Letters to Existing Clients_Dec Circular

8/8/2019 Letters to Existing Clients_Dec Circular

1/8

Date: March 20, 2010

Dear Customer,

Sub : Submission of documents pursuant to SEBI/Exchange Circulars

SEBI and Exchanges have issued circulars dated December 3, 2009 and February 3, 2010respectively on various measures to enable smooth dealings between a client and a stock

broker. In this regard, following important aspects are brought to your information.

1. Documentary evidence of financial details: Clients who are enabled inDerivatives segment at any of the Exchanges are required to submit any one of thefollowing documentary evidence on their financial information:a) Copy of ITR Acknowledgement;b) Copy of Annual Accountsc) Copy of Form 16 in case of salary incomed) Net worth certificatee) Salary Slipf) Bank account statement for last 6 monthsg) Copy of demat account Holding statement

h) Any other relevant documents substantiating ownership of assetsi) Self declaration along with relevant supporting

2. Running Account Authorization: SEBI/Exchanges have also mandated thatbesides the present running account authorization of the clients enabling settlementof funds and securities as and when required by the client, we should settle theclients funds and securities account at least once in a calendar month or quarter asopted by the client with effect from March 31, 2009. In this regard, we are enclosingthe running account authorization format for your perusal and filling up andsignature.

As per SEBI/Exchanges circular this Running Account Authorization is required to be

submitted by the client every year. You are therefore requested to sign the enclosedauthorization letter and submit the same to us at the earliest.

3. Policies and Procedures: India Infoline Limited has in place various policies &procedures in terms of SEBI/Exchanges and other authorities for smooth operationsof its clients trading account. These policies have been communicated to youthrough internet/email/physical copies/internet trading terminals/branches etc. fromtime to time. We are enclosing a copy of our applicable policies and proceduressignificant to your trading account for your information.

4. The Standard documents/ information with regard to KYC, broker client agreement,policies & procedures, AML policies etc. are displayed on our website atwww.indiainfoline.com for your information and reference.

You are requested to submit the proof of financial information and Running accountauthorization letter on or before March 31, 2010 for enabling smooth operations of youraccount. The required documents may be submitted at any of the Branch offices of IIFL ormay be sent to following address:

Central Processing CentreIndia Infoline Ltd,India Infoline Tower no,143, MGR Road, Near Lifeline hospital
http://www.indiainfoline.com/http://www.indiainfoline.com/


2/8

Perungudi, Chennai 600 096Tamil Nadu

If you require any clarifications, you may please contact us at [email protected] or (044)40071000

Regards,Customer Care

Encl.: as above

NON-MANDATORYRUNNING ACCOUNT AUTHORISATION

Authorisation to India Infoline Limited

a) I would like to keep securities purchased by me with you as collateral for giving meexposure limits in my trading account/margin obligation. I authorize you not to transfershares/securities purchased by me to my demat beneficiary account and keep them withyourselves. I also authorise you to pledge these shares/ securities with the ClearingMember/ Exchange/ Custodian, at your discretion. In case any of the shares/ securities are

sold in subsequent settlements, you may take this as a standing instruction to adjustagainst my previous purchase positions.

b) Whenever I require delivery of any shares/securities, I shall send you a written request. Iunderstand that such payout of securities will be made subject to your risk managementpolicies.

c) In case there is a debit balance in my account, you are authorized to sell at any point oftime the shares/ securities purchased by me in previous settlements, at your solediscretion. Any profit or loss made on such transactions will be to my account as it wouldhave occurred on normal purchase/ sale made by me. I also agree to pay the balanceamount, if any after deducting credit of sale of shares.

d) I also request you not to issue cheques/make payments settlement wise unlessspecifically demanded by me, as pay-in and payout are very close and therefore exchangeof cheque becomes unnecessary paper work.

e) I further authorise you to set off/ adjust any of my debits/dues in any segment of anyExchange with credits of any other segment(s) of any Exchange(s) in my account within theperiod of settlement of my account (Securities and Funds) as opted by me under Section A.

f) I also note that I may revoke the authorisation at any time by giving you written noticeatleast seven days in advance to your office. I also undertake to clear all my dues to youbefore serving revocation of this authorisation else the member will recover all my dues inmy ledger till date and then effect the revocation.

g) I also undertake to bring any dispute arising from Statement of accounts or settlement somade to your notice within seven working days from the date of receipt of funds/securitiesor Statement as the case may be.

