ledger Account. However in the event of not getting the securities even in Auction market for the shortages the same will be close out as per exchange policy and the amount there-in will be transferred to Client A/c. In case of Internal Shortage the same will be closed out as per the Internal Shortage Policy of the Salasar Stock Broking Limited and as mentioned under System and Procedures.

As regards trades executed in the Derivative Segment the upfront margin to be taken is calculated with the software provided by the exchanges. The margins payable by clients are SPAN Margin, Exposure Margin, Ad-hoc Margin, Mark to Market Loss etc. if any. Additionally, the Mark To Mark losses etc. are to be collected from clients by T+1 day basis. Clients are required to maintain adequate margins against their outstanding positions on a daily basis and in the event of shortfall, client has to bring in additional margins immediately in the forms prescribed by the exchanges or necessarily reduce his position. In the event client doesn’t bring additional margin nor reduces his outstanding positions to the extent of shortfall in margins, the member upon his discretion may reduce his position on T+1 to the extent of meeting the margin shortfall in alphabetical order (In case of multiple outstanding positions of clients) . Any profit or losses arising due to this voluntarily square off of positions by the member will be made good by the client. In case of Derivative contracts which are Illiquid, dealing would be restricted and would be subjected to permission from the Risk and Surveillance department.

Facility of Voluntary freezing/blocking the online access of the Trading Account of Clients

SEBI vide Circular no. SEBI/HO/MIRSD/POD-1/P/CIR/2024/4 dated January 12, 2024 on the subject “Ease of Doing In-vestments by Investors – Facility of voluntary freezing/ blocking of Trading Accounts by Clients” has mandated the framework for providing the facility of “Voluntary Freezing/ Blocking the Online Access”of the Trading account to their clients in event of any suspicious activities noticed by Clients in their trading account.

1. In the view of the above guidelines as mandated in the above mentioned circulars, SSBL (in short “the Company/ Trading Member”) being a Trading Member of NSE & BSE is a provider of Internet Based Trading (IBT) for Trading to their Clients, has adhered the aforementioned regulation mandated by SEBI by providing the following mode of communication to Clients for freezing/blocking of their Online Trading Account:
   a. E-mail from registered E-Mail ID of the Client(s) on our dedicated E-Mail ID “stoptrade.salasar@gmail.com”

   b. Tele-calling from registered mobile number on our dedicated Telephone / Land Line Number “033-40126771”
   
   c. Written submission of letter at the Registered office of the Company

2. SSBL upon receipt of intimation from the client through the above modes of communication, would undertake the following actions

   a. SSBL will validate the request received from the client by verifying the registered E-mail id / registered Mobile number / Signature of the Client and after validation of the request, SSBL will issue an acknowledgement and proceed with the freezing / blocking the online access of the client’s Trading account and simultaneously cancel all the pending orders of the said client. The timelines for Freezing/ Blocking of the Online Access of the clients’ Trading Account is as under:

b. In case where request is received from other than registered phone number/e-mail Id of the client or the signature on the request letter does’nt matches with the records, SSBL will be following the client authentication procedure to verify the credentials of the client(s) in the following manner :

▪ Call the client on the registered  mobile number.

▪ Confirm the identity of client and after satisfying ourselves, reconfirm the request for block/freeze and reasons for such request.

▪ If the clients are not contactable on the registered mobile number, call up on the number from which the instruction is received. Call alternate available numbers of family members and establish the direct contact with client and confirm the identity of client by reconfirming at least two of the private and confidential client’s specific information with clients as available in client master database as part of additional due diligence to ensure and confirm the identity of the clients.

▪ After satisfying with the Identity of the Client(s) follow the procedures as mentioned in point no. 2(a) of this document.

3. Post Freezing/Blocking the client’s Trading Account, SSBL will send a communication on the registered mobile number and registered E-Mail ID of the client, stating that the online access to the Trading account has been frozen / blocked and all the pending orders in the client’s Trading account, if any, have been cancelled along with the process of re-enablement for getting the online access to the Trading account.

4. SSBL will communicate with the client regarding the Details of open positions (if any) along with contract expiry information within one hour from the freezing/blocking of the Trading account. This will eliminate the risk of unwanted delivery settlement. This time limit shall be reviewed as per the policy laid by the Stock exchange and /or Market Regulator to enhance protection of investors from suspicious activities.

5. SSBL shall maintain the appropriate records/logs including, but not limited to, request received to freeze/ block the online access of Trading account, confirmation given for Freezing/Blocking of the Online Access of the Trading Account and cancellation of pending orders, if any, sent to the clients.

6. In case of failure of the SSBL in freezing/ blocking the online access within the prescribed timelines (15 minutes in case the request is received during the Trading hours and within 15 minutes before the start of Trading / Before the start of the next Trading session in case the request is received after the Trading hours and 15 minutes before the start of the Trading), SSBL shall be responsible for any trades executed from the time of receipt of such request till such time the online access is blocked / frozen. This will be applicable only in cases where the request is received from the registered E-mail id / Registered Mobile Number, In all other cases the above mentioned time limit will be applicable after verifying the Identity of the Client.

7. Re-Enabling the client for online access of the Trading account: – SSBL shall re-enable the online access of Trading account after carrying out necessary due diligence including validating the client request and Unfreezing / Un- blocking the Online Access of the Trading Account.

8. It is clarified that:
   a. Freezing/blocking is only for the online access to the client’s Trading account, and there shall be no restrictions on the Risk Management activities to be performed by SSBL.
   b. The request for freezing/ blocking does not constitute request for marking client Unique Client Code (UCC) as inactive in the Exchange records.
   In the aforesaid SSBL is incorporating this Voluntary Freezing/ Blocking the Online Access Policy in their Risk Management Policy as mandated by the Stock Exchange(s).
   SSBL shall also disclose and made available on their official website i.e. https://salasartrade.com, the above policy along with the process and mode(s) through which Client(s) can place the request to Freeze/Block & Unfreeze/Unblock of Online Access the Trading Account along with the timelines that will be followed by SSBL for the same.

The Execution of this Voluntary Freezing/ Blocking the Online Access Policy would be done under the Supervision of the Compliance Officer (Shri Kiran Kumar Sonthalia Contact:  9830023788).

This policy shall be effective from July 01, 2024.