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Sr. No. Name of the Document Brief significance of the Document Pg. No.

MANDATORY DOCUMENTS AS PRESCRIBED BY SEBI & EXCHANGES

Part - A, Mandatory Documents

1 Index of Information 1 - 3

2 Instructions / Check List for filling KYC Form 4 - 6

3 Contact details of Stock Broker & Regulators 7

INDEX OF DOCUMENTS

4 Account Opening Form

5 Rignts and obligations

6 Risk Disclosure

Document (RDD)

7 Guidance note

8 Policies and Procedures

9 Trariff sheet

A. KYC form - Document captures the basic

information about the constituent and

instruction/check list.

B. Document captures the additional

information about the constituent relevant to

trading account and an instruction / check list.

Document stating the Rights & obligations of

stock broker / trading member, sub-broker

and client for the trading on exchanges

(including additional rights & obligations in

case of internet/wireless technology based

trading)

Document detailing risks associated with

dealing in the securities market

Document detailing do’s and don’ts for

trading on exchange, for the education of the

investors.

Document describing significant policies and

procedures of the stock broker

Document detailing the rate/amount of

brokerage and other charges levied on the

client for trading on the stock exchange(s)

8 - 12

13 - 18

19 - 24

25 - 28

29 - 30

31 - 35

36

VOLUNTARY DOCUMENTS AS PROVIDED BY THE STOCK BROKER

Part - B, Nor - Mandatory Documents (Voluntary)

10 Notice on Important Issues

11 Client’s Declaration

12 Mandate for Providing

Information through email.

Specific advice on certain important matters

Client’s declaration of his knowledge of

various matters

Authorization to issue digitally signed

electronic contract notes in lieu of physical

contract notes.

37 - 38

39 - 40

41

1 Part A - Mandatory

ANNEXURE I

Authorization to maintain your account on a

Running Account Basis

Disclosure of employment / business

association particulars

Authorization to maintain your account,

relevant to different exchanges & segments

on a consolidated basis.

Declaration regarding ownership of Mobile

Number & providing you information on your

mobile, confirming that voice call or SMS to

you shall not be considered voilation of your

rights

Authorization permitting us to make inter -

Exchange and inter-segmental adjustments

in your account.

Authorization to Pledge your Securities with

the Exchanges and Banks etc.

Authorization for acceptance of verbal and /

or telephonic orders.

Authorization by Co-parceners in favour of

Karta to deal on their behalf

Authorization by all partners for use of

specified DP account

Consent of all the partners authorizing one /

two partners to operate Trading Account

Through this declaration a Corporate gives

its authority to trade through BAKSHU

SECURITIES & BROKERS PVT. LTD.

Provides awareness about Money

Laundering Act

Detailed Policy for Prevention of Insider

Trading

13 Running Account

Authorization

14 Declaration of Employment /

Association with Market

Participants

15 Authorization for Adjustment

between Different Segments &

Exchanges

16 Mandate for Communication

of Information on Mobile

17 Authorization to Set-off / Lien

and sharing of information

18 Authorization for Pledge of

Securities

19 Alternate mode of placing

Orders

20 Declaration of Joint Family by

HUF

21 Format for Declaration by

Partners of Partnership Firm

( Annexure I )

22 Format of Authority Letter in

favour of Managing Partners

( Annexure II )

23 Format of Board Resolution to

be given by a Corporate

( Annexure III )

24 SEBI Master Circular under

PMLA. 2002

25 Policy for Prevention of

Insider Trading

Sr. No. Name of the Document Brief significance of the Document Pg. No.

42 - 43

44

45

46

47 - 48

49

49

50 - 51

52

53

54

55 - 59

60 - 61

2 Part A - Mandatory

Welcome letter along with allotment of client

code

26 Welcome Letter

27 Receipt for KYC

28 Acknowledgment

Sr. No. Name of the Document Brief significance of the Document Pg. No.

62

63

64

3 Part A - Mandatory

Registered Office :

Correspondence Add. :

Telephone No. :

Email ID. : /

Telephone No. :

Email ID. : /

For any grievance/dispute please contact at the above

address or

631, P. J. Towers, Dalal Street, Mumbai - 400 001.

Tel. : 2272 3535 / 3028 2272 l Fax : 2272 2189

Website : www.kmjpl.com

814, P. J. Towers, Dalal Street, Mumbai - 400 001.

Tel. : 6633 4979 / 3028 2273 l Fax : 2272 2189

Website : www.kmjpl.com

Compliance Officer

Name : Mr. Anand Jain

022 - 66334978

kmjpl@mtnl.net.in kmjpl@rediffmail.com

CEO/Director

Name : Mr. Anand Jain

022 - 66334978

kmjpl@mtnl.net.in kmjpl@rediffmail.com

K. M. JAIN STOCK BROKERS PVT. LTD.

E-mail ID for investor grievances : grievances@kmjpl.com

K. M. JAIN STOCK BROKERS PVT. LTD.

BSE Member Code No. 352

SEBI Reg # :l  BSE INB010990232

l  BSE F&O INB010990232

NSE Member Code No. 09902

l  NSE INB230990237

l  NSE F&O INF230990237

CLEARING MEMBER : Bonanza Portfolio Limited

Bonanza House, Plot # 2, Cama Indl Estate, Walbhat Road,Goregaon(E), Mumbai. 400063.

Tel # 67605 500/600

SEBI Reg # : BSE F&O INF 011110237 NSE F&O INF230637836

BSE - INVESTOR GRIEVANCES NSE

Tel. No. : 022 2272 8097 Tel. No. : 022 2659 8190

E-mail Id : is@bseindia.com E-mail Id : ignse@nse.co.in

- INVESTOR GRIEVANCES

Please fill this form in ENGLISH and in BLOCK LETTERS.

A. IDENTITY DETAILS

1. Name of the Applicant :

2. Father’s/ Spouse Name :

3. a. Gender: Male Female b. Marital status : Single Married

c. Date of birth:

4. a. Nationality: b. Status: Resident Individual Non Resident Foreign National

5. a. PAN:

b. Unique Identification Number (UID) / Aadhaar, if any:

6. Specify the Proof of Identity submitted: _____________________________________________

B. ADDRESS DETAILS

1. Address for Correspondence:

City/town/village:

Landmark Pin Code:

State Country

2. Contact Details: Tel. (Off.) : Tel.(Res.):

Mobile No. Fax

E-mail :

3. Specify the Proof of Address submitted for Correspondence Address: ___________________

__________________________________________________________________________________

4. Permanent Address (if different from above or overseas address, mandatory for Non-Resident Applicant):

City/town/village

Landmark Pin Code:

State Country

Contact Details: Tel.(Off.): Tel. (Res.) :

5. Specify the Proof of Address submitted for Permanent Address: ________________________

C. OTHER DETAILS

1. Gross Annual Income Details (please specify):

Income Range per annum: < 1 Lac 1 - 5 Lacs 5 - 10 Lacs 10 - 25 Lacs > 25 Lacs

or

Net-worth as on Rs. _______________________________________

(Net worth should not be older than 1 year)

4 Part A - Mandatory

KNOW YOUR CLIENT (KYC) APPLICATION FORM

For Individuals Individual /

First Applicant /

Side Holder

Trading Account

3.5 cm x 3.5 cm Size

Colour photograph only

and sign across it

K. M. JAIN STOCK BROKERS PVT. LTD.

ANNEXURE II

2. Occupation

(please tick any one and give brief details):

Private Sector Public Sector Government Business Business

Professional Agriculturist Retired Housewife

Student Other (Specify):

Brief Details : _______________________________________________________________________

3. Please tick, if applicable :

Politically Exposed Person (PEP) Related to a Politically Exposed Person (PEP)

4. Any other information: ___________________________________________________________

DECLARATION

I hereby declare that the details furnished above are true and correct to the best of my knowledge and belief

and I undertake to inform you of any changes therein, immediately. In case any of the above information is

found to be false or untrue or misleading or misrepresenting, I am aware that I may be held liable for it.

