POLICY & PROCEDURES

REFUSAL OF ORDER(S) FROM THE CLIENTS INCLUDING FOR PENNY STOCKS:

Pentad Securities Private Limited (“PSPL”) offers trading in most of the liquid stocks traded on the stock exchanges. Some of the stocks such as penny stocks i.e. stocks whose market price is less than their face value, scrips traded in physical mode or scrips which do not meet PSPL’s internal criteria may not be allowed by PSPL for trading. “Penny Stocks” also include, scrips having large bid-ask spreads, low market capitalization due to unsound fundamentals, “T”, “TS”, “Z”, “BE” Category stocks or stocks, which have high chances of manipulations or as per directions/guidelines issued by the regulators.

Also, the Exchanges from time to time provide a list of securities categorized as “Illiquid Securities”. PSPL may at its discretion or based on directives of the Exchanges/SEBI may also restrict trading in illiquid securities from time to time. Any existing scrip enabled for trading may be deactivated by PSPL as and when such scrips meet the criteria as defined by PSPL for illiquid scrips, even if the Client had purchased the scrips through PSPL. Further, PSPL may also at any time, at its sole discretion as a risk containment or surveillance measure and without prior notice to the client, restrict client’s ability to trade in any specific security through PSPL. Such restrictions could be only on buy or sell or both. PSPL may for this purpose, introduce online blocks to prevent clients from placing orders in penny stocks, Illiquid/unapproved Securities and/or illiquid contracts through the Online Trading Platform of Pentad/Exchange. Dealers/sub brokers of Pentad may refuse to execute orders of the clients for trading in such stocks, securities and contracts. Further in case the client succeeds in placing order in penny stocks, Securities and Illiquid contracts through the Online Trading Platform or otherwise, Pentad may on its discretion at any point of time cancel /modify /alter any such order before execution on the Exchanges and may square off the executed position if desired.Any losses if any on account of such restriction shall be borne by the client only.

CLIENT'S EXPOSURE LIMITS:

PSPL from time to time may impose quantity and/or value limits on the orders that a client can place through its system (including exposure limits, turnover limits, limits as to the number, value and/or kind of securities in respect of which orders can be placed etc.).

PSPL may need to vary or reduce the limits or impose new limits urgently on the basis of risk perception and other factors considered relevant including but not limited to restrictions on limits on account of exchange/SEBI directions/limits (such as broker level/market level limits, security specific/volume specific exposures etc.). PSPL may be unable to inform the client of such variation, reduction or imposition in advance. PSPL shall not be responsible for consequences of such variation, reduction or imposition or the client’s inability to route any order through PSPL on account of any such variation, reduction or imposition of limits. Such exposure limits may be set up to a pre-determined number of times of the Margin (the “Multiple”) and the quantum of the Multiple shall be decided at sole option or discretion of PSPL. Such multiple may be changed at the discretion of PSPL from client to client depending on various factors, which inter alia include factors like market conditions, client profile, financial status, Regulatory interventions etc. Client shall abide by the exposure limits, if any, set by PSPL or by the Exchange or Clearing Corporation or SEBI from time to time. The exposure limits set by PSPL do not create any right in favour of the Client and are liable to be withdrawn at any time without notice and the client shall bear the loss on account of withdrawal of such limits. PSPL may at any time, at its sole discretion and without prior notice, prohibit or restrict the client’s ability to place orders or trade in securities through PSPL, or it may subject any order placed by the client to a review before its entry into the trading systems and may refuse to execute/allow execution of orders due to various factors including but not limited to the reason of lack of margin/securities or the order being outside the limits set by PSPL/ Exchange/ SEBI or under alert due to surveillance or RMS reason and/or any other reasons which PSPL may deem appropriate in the circumstances.

Limits/Exposure provided shall vary based on the intraday profit /loss made by the client. Exposure limits against collateral/stocks shall be given only against approved securities as decided by the Exchanges/PSPL from time to time and subject to such haircut and valuations as may be decided by PSPL from time to time. PSPL from time to time may change the applicable haircut or apply a haircut higher than that specified by the Exchanges. In case of derivatives, Clients shall be allowed to trade only up to the applicable clientwise position limits set by the Exchanges/Regulators from time to time along with the added margin levied in addition to Exchange margins.

BROKERAGE RATE:

Brokerage will be charged within the limits prescribed by SEBI/ Exchange (currently 2.5%). Further, statutory levies shall be levied as per the current guidelines. The slab rate of brokerage shall be reviewed by PSPL from time to time and may be changed in such manner as PSPL may deem fit provided that the same would not contradict the regulatory provisions.