I /We further wish to have settlement of my account (funds and securities) once in amonth / once in a quarter.* I understand that settlement amount shall be subject toretention of requisite securities/ funds towards outstanding obligations and margins in my
mailto:[email protected]:[email protected]


3/8

account calculated in the manner specified by SEBI/ Exchange and details mentioned in theStatement of Account at the time of settlement. I authorise you to send the statement ofaccount on funds and securities as on the date of settlement to my internet trading accountor e-mail id registered with you. I understand that I can obtain a copy of the same from anyof your Branch offices.

So kindly maintain my account as a running account basis for funds and securities.

ClientSignatureClient Name

Client Login ID

Date

*Strike off which is not applicable.


4/8

MANDATORY

POLICIES AND PROCEDURES APPLICABLE TO CLIENTS OF INDIA INFOLINE LIMITED

1. REFUSAL OF ORDERS FOR PENNY STOCKS

India Infoline Limited (IIL) normally offers trading facility to its clients in all thecompulsorily dematerialised stocks which are listed on the Stock Exchanges. However IILdiscourages / restricts trading in penny stocks by the clients as they are susceptible tomanipulation and risky for investors and in turn to IIL. Penny Stocks for this purpose shallinclude:

a. Stocks appearing in the list of illiquid securities issued by the Exchanges from time totime.

b. Stocks which are highly illiquid and have a low market capitalization and Z GroupSecurities.

c. Any securities as may be restricted for trading by Exchanges.d. Any other securities as may be restricted for trading by IIL based on its internal

evaluation.

As a part of Risk Management System, IIL restricts clients to buy / sell in penny stocks onlyon the basis of 100% upfront margin and on delivery basis. Also the trading in penny stocksmay be permitted only upto quantity / value together as notified by its extant circulars.Further in case of Internet Trading clients, IIL may at any time at its sole discretion block /restrict the clients online trading terminal to prevent the client from placing orders in suchpenny stocks through the Online Trading Platform of IIL. Further in case the client is able toplace an order for penny stocks which are restricted by IIL through Online Trading Platformor otherwise, IIL may not accept such order.

IIL shall not be held liable for restricting / prohibiting trade in penny stocks at any time.

Further IIL shall not be held liable or responsible in any manner whatsoever for anyrefusal/cancellation of orders for trading in penny stocks/other securities and the Clientshall indemnify IIL in respect of any loss caused to IIL by virtue of the Client trading inpenny stocks.

2. SETTING UP OF CLIENTS EXPOSURE LIMITS

As part of risk management, India Infoline Limited (IIL) shall set clients exposure limitsdepending on the type of securities provided as Margin / available funds in the clientsledger plus Fixed Deposits / Bank Guarantees provided by the client and the client profile/financial status. Exposure limits are also set based on categories of stocks / position(derivatives) client can trade. Securities that are acceptable as margin and theircategorization may be changed by IIL from time to time at its sole discretion. Further clientcategorization may also be changed based on various factors including trading pattern ofclients, profile / residential status / financial status of client.

IIL from time to time shall apply such haircuts as may be decided by IIL on the approvedsecurities against which the Exposure limits are given to the client. IIL may from time totime change the applicable hair cut or apply a haircut higher than that specified by theRegulators/Exchanges as part of its Risk Management System.


5/8

Subject to the clients exposure limits, client may trade in securities and / or take positionsin the futures and options segment. Client shall abide by the exposure limits, if any, set byIIL or by the Exchange or Clearing Corporation or SEBI from time to time. Limits/Exposureprovided shall vary based on the intraday/ delivery / carry forward positions made by theclient.

The exposure limits set by IIL does not by itself create any right for the Client and are liable

to be withdrawn at any time without notice and the client shall bear the loss on account ofwithdrawal of such limits.The client agrees to compensate IIL in the event of IIL sufferingany loss, harm or injury on account of exposure given and/or withdrawn.

In case of sale of Securities, such sale may at the discretion of IIL be provided only to theextent of the availability of securities in the account of the client (DP free Stock, DPlien/hold marked securities, beneficiary and collateral stock). Further the credit receivedagainst sale may be used for exposure as may be decided by IIL from time to time.

In case of derivatives, Clients shall be allowed to trade only upto the applicable clientwiseposition limits set by the Exchanges/Regulators from time to time. IIL may from time to timedemand additional margin from the client in the form of funds or securities if there is a

requirement for the same and the client shall be required to provide the same.