Signature of the Applicant Date :

FOR OFFICE USE ONLY

(Original verified) True copies of document received

(Self-Attested) Self Certified Document copies received

For

Date :

K. M. JAIN STOCK BROKERS PVT. LTD.

Authorised Signatory

Seal/Stamp of the Trading Member

5 Part A - Mandatory

KNOW YOUR CLIENT (KYC) APPLICATION FORM

For Non Individuals Promoter / Director /

Partner / Trustee / Karta

Authorised Person

3.5 cm x 3.5 cm Size

Colour photograph only

and sign across it

Please fill this form in ENGLISH and in BLOCK LETTERS.

A. IDENTITY DETAILS

1. Name of the Applicant :

2. Date of Incorporation : & Place of Incorporation

3. Date of commencement of business :

4. a. PAN:

b. Registration No. (e.g. CIN)

5. Status (please tick any one):

Private Limited Co. Public Ltd. Body Corporate Partnership Charties

NGO’s FI FII HUF AOP

Bank Government Body Non-Government Organization Society

BOI LLP Defense Establishment Trust

Mutual Fund OCB CM Clearing House

Other (Please specify) _____________________________________________________________

B. ADDRESS DETAILS

1. Address for Correspondence:

City/town/village: Pin Code:

State Country

2. Contact Details: Tel. (Off.) : Tel.(Res.):

Mobile No. Fax

E-mail :

3. Specify the Proof of Address submitted for Correspondence Address: ___________________

__________________________________________________________________________________

4. Registered Address (if different from above):

City/town/village: Pin Code:

State Country

Contact Details: Tel.(Off.): Tel. (Res.) :

5. Specify the Proof of Address submitted for Registered Address: ________________________

C. OTHER DETAILS

1. Gross Annual Income Details (please specify):

Income Range per annum: < 1 Lac 1 - 5 Lacs 5 - 10 Lacs 10 - 25 Lacs

25 Lacs - 1 crore > 1 crore

Net-worth as on Rs. ___________________________________

(Net worth should not be older than 1 year)

2.

6 Part A - Mandatory

K. M. JAIN STOCK BROKERS PVT. LTD.

5. Please tick, if applicable, for any of your Authorized signatories / Promoters / Partners / Karta/

Trustees / whole time directors:

Politically Exposed Person (PEP) Related to a Politically Exposed Person (PEP)

6. Any other information: ___________________________________________________________

DECLARATION

I / We hereby declare that the details furnished above are true and correct to the best of my / our

knowledge and belief and I undertake to inform you of any changes therein, immediately. In case any of the

above information is found to be false or untrue or misleading or misrepresenting, I am / We are that I may

be held liable for it.

Signature of the Applicant Date :

Seal :

FOR OFFICE USE ONLY

(Original verified) True copies of document received

(Self-Attested) Self Certified Document copies received

For

Date :

K. M. JAIN STOCK BROKERS PVT. LTD.

Authorised Signatory

Seal/Stamp of the Trading Member

3. & 4. Name, PAN, residential address and photographs of Promoters/Partners/Karta/Trustees

and whole time directors.

2. Name PAN :

Address (Resi) : DIN/UID:

Designation:

Contact No.:

Mob. No.:

E-mail -

3. Name PAN :

Address (Resi) : DIN/UID:

Designation:

Contact No.:

Mob. No.:

E-mail -

Sr. Name & Address of Promoters/Partners/ PAN, DIN/UID, Designation Photograph

No. Karta/Trustees/whole time Directors & Contact No.

1. Name PAN :

Address (Resi) : DIN/UID:

Designation:

Contact No.:

Mob. No.:

E-mail -

7 Part A - Mandatory

INSTRUCTIONS/CHECK LIST FOR FILLING KYC FORM

8 Part A - Mandatory

A. IMPORTANT POINTS:

1. Self attested copy of PAN card is mandatory for all clients, including Promoters / Partners / Karta /

Trustees and whole time directors and persons authorized to deal in securities on behalf of

company/firm/others.

2. Copies of all the documents submitted by the applicant should be self-attested and accompanied

by originals for verification. In case the original of any document is not produced for verification,

then the copies should be properly attested by entities authorized for attesting the documents, as

per the below mentioned list.

3. If any proof of identity or address is in a foreign language, then translation into English is required.,

4. Name & address of the applicant mentioned on the KYC form, should match with the

documentary proof submitted.

5. If correspondence & permanent address are different, then proofs for both have to be submitted.

6. Sole proprietor must make the application in his individual name & capacity.

7. For non-residents and foreign nationals, (allowed to trade subject to RBI and FEMA guidelines),

copy of passport/PIO Card/OCI Card and overseas address proof is mandatory.

8. For foreign entities, CIN is optional; and in the absence of DIN no. for the directors, their passport

copy should be given.

9. In case of Merchant Navy NRI's, Mariner's declaration or certified copy of CDC (Continuous

Discharge Certificate) is to be submitted.

10.

11. Politically Exposed Persons (PEP) are defined as individuals who are or have been entrusted with

prominent public functions in a foreign country, e.g., Heads of States or of Governments, senior

politicians, senior Government/judicial/ military officers, senior executives of state owned

corporations, important political party officials, etc.

B. PROOF OF IDENTITY (POI)

(List of documents admissible as Proof of Identity)

1. Unique Identification Number (UID) (Aadhaar)/ Passport/Voter ID card/ Driving license.

2. PAN card with photograph.

3. Identity card/ document with applicant's Photo, issued by any of the following: Central/State

Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings,

Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities,

Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members; and Credit

cards/Debit cards issued by Banks.

C. PROOF OF ADDRESS (POA)

(List of documents admissible as Proof of Address)

(*Documents having an expiry date should be valid on the date of submission.)

1. Passport/ Voters Identity Card/ Ration Card/ Registered Lease or Sale Agreement of Residence/

Driving License/ Flat Maintenance bill/ Insurance Copy.

2. Utility bills like Telephone Bill (only land line), Electricity bill or Gas bill - Not more than 3 months

old.

3. Bank Account Statement/Passbook-Not more than 3 months old.

4. Self-declaration by High Court and Supreme Court judges, giving the new address in respect of

their own accounts.

5. Proof of address issued by any of the following: Bank Managers of Scheduled Commercial

Banks/Scheduled Co-Operative Bank/Multinational Foreign Banks/Gazetted Officer/Notary

public/Elected representatives to the Legislative Assembly/Parliament/Documents issued by any

Govt. or Statutory Authority.

6. Identity card/document with address, issued by any of the following: Central/State Government

and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled

Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities and

Professional Bodies such as ICAI,ICWAI,ICSI, Bar Council etc., to their Members.

7. For Fll/sub account, Power of Attorney given by Fll/sub-account to the Custodians (which are duly

notarized and/or apostiled or consularised) that gives the registered address should betaken.

8. The proof of address in the name of the spouse may be accepted.

D. EXEMPTIONS/CLARIFICATIONS TO PAN

(*Sufficient documentary evidence in support of such claims to be collected.)

1. In case of transactions undertaken on behalf of Central Government and/or State Government

and by officials appointed by Courts e.g. Official liquidator, Court receiver etc.

2 Investors residing in the state of Sikkim.

3 UN entities/multilateral agencies exempt from paying taxes/filing tax returns in India.

4 SIP of Mutual Funds up to Rs 50,000/- p.a.

5. In case of institutional clients, namely, Flls, MFs, VCFs, FVCIs, Scheduled Commercial Banks,

Multilateral and Bilateral Development Financial Institutions, State Industrial Development

Corporations, Insurance Companies registered with IRDA and Public Financial Institution as

defined under section 4A of the Companies Act, 1956, Custodians shall verify the PAN card

details with the original PAN card and provide duly certified copies of such verified PAN details to

the intermediary.