IMPOSITION OF PENALTY / DELAYED PAYMENT CHARGES:

  • The client shall pay PSPL settlement dues, brokerage, statutory levies and taxes etc. as are applicable from time to time. If the client fails to make payment of the amount due within the time frame specified by PSPL, it shall be entitled to levy such charges by way of penalty or delayed payment charges not exceeding 24 % per annum (or other rate as may be decided from time to time by PSPL) on amount due as PSPL may deem fit. This levy is only penal measure in case client defaults in meeting settlement and margin obligations and should not be construed as funding arrangement by the client and further the client cannot demand continuation of service on a permanent basis by citing this levy of delayed payment charges. Further, where PSPL has to pay any fine or bear any punishment form any authority in connection with/a consequence of/in relation to any of the orders/trades/deals/actions of the client, the same shall be recovered from the client. PSPL shall not be liable to make payment of any interest or delayed payment charges on the credit balance, if any, lying in the client’s ledger, margin account, deposit etc. with PSPL.

THE RIGHT TO SELL CLIENTS' SECURITIES OR CLOSE CLIENTS' POSITIONS, WITHOUT GIVING NOTICE TO THE CLIENT, ON ACCOUNT OF NON-PAYMENT OF CLIENT'S DUES:

  • User access to and use of the Site are subject to all applicable International, Indian, state and local laws and regulations.PSPL shall have the rights to square off the position of the Client (Including the right to refer the matter to arbitration) with no obligation of communicating the same to the Client, for non-payment of margins or other amounts, including the pay in obligations, outstanding debts etc. and adjust the proceeds of such liquidation/close out, if any, against the clients liabilities/obligations.PSPL reserves the right to decide the Position closing keeping in view of the size of the order, the depth of the market and various internal parameters as decided by PSPL from time to time. The following circumstances may trigger the square off/close out under various measure-
    • If the client does not square off his open intraday positions before the specified time (currently 2.50 p.m.) or the client does not convert the open positions to delivery, PSPL shall attempt to square off/close out the open positions on the same day before closure of the market.
    • In case wherein mark to market losses has reached the stipulated percentage and the client has not any immediate steps replenish the margin or reduce mark to market losses.
    • Cases wherein market or securities placed by the client falls short of requirement or the lmits given to the client have been breached.
    • Client has defaulted in his existing obligation/failed to make payment or delivery of securities.On the days of market volatility or when there are system issues, PSPL shall have the right to change/modify the timings of square off by either preponing or postponing the same. Further, whenever any price of stock or underlying contract breaches the internally prescribed percentage change, PSPL may at its discretion square off the existing open positions in the Intraday Margin segment(s) without giving any prior notice to the customers. However, PSPL does not guarantee square-off of open positions.On the days of market volatility or when there are system issues, PSPL shall have the right to change/modify the timings of square off by either preponing or postponing the same. Further, whenever any price of stock or underlying contract breaches the internally prescribed percentage change, PSPL may at its discretion square off the existing open positions in the Intraday Margin segment(s) without giving any prior notice to the customers. However, PSPL does not guarantee square-off of open positions.The Client accepts to comply with PSPL’s requirement of payment of Margin/settlement obligations of the Client, immediately failing which PSPL may sell, dispose, transfer or deal in any other manner the securities already placed with it as Margin/lying in the beneficiary account of PSPL and/ or cancel pending orders and/ or square-off all or some of the outstanding margin/ F&O positions of the Client as it deems fit at its sole discretion without further reference to the Client and any resultant or associated losses that may occur due to such square -off/sale shall be borne by the Client.PSPL shall be fully indemnified and held harmless by the Client in thisbehalf at all times. In exercise of PSPL’s right to sell securities, the choice of specific securities to be sold and/or orders to be cancelled shall be solely at PSPL’s discretion. Where the margin/security is made available by way of securities or any other property, PSPL shall have the discretion to decline its acceptance as margin/security and/or to accept it at such reduced value as PSPL may deem fit by applying haircuts or by valuing it by marking it to market or by any other method as PSPL may deem fit in its absolute discretion. The resultant or associated losses that may occur due to such squaring-off or sale of such securities shall be borne by the Client. Such liquidation or close out of positions shall apply to any segment/exchange in which the Client does business with PSPL.

      The client has to maintain applicable margin all the time i.e. till positions are open. PSPL reserves the right to change/modify the margin requirements at any point of time and if the client fails to meet the margin requirements, PSPL has the discretion to square off the open positions to the extent that the existing margin after deducting MTM losses meets the Initial Margin requirements of PSPL for the remaining open positions. PSPL may decide at its sole discretion to exercise or not to exercise the rights to square off the positions, which are failing to meet the margin requirements. Further, the client has been provided with tool/web page on the trading website through which he can ascertain details of his open positions, amount of margin blocked, margins required, MTM loss, margin percentage etc. The MTM losses and margin requirement displayed on these web pages will be considered as demand for the additional margin required by PSPL. PSPL may not inform each and every client (one to one), regarding the margin requirements/ additional margin top up calls/margin availability before squaring off the open positions.