3. APPLICABLE BROKERAGE RATES

The Schedule of Brokerage and other charges leviable by IIL on the clients are provideunder the heading Schedule of Brokerage and Other Charges in this Form. Within thementioned scale, the brokerage and other charges as agreed by the client is indicated andduly signed by the client in that section. If there is any upward revision of brokerage, thesame will be informed to the client with 15 days prior notice. However all the brokerage andother charges are subject to the maximum limits as prescribed by SEBI / Exchanges/Government and other Regulatory authorities from time to time.

4. IMPOSITION OF PENALTY OR DELAYED PAYMENT CHARGES

The clients are required to settle the pay-in / provide margin within the time limits providedby Exchanges / SEBI/IIL risk management system. In case the client fails to provide thesame within the prescribed time, delayed payment charges shall be levied on the clientsaccount on any delayed payments towards trading either in the cash or derivativessegments or on account of any other reason beyond the due date of payment as may beprescribed by IIL. Such delayed payment charges shall be directly debited to the account ofthe Client at the end of every month. This is only a penal measure and brings in discipline inthe clients to clear the dues in time as IIL had to clear its obligations to the Exchange as perthe time limits set by the Exchanges. IIL reserves the right of imposition of delayed

payment charges on the client account and the client shall be liable for payment of suchcharges at such rate as may be prescribed by IIL from time to time.

5. RIGHT TO SELL CLIENTS SECURITIES OR CLOSE CLIENTS POSITIONS,WITHOUT GIVING NOTICE TO THE CLIENT ON ACCOUNT OF NON PAYMENT OFDUES. (LIMITED TO SETTLEMENT/MARGIN OBLIGATIONS)

As a part of its Risk Management System, IIL shall have the sole discretion to square off theopen position of the Client and / or sell clients securities (including securities maintained asmargin with IIL and securities lying in clients beneficiary / demat account) in case the client


6/8

fails to meet its settlement / margin obligations in time. The specific securities to be soldand the positions to be squared off shall be decided solely by IIL. Further, the square off ofclients open position or the selling of securities may be executed on such Exchanges andat such price as may be decided by IIL. IIL shall have no obligation of communicating thesame to the Client. IIL shall not be responsible for any losses incurred by the client due tosuch squaring off of the open position of the client. IIL reserves the right to square offclients open positions or sell clients securities under following circumstances:

a. where the limits given to the Client have been breached;b. where the Client has defaulted on their existing obligation and / or have failed to

make payments/deliver securities to IIL within the stipulated time period as may beprescribed by IIL.

c. In addition to above, in case of equity and currency derivatives transactions,a. where the margin or security placed by the Client with IIL falls short of the

applicable minimum margin as may be required to be maintained by the client;b. where Mark to Market Loss on the open position has reached the stipulated %

of the margins placed with IIL and the Client(s) have not taken any steps eitherto replenish the margin or reduce the Mark to Market Loss;

c. if the open position is neither squared off nor converted to Delivery by Client(s)within the stipulated time.

IIL reserves the right to square off the open position of client and / or sell clients securitiesunder the prescribed circumstances, however IIL is not obligated and does not guarantee tosquare off the open positions and / or sell clients securities. The client shall be solelyresponsible for the trading decisions taken by the client. It shall be the responsibility of theclient to make payments towards outstanding obligations and /or applicable margins to IILin time irrespective of whether IIL exercises its right to square off the positions of the clientin accordance with the provisions given herein above.

Client shall be solely responsible for any resultant losses incurred to client due to selling ofclients securities by IIL or squaring off the clients open positions or for not doing so. Alllosses in this regard shall be borne by the CLIENT and IIL shall be fully indemnified and held

harmless by the CLIENT in this behalf.

The CLIENT accepts to comply with IIL's requirement of payment of Margin/settlementobligations of the Client, immediately failing which IIL may sell, dispose, transfer or deal inany other manner the securities already placed with it as Margin/lying in the beneficiaryaccount of IIL or square-off all or some of the outstanding F&O positions of the CLIENT as itdeems fit at its sole discretion without further reference to the CLIENT and any resultant orassociated losses that may occur due to such square -off/sale shall be borne by the CLIENTand IIL shall be fully indemnified and held harmless by the CLIENT in this behalf at alltimes.

6. SHORTAGES IN OBLIGATIONS ARISING OUT OF INTERNAL NETTING OFTRADES

In case the client defaults on its existing obligation and in the event the trade has beeninternally netted off by IIL, there could be internal shortages. The internal shortages aremarked against the client randomly at the sole discretion of IIL taking into account thedelivery obligations through Exchanges. In case of failure of delivery the client marked forinternal netting of trade, the same shall be met through fresh market purchases and theloss on account of the said purchases will be charged to the defaulting clients account.However, defaulting client will not be eligible for any profit on account of this.