E. LIST OF PEOPLE AUTHORIZED TO ATTEST THE DOCUMENTS:

1. Notary Public, Gazetted Officer, Manager of a Scheduled Commercial/ Co-operative Bank or

Multinational Foreign Banks (Name, Designation & Seal should be affixed on the copy).

2. In case of NRIs, authorized officials of overseas branches of Scheduled Commercial Banks

registered in India, Notary Public, Court Magistrate, Judge, Indian Embassy /Consulate General

in the country where the client resides are permitted to attest the documents.

9 Part A - Mandatory

Types of entity Documentary requirements*

Corporate lCopy of the balance sheets for the last 2 financial years (to be submitted

every year).

lCopy of latest share holding pattern including list of all those holding control,

either directly or indirectly, in the company in terms of SEBI takeover

Regulations, duly certified by the company secretary/Whole time

director/MD (to be submitted every year).

lPhotograph, POI, PDA, PAN and DIN numbers of whole time directors/two

directors in charge of day to day operations.

lPhotograph, POI, POA, PAN of individual promoters holding control - either

directly or indirectly.

lCopies of the Memorandum and Articles of Association and certificate of

incorporation.

lCopy of the Board Resolution for investment in securities market.

lAuthorised signatories list with specimen signatures.

Partnership firm lCopy of the balance sheets for the last 2 financial years (to be submitted

every year).

lCertificate of registration (for registered partnership firms only).

lCopy of partnership deed.

lAuthorised signatories list with specimen signatures.

lPhotograph, POI, POA, PAN of Partners.

Trust lCopy of the balance sheets for the last 2 financial years (to be submitted

every year).

lCertificate of registration (for registered trust only).

lCopy of Trust deed.

lList of trustees certified by managing trustees/CA.

lPhotograph, POI, POA, PAN of Trustees.

HUF lPAN of HUF.

lDeed of declaration of HUF/ List of coparceners.

lBank pass-book/bank statement in the name of HUF.

lPhotograph, POI, POA, PAN of Karta.

Unincorporated lProof of Existence/Constitution document.

association or a lResolution of the managing body & Power of Attorney granted to transact

body of individuals business on its behalf.

lAuthorized signatories list with specimen signatures.

Banks/Institutional lCopy of the constitution/registration or annual report/balance sheet for the

Investors last 2 financial years.

lAuthorized signatories list with specimen signatures.

Foreign lCopy of SEBI registration certificate.

Institutionals lAuthorized signatories list with specimen signatures.

Investors (FII)

Army/Government lSelf-certification on letterhead.

Bodies lAuthorized signatories list with specimen signatures.

Registered Society lCopy of Registration Certificate under Societies Registration Act.

lList of Managing Committee members.

lCommittee resolution for persons authorised to act as authorised signatories

with specimen signatures.

lTrue copy of Society Rules and Bye Laws certified by the

Chairman/Secretary.

10 Part A - Mandatory

F. IN CASE OF NON-INDIVIDUALS, ADDITIONAL DOCUMENTS TO BE OBTAINED FROM

NON-INDIVIDUALS, OVER & ABOVE THE POI & POA, AS MENTIONED BELOW

* POI - Proof of Identity

* POA - Proof of Address

* PAN - Permanent Account Number

* DIN - Director Identification Number

* UID - Unique Identification (Aadhaar)

TRADING ACCOUNT RELATED DETAILS

(For Individuals & Non Individuals)

A. BANK ACCOUNT(S) DETAILS

I) Bank Name

Branch Address

Bank Account No.

Account Type Savings Current OTHERS NRI NRE NRO

MICR No. RTGS/NEFT/IFSC Code

(9 digit code)

II) Bank Name

Branch Address

Bank Account No.

Account Type Savings Current OTHERS NRI NRE NRO

MICR No. RTGS/NEFT/IFSC Code

(9 digit code)

B. DEPOSITORY ACCOUNT(S) DETAILS

Depository Participant Name:

Depository Name: NSDL CDSL

Beneficiary Name:

DP ID Client ID

C. TRADING PREFERENCES

*Please sign in the relevant boxes where you wish to trade. The segment not chosen should be struck

off by the client.

Exchanges Segments

Cash CURRENCY DERIVATIVE

BSE

F & O

Cash

NSE

F & O

# If, in future, the client wants to trade on any new segment/new exchange, separate authorization/letter

should be taken from the client by the stock broker.

11

ANNEXURE III

12 Part A - Mandatory

TRADING ACCOUNT RELATED DETAILS

D. PAST ACTIONS

E. DEALINGS THROUGH SUB-BROKERS AND OTHER STOCK BORKERS

1. If client is dealing through the sub-broker, provide the following details:

Sub-broker’s Name:

SEBI Registration number:

a) NSE

b) BSE

Registered office address:

(Sub-Broker)

Tel. No. & Fax No.:

E-mail ID :

Website :

2. Whether dealing with any other Stock Broker/Sub-Broker (incase dealing with multiple Stock

Brokers/Sub-brokers, please provide details of all)

Name of Stock Broker

Name of Sub Broker, if any

Name of Exchange Client Code No.

Details of disputes/dues pending from/to such Stock Brokers/Sub-Broker.

__________________________________________________________________________________

__________________________________________________________________________________

F. ADDITIONAL DETAILS

l Whether you wish to receive physical Contract Note or Electronic Contract Note (ECN) (please specify):

Yes Specify your Email ID if applicable. No.

Please repeat your Email ID in CAPS below, to enable us to compare & capture correctly.

__________________________________________________________________________________

lWhether you wish to avail of the facility of Internet Technology (please specify):

Yes No

Number of years of Investment/Trading Experience: _______________________________________

Details of any action/proceedings initiated/pending/ taken by SEBI/ Stock exchange/any other authority

against the applicant/constituent or its Partners/Promoters/Whole Time Directors/Authorized Persons in

charge of dealing in securities during the last 3 years:

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

l

photographs of persons authorized to deal in securities on behalf of company/firm/others.

In case of non-individuals, name, designation, PAN, UID, signature, residential address and

Sr. Name / Resi. Address Designation, Photograph

No. PAN & UID

Contact No.

13 Part A - Mandatory

1. Name Designation

Address : PAN:

UID:

Contact No.:

Mob. No.:

Signature :

2. Name Designation

Address : PAN:

UID:

Contact No.:

Mob. No.:

Signature :

3. Name Designation

Address : PAN:

UID:

Contact No.:

Mob. No.:

Signature :

For more person please use additional sheet as per this format.

lAny other information: ______________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

G. INTRODUCER DETAILS (optional)

Name of the Introducer

Address of Introducer

Landmark City

Pin State Country

Tel. Mobile Fax

Status of the Introducer: Sub-broker/Remisier/ Authorized Person/Existing Client/Other

Please specify: _____________________________________________________________________

Signature of the Introducer

H. NOMINATION DETAILS (for individuals only)

I/We wish to nominate I/We do not wish to nominate

Name of Nominee:

Relationship with the Nominee :

PAN of Nominee Date of Birth of Nominee

Address

Ciy: PIN Code:

State: Country Occupation:

Tel. Mobile Fax

If Nominee is a minor, details of Guardian:

Name of Guardian

Address of Guardian

City: PIN Code:

State: Country: Occupation:

Tel. Mobile Fax

Signature of guardian

WITNESSES (Only applicable in case the account holder has made nomination)

First Witness Second Witness

Signature of Witness Signature fo Witness

Name of Witness __________________________ Name of Witness _________________________

Address of Witness ________________________ Address of Witness _______________________

________________________________________ ________________________________________

________________________________________ ________________________________________

________________________________________ ________________________________________

14 Part A - Mandatory

15 Part A - Mandatory

DECLARATION

1. I/We hereby declare that the details furnished above are true and correct to the best of my/our

knowledge and belief and I/we undertake to inform you of any changes therein, immediately. In case

any of the above information is found to be false or untrue or misleading or misrepresenting, I am/we are

aware that I/we may be held liable for it.