      Clients are Responsible/bound to monitor and review their open positions and margin requirements all the times and furnish the additional margin to PSPL before the positions are squared off by PSPL.PSPL reserves the right to set threshold for liquidation of client securities, available securities and collateral being sealed.

      Where there is breach in shares/ underlying scrips, specific market wide position limit (MWPL) as specified by Exchanges, client will not be permitted to take fresh positions in that share/ underlying but he can square off his existing open positions. In case any of the positions limits (client level, Trading Member level, market level) are breached, PSPL may initiate square off. Products specific terms, if any, shall be displayed on the web site.

      SHORTAGES IN OBLIGATIONS ARISING OUT OF INTERNAL NETTING OF TRADES: The treatment of shortages shall be as below:

      • Short Delivery to the Exchange for scrip at the broker level: In case of short delivery to exchange, the settlement happens as per the auction/close-out mechanism of Exchange and auction/close-out debit received shall be passed to the defaulting client who did not fulfil his selling obligation.
      • Short delivery of pay-out to internal clients who bought the scrip on that day due to internal shortage (Client to Client shortage): All position will be closed out at the valuation rate defined by PSPL. The defaulting client on sell side will be debited by the amount equivalent to the quantity short delivered multiplied by the valuation price. The client on the buy side will be credited by the same amount debited to defaulting client on sell date as computed above.

      All losses to the client on account of the above shall be borne solely by the client and PSPL shall not be responsible for the same. In case of any claim against PSPL, the Client shall indemnify PSPL in this regard.