7/8

IIL shall not be responsible for losses to the Client on account of such shortages. All lossesto the client on this account shall be borne solely by the client and the Client shallindemnify IIL in this respect.

7. CONDITIONS UNDER WHICH CLIENT MAY NOT BE ALLOWED TO TAKEFURTHER POSITIONS OR BROKER MAY CLOSE EXISTING POSITIONS OF

CLIENT

In addition to the conditions as provided under the policy of right to sell securities and closeout clients open position as detailed in point 4 above, IIL shall have the right to refuse toexecute trades/allow the client to take further positions and / or close out the existingpositions of client under following circumstances:

a. As a result of any Regulatory directive / restriction;b. Non-receipt of funds / securities and / or bouncing of cheque received from the client

towards the obligations/ margin/ ledger balances;c. Due to technical reasons;d. securities breaching the limits specified by the Exchanges/regulators from time to

time

e. in case of failure to meet margin including mark to market margins by the client;f. In case securities to be transacted by client are not in dematerialized formg. Any other conditions as may be specified by IIL from time to time in view of market

conditions, regulatory requirements, internal policies etc and risk managementsystem;

h. Due to any force majeure event beyond the control of IILIIL shall not be responsible for any loss incurred and the client shall indemnify IIL in thisregard.

8. TEMPORARILY SUSPENDING OR CLOSING OF CLIENTS ACCOUNT AT THECLIENTS REQUEST

IIL may suspend or close the trading account of the client pursuant to SEBI or any otherRegulatory directive for such period as may be prescribed by the respective Regulator. IILmay further at its sole discretion and with/ without information to the CLIENT, prohibit orrestrict or block the CLIENT's access to the use of the web site or related services and theCLIENT's ability to trade due to market conditions and other internal policies includingpolicy with respect to prevention of money laundering.

Client can initiate temporary suspension / closure of its account at any time by giving arequest to IIL in writing 15 days in advance. However, such suspension / closure will beeffected subject to clearance of all dues and settlement obligations by the client.

Trades in the account of the client during the period of such temporary suspension shall notbe permitted.

Notwithstanding any such suspension / closure, all rights, liabilities and obligations of theparties arising out of or in respect of transactions entered into prior to such closure /suspension shall continue to subsist and binding on the client.

In case the account has been temporarily suspended at the request of the client, theaccount shall be reactivated only on submission of a written request for reactivation by theclient.


8/8

9. DEREGISTRATION OF A CLIENT

Deregistration of the client /Termination shall be at the sole discretion of IIL. IIL mayderegister the client if the client breaches the terms and conditions of the memberclientagreement or provides any false information or declarations. Further IIL may deregister the

client if the client is suspected to be involved in any activities in violation of applicableRules and Regulations. Further the client may be deregistered due to any Regulatorydirective, market conditions and other internal policies of IIL including policy with respect toprevention of money laundering. Such deregistration/termination shall not effect the rightsand liabilities of the parties in respect of the transactions executed before the date of suchderegistration/termination.

10. TREATMENT OF INACTIVE ACCOUNTS

In case the Trading and / or demat account of the client is not operated by the client for acontinuous period of six months the same will be considered to be Inactive Account. SuchInactive account will be blocked for further transactions by the client. The client will have tosubmit following documents / confirmation, for re-activation of such blocked account:

1. Call the Customer Care centre identifying himself (through validation questions) andrequesting for activation of account for placing orders / transacting in the account;OR

2. Client can give the duly signed request in writing at any of the Branch offices of IndiaInfoline Ltd.; OR

3. By placing request for re-activation of account through the Internet Trading portal.

During the blocked period if there is any debit / dues to India Infoline Ltd in clients account,IIFL shall have the authority to liquidate the clients position to the required extent duringthe block period.

During the block period if any corporate actions or pay-outs are due for return to the client,the same will be affected / returned by IIFL to the clients account.

The above policies and procedures are subject to change / updation by IIFL from time totime. The updated policies and procedures of IIFL shall be posted on the website of IIFLwww.indiainfoline.com . Clients are required to refer to the updated policies and proceduresand abide by the same.
http://www.indiainfoline.com/http://www.indiainfoline.com/

Letters to Existing Clients_Dec Circular

Documents

Transcript of Letters to Existing Clients_Dec Circular