2. I/We confirm having read/been explained and understood the contents of the document on policy and

procedures of the stock broker and the tariff sheet.

3. I/We further confirm having read and understood the contents of the 'Rights and Obligations'

document(s) and 'Risk Disclosure Document'. I/We do hereby agree to be bound by such provisions as

outlined in these documents. I/We have also been informed that the standard set of documents has

been displayed for Information on stock broker's designated website, if any.

Place : ___________________________ Signature of Authorised

Signatories/Karta/Trustee

Date :

FOR OFFICE USE ONLY

UCC Code allotted to the Client:

Documents verified with Client Interviewed By In-Person Verification

Originals done by

Name of the Employee

Employee Code

Designation of the employee

Date

Signature

I/We undertake that we have made the client aware of 'Policy and Procedures', tariff sheet and all the nonmandatory

documents. I/We have also made the client aware of 'Rights and Obligations' document (s),

RDD and Guidance Note. We have given/sent him a copy of all the KYC documents. I/We undertake that

any change in the 'Policy and Procedures', tariff sheet and all the non-mandatory documents would be duly

intimated to the clients. I/We also undertake that any change in the 'Rights and Obligations' and RDD would

be made available on our website, if any, for the information of the clients.

For

Date :

K. M. JAIN STOCK BROKERS PVT. LTD.

Authorised Signatory

Seal/Stamp of the Trading Member

16 Part A - Mandatory

1. Additional documents in case of trading in derivatives segments

Copy of ITR Acknowledgment Copy of Annual Accounts

In case of salary income - Salary Slip, Net worth certificate

Copy of Form 16

Copy of demat account holding statement. Bank account statement for last 6 months

Any othe relevant documents substantiating Self declaration with relevant supporting

ownership of assets. documents.

2. Copy of cancelled cheque leaf/ pass book/bank statement specifying name of the constituent, MICR

Code or/and IFSC Code of the bank should be submitted.

3. Demat master or recent holding statement issued by DP bearing name of the client.

4. For individuals:

a. Stock broker has an option of doing ‘in-person’ verification through web camera at the branch

office of the stock broker/sub-broker's office.

b. In case of non-resident clients, employees at the stock broker's local office, overseas can do inperson'

verification. Further, considering the infeasibility of carrying out 'In-person' verification

of the non-resident clients by the stock broker's staff, attestation of KYC documents by Notary

Public, Court, Magistrate, Judge, Local Banker, Indian Embassy / Consulate General in the

country where the client resides may be permitted.

5. For non-individuals:

a. Form need to be initialized by all the authorized signatories.

b. Copy of Board Resolution or declaration (on the letterhead) naming the persons authorized to

deal in securities on behalf of company/firm/others and their specimen signatures.

INSTRUCTIONS / CHECK LIST

1. The client shall invest/trade in those securities/contracts/other instruments admitted to dealings on

the Exchanges as defined in the Rules, Byelaws and Regulations of Exchanges/ Securities and

Exchange Board of India (SEBI) and circulars/notices issued there underfrom time to time.

2. The stock broker, sub-broker and the client shall be bound by all the Rules, Byelaws and Regulations

of the Exchange and circulars/notices issued there under and Rules and Regulations of SEBI and

relevant notifications of Government authorities as may be in force from time to time.

3. The client shall satisfy itself of the capacity of the stock broker to deal in securities and/or deal in

derivatives contracts and wishes to execute its orders through the stock broker and the client shall

from time to time continue to satisfy itself of such capability of the stock broker before executing

orders through the stock broker.

4. The stock broker shall continuously satisfy itself about the genuineness and financial soundness of

the client and investment objectives relevant to the services to be provided.

5. The stock broker shall take steps to make the client aware of the precise nature of the Stock broker's

liability for business to be conducted, including any limitations, the liability and the capacity in which

the stock broker acts.

6. The sub-broker shall provide necessary assistance and co-operate with the stock broker in all its

dealings with the client(s).

CLIENT INFORMATION

7. The client shall furnish all such details in full as are required by the stock broker in "Account Opening

Form" with supporting details, made mandatory by stock exchanges/SEBI from time to time.

8. The client shall familiarize himself with all the mandatory provisions in the Account Opening

documents. Any additional clauses or documents specified by the stock broker shall be nonmandatory,

as per terms & conditions accepted by the client.

9. The client shall immediately notify the stock broker in writing if there is any change in the information

in the 'account opening form' as provided at the time of account opening and thereafter; including the

information on winding up petition/insolvency petition or any litigation which may have material

bearing on his capacity. The client shall provide/update the financial information to the stock broker

on a periodic basis.

10. The stock broker and sub-broker shall maintain all the details of the client as mentioned in the

account opening form or any other information pertaining to the client, confidentially and that they

shall not disclose the same to any person/authority except as required under any law/regulatory

requirements. Provided however that the stock broker may so disclose information about his client to

any person or authority with the express permission of the client.

MARGINS

11. The client shall pay applicable initial margins, withholding margins, special margins or such other

margins as are considered necessary by the stock broker or the Exchange or as may be directed by

SEBI from time to time as applicable to the segment(s) in which the client trades. The stock broker is

permitted in its sole and absolute discretion to collect additional margins (even though not required by

the Exchange, Clearing House/Clearing Corporation or SEBI) and the client shall be obliged to pay

such margins within the stipulated time.

12. The client understands that payment of margins by the client does not necessarily imply complete

satisfaction of all dues. In spite of consistently having paid margins, the client may, on the settlement of

RIGHTS AND OBLIGATIONS OF STOCK BROKERS, SUB-BROKERS AND CLIENTS

as prescribed by SEBI and Stock Exchanges

17 Part A - Mandatory

ANNEXURE IV

18 Part A - Mandatory

its trade, be obliged to pay (or entitled to receive) such further sums as the contract may

dictate/require.

TRANSACTIONS AND SETTLEMENTS

13. The client shall give any order for buy or sell of a security/derivatives contract in writing or in such form

or manner, as may be mutually agreed between the client and the stock broker. The stock broker shall

ensure to place orders and execute the trades of the client, only in the Unique Client Code assigned

to that client. .

14. The stock broker shall inform the client and keep him apprised about trading/settlement cycles,

delivery/payment schedules, any changes therein from time to time, and it shall be the responsibility

in turn of the client to comply with such schedules/procedures of the relevant stock exchange where

the trade is executed.

15. The stock broker shall ensure that the money/securities deposited by the client shall be kept in a

separate account, distinct from his/its own account or account of any other client and shall not be

used by the stock broker for himself/itself or for any other client or for any purpose other than the

purposes mentioned in Rules, Regulations, circulars, notices, guidelines of SEBI and/or Rules,

Regulations, Bye-laws, circulars and notices of Exchange.

16. Where the Exchange(s) cancels trade(s) suo moto all such trades including the trade/s done on

behalf of the client shall ipso facto stand cancelled, stock broker shall be entitled to cancel the

respective contract(s) with client(s).

17. The transactions executed on the Exchange are subject to Rules, Byelaws and Regulations and

circulars/notices issued thereunder of the Exchanges where the trade is executed and all parties to

such trade shall have submitted to the jurisdiction of such court as may be specified by the Byelaws

and Regulations of the Exchanges where the trade is executed for the purpose of giving effect to the

provisions of the Rules, Byelaws and Regulations of the Exchanges and the circulars/notices issued

thereunder.