    • CONDITIONS UNDER WHICH CLIENT IS NOT ALLOWED TO TAKE FURTHER POSITIONS OR BROKER MAY CLOSE THE EXISTING POSITIONS OF THE CLIENT: PSPL have margin based Risk Management System (RMS) policy. Client may take exposure up to the amount of margin available with PSPL. Client may not be allowed to take position in case of non-availability/ shortage of margin as per RMS policy of the Company, securities breaching the limits specified by the Exchanges/regulators from time to time, regulatory restrictions/directives and other conditions as may be specified by PSPL from time to time in view of market conditions etc. The existing positions of the client are also liable to square off/close out without giving notice due to shortage of margin/non making of payment for their pay in obligation/outstanding debts. In the event of liquidation/square off of the open positions, the client shall be liable to pay for any resultant losses and all associated costs incurred by PSPL.PSPL at any point of time and on its sole discretion and without prior notice to the client may prohibit or restrict client’s access to trade in all securities or in any specific security either buy or sell or both. In case of securities/underlying in ban period, PSPL may not accept further orders in contracts for such securities/ underlying. This action of PSPL may also restrict the client from rolling over an existing position. PSPL shall not be liable for any resultant losses.In case the client has given a Power of Attorney to PSPL, may use its discretion to debit the bank/ demat accounts of the customer to recover dues/margin etc. All losses to the client on account of the above shall be borne solely by the client and PSPL shall not be responsible for the same. In case of any claim against PSPL, the Client shall indemnify PSPL in this regard.The following few situations may be a precondition for limit for taking further position or square off-
      • Technical failure.
      • Securities breaching any limits specified by the Exchanges/regulators/Pentad from time to time.
      • Wherein risk perception shows that it is the interest of client/market
      • Securities submitted in physical form for settlement.
      • Legal dispute with member.
      • Disciplinary action by government of India, Government agencies, regulatory bodies etc.
      • Regulatory restrictions/directives.
      • Violation of terms and condition of KYC.
      • Outstanding dues not cleared.
      • Liquidation of client’s positions, available securities. Such Shortfall/breach of threshold limits as per Risk Policy prevalent from time to time.
      • Any suspicious trading patterns observed by Risk/ Surveillance Dept.
      • Other conditions as specified by Pentad from time
    • TEMPORARILY SUSPENDING OR CLOSING OF CLIENT’S ACCOUNT AT THE CLIENT’S REQUEST: Not Contrary to any point in KYC, the Client may request PSPL by giving a 7 day prior notice in writing, to suspend his account temporarily for any reason not limited to gravity of the grievances raised by against the client. Trade in suspended account shall not be permitted however the settlement will be active. The account can be reactivated on the submission of the written request of the client subject to account being settled and there is no dues receivable with the complete discretion of PSPL.PSPL may suspend/close the client account, if PSPL observes any abnormal or suspicious activity in the client account through its monitoring and surveillance of the client account or in case of default. PSPL may also at any time, suspend or close the client account due to any action from SEBI (e.g. SEBI orders) or Exchanges/ Circulars or other regulatory actions. Further, PSPL may also temporarily suspend/close the client account if there is no activity in the client account for a period of 12 months, as deemed fit by PSPL from time to time. PSPL/Client can also initiate closure of account by giving 15 days written notice.All losses to the client on account of the above shall be borne solely by the client and PSPL shall not be responsible for the same. In case of any claim against PSPL, the Client shall indemnify PSPL in this regard.DEREGISTRATION OF A CLIENT: Not contrary to any point in KYC PSPL shall also be entitled to deregister/terminate the client with/without the mutual consent by giving notice as per mandatory policies. Pentad may at any point of time, at its sole discretion and without prior notice, prohibit/restrict/block the client access to the use of the website or related services including offline trading rights, due to regulatory requirements, PMLA regulations, market conditions and other internal policies, Further PSPL may freeze client account in following scenario :
      • If the client breaches any terms, conditions.
      • Upon the death, winding up, bankruptcy, liquidation or legal capacitation of the client or is designated as a defaulter by any credit rating agency or any action or proceedings have been initiated by the relevant Regulation/Authority including without limitation to SEBI.
      • The client has misrepresented facts at the time of giving instructions or otherwise.
      • Any proceedings or investigations that involve the client or his/its properties have been initiated or is ongoing.
      • The client has violated the applicable law particularly the securities law and Bye-laws, Rules and Regulations of the respective Stock Exchanges on which the client trades.
      • If the actions of the client are prima facie illegal/improper or such as to manipulate the price of any securities or disturb the normal/proper trading in securities or disturb the normal/proper functioning of the market, either alone or in conjunction with others.
      • On receipt of the order from the Regulatory authorities/SEBI/Police Authorities/Court/Others.
      • If the client is declared as debarred entity by the regulatory authorities.
      • Where the client has not cleared debits in his/her account in prescribed time,
      • Irregular trading pattern from surveillance /Money Laundering perspective
      • Where the client is categorized as ineligible due to being non- traceable, pending disputes, and any other circumstances leading to raising non confidence in client including return of undelivered couriers citing reason of no such person / addressee left /refusal to accept mails/ PODs signed by the third persons or Digital Contract Notes (DCN) failed (Bounced email) on more than 3 instances or non-updation of financial and other details viz email id, mobile no., land line, details or it is found to be belonging to a third person.
      • Under such other circumstances as PSPL might think just and proper on case-to-case basis.
      • If the client is found to be KYC non-compliant or non-submission/wrong/false/incomplete submission of important documents. PSPL shall have the right to close out the existing positions, sell the collaterals to recover any dues with or without consent of the client before the de-registration of the client.
    • INACTIVE/DORMANT CLIENT ACCOUNT: A Client account will be considered as inactive if the client account does not record any trade or does not register any financial transaction for a period of 1 years. Calculation will be done at the beginning of every month and those clients who have not traded even a single time or did not execute any financial transaction through Pentad Securities Private Limited in the preceding 12 months will be considered as inactive. If the account is tagged as a dormant/inactive then the surplus Funds or Securities lying with PSPL shall be refunded/returned to clients at his/her last known Bank Account/DP account or at such other address as mentioned in the account opening form.

    REACTIVATION: The client can reactivate his/her trading account by calling the Call centre/Customer care (after due authentication) or by sending a request email from his/her registered email id or by submitting a physical letter duly signed. The company shall also have the discretion to reactivate a trading account, after doing adequate due diligence, as the company may consider fit and proper.

THE RIGHT TO SELL CLIENTS' SECURITIES OR CLOSE CLIENTS' POSITIONS, WITHOUT GIVING NOTICE TO THE CLIENT, ON ACCOUNT OF NON-PAYMENT OF CLIENT'S DUES:

These policies and procedures may be amended/ changed unilaterally by PSPL, provided the change is informed to the client through any one of the means or method like posting on the website of PSPL or sending by speed post / courier / registered AD/ e-mail, or through a download on the website or through displays on the notice boards of branch / main office, or by newspaper or by any other suitable means. I/we agree that the communication delivery by PSPL is complete upon posting on the website or delivery to postal department / courier company or e-mail, by messaging on the computer screen of the client, These policies and procedures are to be read along with the document executed and shall be compulsorily referred to while deciding any dispute / difference in claims in between client and PSPL in any court of law, judicial / adjudicating authority, including arbitrator, mediator etc.

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