BROKERAGE

18. The Client shall pay to the stock broker brokerage and statutory levies as are prevailing from time to

time and as they apply to the Client's account, transactions and to the services that stock broker

renders to the Client. The stock broker shall hot charge brokerage more than the maximum

brokerage permissible as per the rules, regulations and bye-laws of the relevant stock exchanges

and/or rules and regulations of SEBI.

LIQUIDATION AND CLOSE OUT OF POSITION

19. Without prejudice to the stock broker's other rights (including the right to refer a matter to arbitration),

the client understands that the stock broker shall be entitled to liquidate/close out all or any of the

client's positions for non-payment of margins or other amounts, outstanding debts, etc. and adjust

the proceeds of such liquidation/close out, if any, against the client's liabilities/obligations. Any and all

losses and financial charges on account of such liquidation/closing-out shall be charged to and borne

by the client.

20. In the event of death or insolvency of the client or his/its otherwise becoming incapable of receiving

and paying for or delivering or transferring securities which the client has ordered to be bought or

sold, stock broker may close out the transaction of the client and claim losses, if any, against the

estate of the client. The client or his nominees, successors, heirs and assignee shall be entitled to any

surplus which may result there from. The client shall note that transfer of funds/securities in favor of a

Nominee shall be valid discharge by the stock broker against the legal heir.

19 Part A - Mandatory

21. The stock broker shall bring to the notice of the relevant Exchange the information about default in

payment/delivery and related aspects by a client. In case where defaulting client is a corporate

entity/partnership/proprietary firm or any other artificial legal entity, then the name(s) of

Directors)/Promoter(s)/Partner(s)/Proprietor as the case may be, shall also be communicated by the

stock broker to the relevant Exchange(s).

DISPUTE RESOLUTION

22. The stock broker shall provide the client with the relevant contact details of the concerned

Exchanges andSEBI.

23. The stock broker shall co-operate in redressing grievances of the client in respect of all

transactions routed through it and in removing objections for bad delivery of shares,

rectification of bad delivery, etc.

24. The client and the stock broker shall refer any claims and/or disputes with respect to

deposits, margin money, etc., to arbitration as per the Rules, Byelawsand Regulations of

the Exchanges where the trade is executed and circulars/notices issued thereunder as

may be in force from time to time.

25. The stock broker shall ensure faster settlement of any arbitration proceedings arising out of

the transactions entered into between him vis-a-vis the client and he shall be liable to

implement the arbitration awards made in such proceedings.

26. The client/stock-broker understands that the instructions issued by an authorized

representative for dispute resolution, if any, of the client/stock-broker shall be binding on

the client/stock-broker in accordance with the letter authorizing the said representative to

deal on behalf of the said client/stockbroker.

TERMINATION OF RELATIONSHIP

27. This relationship between the stock broker and the client shall be terminated; if the stock

broker for any reason ceases to be a member of the stock exchange including cessation of

membership by reason of the stock broker's default, death, resignation or expulsion or if the

certificate is cancelled by the Board.

28. The stock broker, sub-broker and the client shall be entitled to terminate the relationship

between them without giving any reasons to the other party, after giving notice in writing of

not less than one month to the other parties. Notwithstanding any such termination, all rights,

liabilities and obligations of the parties arising out of or in respect of transactions

entered into prior to the termination of this relationship shall continue to subsist and vest

in/be binding on the respective parties or his/its respective heirs, executors, administrators,

legal representatives or successors, as the case may be.

29. In the event of demise/insolvency of the sub-broker or the cancellation of his/its registration

with the Board or/withdrawal of recognition of the sub-broker by the stock exchange and/or

termination of the agreement with the sub broker by the stock broker, for any reason

whatsoever, the client shall be informed of such termination and the client shall be deemed

to be the direct client of the stock broker and all clauses in the 'Rights and Obligations'

document(s) governing the stock broker, sub-broker and client shall continue to be in force

as it is, unless the client intimates to the stock broker his/its intention to terminate their

relationship by giving a notice in writing of not less than one month.

20 Part A - Mandatory

ADDITIONAL RIGHTS AND OBLIGATIONS

30. The stock broker shall ensure due protection to the client regarding client's rights to

dividends, rights or bonus shares, etc. in respect of transactions routed through it and it

shall not do anything which is likely to harm the interest of the client with whom and for whom

they may have had transactions in securities.

31. The stock broker and client shall reconcile and settle their accounts from time to time as per

the Rules, Regulations, Bye Laws, Circulars, Notices and Guidelines issued by SEBI and

the relevant Exchanges where the trade is executed.

32. The stock broker shall issue a contract note to his constituents for trades executed in such

format as may be prescribed by the Exchange from time to time containing records of all

transactions including details of order number, trade number, trade time, trade price, trade

quantity, details of the derivatives contract, client code, brokerage, all charges levied etc.

and with all other relevant details as required therein to be filled in and issued in such

manner and within such time as prescribed by the Exchange. The stock broker shall send

contract notes to the investors within one working day of the execution of the trades in hard

copy and/or in electronic form using digital signature.

33. The stock broker shall make pay out of funds or delivery of securities, as the case may be, to the

Client within one working day of receipt of the payout from the relevant Exchange where the trade is

executed unless otherwise specified by the client and subject to such terms and conditions as may be

prescribed by the relevant Exchange from time to time where the trade is executed.

34. The stock broker shall send a complete 'Statement of Accounts' for both funds and securities in

respect of each of its clients in such periodicity and format within such time, as may be prescribed by

the relevant Exchange, from time to time, where the trade is executed. The Statement shall also state

that the client shall report errors, if any, in the Statement within such time as may be prescribed by the

relevant Exchange from time to time where the trade was executed, from the receipt thereof to the

Stock broker.

35. The stock broker shall send daily margin statements to the clients. Daily Margin statement should

include, inter-alia, details of collateral deposited, collateral utilized and collateral status (available

balance/due from client) with break up in terms of cash, Fixed Deposit Receipts (FDRs), Bank

Guarantee and securities.

36. The Client shall ensure that it has the required legal capacity to, and is authorized to, enter into the

relationship with stock broker and is capable of performing his obligations and undertakings

hereunder. All actions required to be taken to ensure compliance of all the transactions, which the

Client may enter into shall be completed by the Client prior to such transaction being entered into.

ELECTRONIC CONTRACT NOTES (ECN)

37. In case, client opts to receive the contract note in electronic form, he shall provide an appropriate email

id to the stock broker. The client shall communicate to the stock broker any change in the emailid

through a physical letter. If the client has opted for internet trading, the request for change of email

id may be made through the secured access by way of client specific user id and password.

38. The stock broker shall ensure that all ECNs sent through the e-mail shall be digitally signed,

encrypted, non-tamper able and in compliance with the provisions of the IT Act, 2000. In case, ECN is

sent through e-mail as an attachment, the attached file shall also be secured with the digital

signature, encrypted and non-tamperable.

39. The client shall note that non-receipt of bounced mail notification by the stock broker shall amount to

delivery of the contract note at the e-mail ID of the client.

40. The stock broker shall retain ECN and acknowledgment of the e-mail in a soft and non-tamperable

form in the manner prescribed by the exchange in compliance with the provisions of the IT Act, 2000

and as per the extant rules/regulations/circulars/guidelines issued by SEBI/Stock Exchanges from

time to time. The proof of delivery i.e., log report generated by the system at the time of sending the

contract notes shall be maintained by the stock broker for the specified period under the extant

regulations of SEBI/stock exchanges. The log report shall provide the details of the contract notes

that are not delivered to the client/e-mails rejected or bounced back. The stock broker shall take all

possible steps to ensure receipt of notification of bounced mails by him at all times within the

stipulated time period under the extant regulations of SEBI/stock exchanges.

41. The stock broker shall continue to send contract notes in the physical mode to such clients who do not

opt to receive the contract notes in the electronic form. Wherever the ECNs have not been delivered

to the client or has been rejected (bouncing of mails) by the e-mail ID of the client, the stock broker

shall send a physical contract note to the client within the stipulated time under the extant regulations

of SEBI/stock exchanges and maintain the proof of delivery of such physical contract notes.

42. In addition to the e-mail communication of the ECNs to the client, the stock broker shall

simultaneously publish the ECN on his designated web-site, if any, in a secured way and enable

relevant access to the clients and for this purpose, shall allot a unique user name and password to the

client, with an option to the client to save the contract note electronically and/or take a print out of the

same.

LAW AND JURISDICTION

43. In addition to the specific rights set out in this document, the stock broker, sub-broker and the client

shall be entitled to exercise any other rights which the stock broker or the client may have under the

Rules, Bye-laws and Regulations of the Exchanges in which the client chooses to trade and

circulars/notices issued thereunder or Rules and Regulations of SEBI.

44. The provisions of this document shall always be subject to Government notifications, any rules,

regulations, guidelines and circulars/notices issued by SEBI and Rules, Regulations and Bye laws of

the relevant stock exchanges, where the trade is executed, that may be in force from time to time.

45. The stock broker and the client shall abide by any award passed by the Arbitrator(s) under the

Arbitration and Conciliation Act, 1996. However, there is also a provision of appeal within the stock

exchanges, if either party is not satisfied with the arbitration award.

46. Words and expressions which are used in this document but which are not defined herein shall, unless

the context otherwise requires, have the same meaning as assigned thereto in the Rules, Byelaws and

Regulations and circulars/notices issued thereunder of the Exchanges/SEBI.

47. All additional voluntary clauses/document added by the stock broker should not be in contravention

with rules/regulations/notices/circulars of Exchanges/SEBI. Any changes in such voluntary

clauses/document(s) need to be preceded by a notice of 15 days. Any changes in the rights and

obligations which are specified by Exchanges/SEBI shall also be brought to the notice of the clients.

48. If the rights and obligations of the parties hereto are altered by virtue of change in Rules and

regulations of SEBI or Bye-laws, Rules and Regulations of the relevant stock Exchanges where the

trade is executed, such changes shall be deemed to have been incorporated herein in modification of

the rights and obligations of the parties mentioned in this document.

21 Part A - Mandatory

INTERNET & WIRELESS TECHNOLOGY BASED TRADING FACILITY

PROVIDED BY STOCK BROKERS TO CLIENT

(All the clauses mentioned in the ‘Rights and Obligations’ document(s) shall be applicable

Additionally, the clauses mentioned herein shall also be applicable.)

1. Stock broker is eligible for providing Internet based trading (IBT) and securities trading through the use

of wireless technology that shall include the use of devices such as mobile phone, laptop with data

card, etc. which use Internet Protocol (IP). The stock broker shall comply with all requirements

applicable to internet based trading/securities trading using wireless technology as may be specified

by SEBI & the Exchanges from time to time.

2. The client is desirous of investing/trading in securities and for this purpose, the client is desirous of

using either the internet based trading facility or the facility for securities trading through use of wireless

technology. The Stock broker shall provide the Stock broker's IBT Service to the Client, and the Client

shall avail of the Stock broker's IBT Service, on and subject to SEBI/Exchanges Provisions and the

terms and conditions specified on the Stock broker's IBT Web Site provided that they are in line with the

norms prescribed by Exchanges/SEBI.

3. The stock broker shall bring to the notice of client the features, risks, responsibilities, obligations and

liabilities associated with securities trading through wireless technology/internet/smart order routing or

any other technology should be brought to the notice of the client by the stock broker.

4. The stock broker shall make the client aware that the Stock Broker's IBT system itself generates the

initial password and its password policy as stipulated in line with norms prescribed by

Exchanges/SEBI.

5. The Client shall be responsible for keeping the Username and Password confidential and secure and

shall be solely responsible for all orders entered and transactions done by any person whosoever

through the Stock broker's IBT System using the Client's Username and/or Password whether or not

such person was authorized to do so. Also the client is aware that authentication technologies and

strict security measures are required for the internet trading/securities trading through wireless

technology through order routed system and undertakes to ensure that the password of the client

and/or his authorized representative are not revealed to any third party including employees and

dealers of the stock broker

6. The Client shall immediately notify the Stock broker in writing if he forgets his password, discovers

security flaw in Stock Broker's IBT System, discovers/suspects discrepancies/ unauthorized access

through his username/password/account with full details of such unauthorized use, the date, the

manner and the transactions effected pursuant to such unauthorized use, etc.

7. The Client is fully aware of and understands the risks associated with availing of a service for routing

orders overthe internet/securities trading through wireless technology and Client shall be fully liable

and responsible for any and all acts done in the Client's Username/password in any manner

whatsoever.

8. The stock broker shall send the order/trade confirmation through email to the client at his request. The

client is aware that the order/ trade confirmation is also provided on the web portal. In case client is

trading using wireless technology, the stock broker shall send the order/trade confirmation on the

device of the client

9. The client is aware that trading over the internet involves many uncertain factors and complex

hardware, software, systems, communication lines, peripherals, etc. are susceptible to interruptions

and dislocations. The Stock broker and the Exchange do not make any representation or warranty that

the Stock broker's IBT Service will be available to the Client at all times without any interruption.

10. The Client shall not have any claim against the Exchange or the Stock broker on account of any

suspension, interruption, non-availability or malfunctioning of the Stock broker's IBT System or

Service or the Exchange's service or systems or non-execution of his orders due to any link/system

failure at the Client/Stock brokers/Exchange end for any reason beyond the control of the stock

broker/Exchanges.

22 Part A - Mandatory

RISK DISCLOSURE DOCUMENT FOR CAPITAL MARKET AND DERIVATIVES SEGMENTS

23 Part A - Mandatory

This document contains important information on trading in Equities/Derivatives Segments of the stock

exchanges. All prospective constituents should read this document before trading in Equities/Derivatives

Segments of the Exchanges.

Stock exchanges/SEBI does neither singly or jointly and expressly nor impliedly guarantee nor make any

representation concerning the completeness, the adequacy or accuracy of this disclosure document nor

have Stock exchanges /SEBI endorsed or passed any merits of participating in the trading segments. This

brief statement does not disclose all the risks and other significant aspects of trading.

In the light of the risks involved, you should undertake transactions only if you understand the nature of the.

relationship into which you are entering and the extent of your exposure to risk.

You must know and appreciate that trading in Equity shares, derivatives contracts or other instruments

traded on the Stock Exchange, which have varying element of risk, is generally not an appropriate avenue

for someone of limited resources/limited investment and/or trading experience and low risk tolerance. You

should therefore carefully consider whether such trading is suitable for you in the light of your financial

condition. In case you trade on Stock exchanges and suffer adverse consequences or loss, you shall be

solely responsible for the same and Stock exchanges/its Clearing Corporation and/or SEBI shall not be

responsible, in any manner whatsoever, for the same and it will not be open for you to take a plea that no

adequate disclosure regarding the risks involved was made or that you were not explained the full risk

involved by the concerned stock broker. The constituent shall be solely responsible for the consequences

and no contract can be rescinded on that account. You must acknowledge and accept that there can be no

guarantee of profits or no exception from losses while executing orders for purchase and/or sale of a

derivative contract being traded on Stock exchanges.

It must be clearly understood by you that your dealings on Stock exchanges through a stock broker shall be

subject to your fulfilling certain formalities set out by the stock broker, which may inter alia include your filling

the know your client form, reading the rights and obligations, do's and don'ts, etc., and are subject to the

Rules, Byelaws and Regulations of relevant Stock exchanges, its Clearing Corporation, guidelines

prescribed by SEBI and in force from time to time and Circulars as may be issued by Stock exchanges or its

Clearing Corporation and in force from time to time.

Stock exchanges does not provide or purport to provide any advice and shall not be liable to any person

who enters into any business relationship with any stock broker of Stock exchanges and/or any third party

based on any information contained in this document. Any information contained in this document must not

be construed as business advice. No consideration to trade should be made without thoroughly

understanding and reviewing the risks involved in such trading. If you are unsure, you must seek

professional advice on the same.

1. BASIC RISKS:

1.1 Risk of Higher Volatility:

Volatility refers to the dynamic changes in price that a security/derivatives contract undergoes

when trading activity continues on the Stock Exchanges. Generally, higher the volatility of a

security/derivatives contract, greater is its price swings. There may be normally greater volatility

in thinly traded securities / derivatives contracts than in active securities /derivatives contracts. As

a result of volatility, your order may only be partially executed or not executed at all, or the price at

which your order got executed may be substantially different from the last traded price or change

substantially thereafter, resulting in notional or real losses.

1.2 Risk of Lower Liquidity:

Liquidity refers to the ability of market participants to buy and/or sell securities / derivatives

contracts expeditiously at a competitive price and with minimal price difference. Generally, it is

ANNEXURE V

assumed that more the numbers of orders available in a market, greater is the liquidity. Liquidity is

important because with greater liquidity, it is easier for investors to buy and/or sell securities /

derivatives contracts swiftly and with minimal price difference, and as a result, investors are more

likely to pay or receive a competitive price for securities / derivatives contracts purchased or sold.

There may be a risk of lower liquidity in some securities / derivatives contracts as compared to

active securities / derivatives contracts. As a result, your order may only be partially executed, or

may be executed with relatively greater price difference or may not be executed at all.

1.2.1 Buying or selling securities / derivatives contracts as part of a day trading strategy may

also result into losses, because in such a situation, securities / derivatives contracts may

have to be sold / purchased at low / high prices, compared to the expected price levels, so

as not to have any open position or obligation to deliver or receive a security / derivatives

contract.

1.3 Risk of Wider Spreads:

Spread refers to the difference in best buy price and best sell price. It represents the differential

between the price of buying a security / derivatives contract and immediately selling it or vice

versa. Lower liquidity and higher volatility may result in wider than normal spreads for less liquid

or illiquid securities / derivatives contracts. This in turn will hamper better price formation.

1.4 Risk-reducing orders:

The placing of orders (e.g., "stop loss" orders, or "limit" orders) which are intended to limit losses

to certain amounts may not be effective many a time because rapid movement in market

conditions may make it impossible to execute such orders.

1.4.1 A "market" order will be executed promptly, subject to availability of orders on opposite

side, without regard to price and that, while the customer may receive a prompt execution

of a "market" order, the execution may be at available prices of outstanding orders, which

satisfy the order quantity, on price time priority. It may be understood that these prices may

be significantly different from the last traded price or the best price in that security /

derivatives contract.

1.4.2 A "limit" order will be executed only at the "limit" price specified for the order or a better

price. However, while the customer receives price protection, there is a possibility that the

order may not be executed at all.

1.4.3 A stop loss order is generally placed "away" from the current price of a stock / derivatives

contract, and such order gets activated if and when the security / derivatives contract

reaches, or trades through, the stop price. Sell stop orders are entered ordinarily below the

current price, and buy stop orders are entered ordinarily above the current price. When the

security / derivatives contract reaches the pre -determined price, or trades through such

price, the stop loss order converts to a market/limit order and is executed at the limit or

better. There is no assurance therefore that the limit order will be executable since a

security / derivatives contract might penetrate the pre-determined price, in which case, the

risk of such order not getting executed arises, just as with a regular limit order.

1.5 Risk of News Announcements:

News announcements that may impact the price of stock / derivatives contract may occur during

trading, and when combined with lower liquidity and higher volatility, may suddenly cause an

unexpected positive or negative movement in the price of the security / contract.

1.6 Risk of Rumors:

Rumors about companies / currencies at times float in the market through word of mouth,

newspapers, websites or news agencies, etc. The investors should be wary of and should desist

from acting on rumors.

1.7 System Risk;

High volume trading will frequently occur at the market opening and before market close. Such

high volumes may also occur at any point in the day. These may cause delays in order execution

24 Part A - Mandatory

25 Part A - Mandatory

or confirmation.

1.7.1 During periods of volatility, on account of market participants continuously modifying their

order quantity or prices or placing fresh orders, there may be delays in order execution and

its confirmations.

1.7.2 Under certain market conditions, it may be difficult or impossible to liquidate a position in

the market at a reasonable price or at all, when there are no outstanding orders either on

the buy side or the sell side, or if trading is halted in a security / derivatives contract due to

any action on account of unusual trading activity or security / derivatives contract hitting

circuit filters or for any other reason.

1.8 System/Network Congestion:

Trading on exchanges is in electronic mode, based on satellite/leased line based

communications, combination of technologies and computer systems to place and route orders.

Thus, there exists a possibility of communication failure or system problems or slow or delayed

response from system or trading halt, or any such other problem/glitch whereby not being able to

establish access to the trading system/network, which may be beyond control and may result in

delay in processing or not processing buy or sell orders either in part or in full. You are cautioned to

note that although these problems may be temporary in nature, but when you have outstanding

open positions or unexecuted orders, these represent a risk because of your obligations to settle

all executed transactions.

2. AS FAR AS DERIVATIVES SEGMENTS ARE CONCERNED, PLEASE NOTE AND GET

YOURSELF ACQUAINTED WITH THE FOLLOWING ADDITIONAL FEATURES:-

2.1 Effect of "Leverage" or "Gearing":

In the derivatives market, the amount of margin is small relative to the value of the derivatives

contract so the transactions are 'leveraged1 or 'geared'. Derivatives trading, which is conducted

with a relatively small amount of margin, provides the possibility of great profit or loss in

comparison with the margin amount. But transactions in derivatives carry a high degree of risk.

You should therefore completely understand the following statements before actually trading in

derivatives and also trade with caution while taking into account one's circumstances, financial

resources, etc. If the prices move against you, you may lose a part of or whole margin amount in a

relatively short period of time. Moreover, the loss may exceed the original margin amount.

A. Futures trading involve daily settlement of all positions. Every day the open positions are

marked to market based on the closing level of the index / derivatives contract. If the

contract has moved against you, you will be required to deposit the amount of loss

(notional) resulting from such movement. This amount will have to be paid within a

stipulated time frame, generally before commencement of trading on next day.

B. If you fail to deposit the additional amount by the deadline or if an outstanding debt occurs

in your account, the stock broker may liquidate a part of or the whole position or substitute

securities. In this case, you will be liable for any losses incurred due to such close-outs.

C. Under certain market conditions, an investor may find it difficult or impossible to execute -

transactions. For example, this situation can occur due to factors such as illiquidity i.e.

when there are insufficient bids or offers or suspension of trading due to price limit or circuit

breakers etc.

D. In order to maintain market stability, the following steps may be adopted: changes in the

margin rate, increases in the cash margin rate or others. These new measures may also be

applied to the existing open interests. In such conditions, you will be required to put up

additional margins or reduce your positions.

E. You must ask your broker to provide the full details of derivatives contracts you plan to

trade i.e. the contract specifications and the associated obligations.

2.2 Currency specific risks:

1. The profit or loss in transactions in foreign currency-denominated contracts, whether they

are traded in your own or another jurisdiction, will be affected by fluctuations in currency

rates where there is a need to convert from the currency denomination of the contract to

26 Part A - Mandatory

another currency.

2. Under certain market conditions, you may find it difficult or impossible to liquidate a position. This

can occur, for example when a currency is deregulated or fixed trading bands are widened.

3. Currency prices are highly volatile. Price movements for currencies are influenced by, among

other things: changing supply-demand relationships; trade, fiscal, monetary, exchange control

programs and policies of governments; foreign political and economic events and policies;

changes in national and international interest rates and inflation; currency devaluation; and

sentiment of the market place. None of these factors can be controlled by any individual advisor

and no assurance can be given that an advisor's advice will result in profitable trades fora

participating customer orthat a customer will not incur losses from such events.

2.3 Risk of Option holders:

1. An option holder runs the risk of losing the entire amount paid for the option in a relatively

short period of time. This risk reflects the nature of an option as a wasting asset which

becomes worthless when it expires. An option holder who neither sells his option in the

secondary market nor exercises it prior to its expiration will necessarily lose his entire

investment in the option. If the price of the underlying does not change in the anticipated

direction before the option expires, to an extent sufficient to cover the cost of the option, the

investor may lose all or a significant part of his investment in the option.

2. The Exchanges may impose exercise restrictions and have absolute authority to restrict

the exercise of options at certain times in specified circumstances.

2.4 Risks of Option Writers:

1. If the price movement of the underlying is not in the anticipated direction, the option writer

runs the risks of losing substantial amount.

2. The risk of being an option writer may be reduced by the purchase of other options on the

same underlying interest and thereby assuming a spread position or by acquiring other

types of hedging positions in the options markets or other markets. However, even where

the writer has assumed a spread or other hedging position, the risks may still be

significant. A spread position is not necessarily less risky than a simple 'long' or 'short'

position.

3. Transactions that involve buying and writing multiple options in combination, or buying or

writing options in combination with buying or selling short the underlying interests, present

additional risks to investors. Combination transactions, such as option spreads, are more

complex than buying or writing a single option. And it should be further noted that, as in any

area of investing, a complexity not well understood is, in itself, a risk factor. While this is not

to suggest that combination strategies should not be considered, it is advisable, as is the

case with all investments in options, to consult with someone who is experienced and

knowledgeable with respect to the risks and potential rewards of combination transactions

under various market circumstances.

3. TRADING THROUGH WIRELESS TECHNOLOGY/SMART ORDER ROUTING OR ANY OTHER

TECHNOLOGY:

Any additional provisions defining the features, risks, responsibilities, obligations and liabilities

associated with securities trading through wireless technology/ smart order routing or any other

technology should be brought to the notice of the client by the stock broker.

4, GENERAL

4.1 The term ‘constituent’ shall mean and include a client, a customer or an investor, who deals with a

stock broker for the purpose of acquiring and/or selling of securities/derivatives contracts through

the mechanism provided by the Exchanges.

4.2 The term ‘stock broker’ shall mean and include a stock broker, a broker or a stock broker, who has

been admitted as such by the Exchanges and who holds a registration certificate from SEBI.

27 Part A - Mandatory

GUIDANCE NOTE - Do’s AND DON’Ts FOR TRADING ON THE EXCHANGE(S) FOR INVESTORS

BEFORE YOU BEGIN TO TRADE

1. Ensure that you deal with and through only SEBI registered intermediaries. You may check their SEBI

registration certificate number from the list available on the Stock exchanges www.nseindia.com,

www.bseindia.com and SEBI website: www.sebi.gov.in.

2. Ensure that you fill the KYC form completely and strike off the blank fields in the KYC form.

3. Ensure that you have read all the mandatory documents viz. Rights and Obligations, Risk Disclosure

Document, Policy and Procedure document of the stock broker.

4. Ensure to read, understand and then sign the voluntary clauses, if any, agreed between you and the

stock broker. Note that the clauses as agreed between you and the stock broker cannot be changed

without your consent.

5. Get a clear idea about all brokerage, commissions, fees and other charges levied by the broker on you

for trading and the relevant provisions/ guidelines specified by SEBI/Stock exchanges.

6. Obtain a copy of all the documents executed by you from the stock broker free of charge.

7. In case you wish to execute Power of Attorney (POA) in favour of the Stock broker, authorizing it to

operate your bank and demat account, please refer to the guidelines issued by SEBI/Exchanges in this

regard.

TRANSACTION AND SETTLEMENTS

8. The stock broker may issue electronic contract notes (ECN) if specifically authorized by you in writing.

You should provide your email id to the stock broker for the same. Don't opt for ECN if you are not

familiar with computers.

9. Don't share your internet trading account's password with anyone.

10. Don't make any payment in cash to the stock broker.

11. Make the payments by account payee cheque in favour of the stock broker. Don't issue cheques in the

name of sub-broker. Ensure that you have a documentary proof of your payment/deposit of securities

with the stock broker, stating date, scrip, quantity, towards which bank/ demat account such money or

securities deposited and from which bank/ demat account.

12. Note that facility of Trade Verification is available on stock exchanges' websites, where details of trade

as mentioned in the contract note may be verified. Where trade details on the website do not tally with

the details mentioned in the contract note, immediately get in touch with the Investors Grievance Cell

of the relevant Stock exchange.

13. In case you have given specific authorization, payout of funds or delivery of securities as the case may

be, may not be made to you within one working day from the receipt of payout from the Exchange. Thus

the stock broker may maintain a running account for you subject to the following conditions:

a) Such authorization from you shall be dated, signed by you only and contains the clause that you

may revoke the same at any time.

b) The actual settlement of funds and securities shall be done by the stock broker, at least once in a

calendar quarter or month, depending on your preference. While settling the account, the stock

ANNEXURE VI

broker shall send to you a 'statement of accounts' containing an extract from the client ledger for

funds and an extract from the register of securities displaying all the receipts/deliveries of funds

and securities. The statement shall also explain the retention of funds and securities and the

details of the pledged shares, if any.

c) On the date of settlement, the stock broker may retain the requisite securities/funds towards

outstanding obligations and may also retain the funds expected to be required to meet derivatives

margin obligations for next 5 trading days, calculated in the manner specified by the exchanges.

In respect of cash market transactions, the stock broker may retain entire pay-in obligation of

funds and securities due from clients as on date of settlement and for next day's business,

he may retain funds/securities/margin to the extent of value of transactions executed on

the day of such settlement in the cash market.

d) You need to bring any dispute arising from the statement of account or settlement so

made to the notice of the stock broker in writing preferably within 7 (seven) working days

from the date of receipt of funds/securities or statement, as the case may be. In case of

dispute, refer the matter in writing to the Investors Grievance Cell of the relevant Stock

exchanges without delay.

14. In case you have not opted for maintaining running account and pay-out of funds/securities is

not received on the next working day of the receipt of payout from the exchanges, please refer

the matter to the stock broker. In case there is dispute, ensure that you lodge a complaint in

writing immediately with the Investors Grievance Cell of the relevant Stock exchange.

15. Please register your mobile number and email id with the stock broker, to receive trade

confirmation alerts/ details of the transactions through SMS or email, by the end of the trading

day, from the stock exchanges.

IN CASE OF TERMINATION OF TRADING MEMBERSHIP

16. In case, a stock broker surrenders his membership, is expelled from membership or declared

a defaulter; Stock exchanges gives a public notice inviting claims relating to only the

"transactions executed on the trading system" of Stock exchange, from the investors. Ensure

that you lodge a claim with the relevant Stock exchanges within the stipulated period and with

the supporting documents.

17. Familiarize yourself with the protection accorded to the money and/or securities you may

deposit with your stock broker, particularly in the event of a default or the stock broker's

insolvency or bankruptcy and the extent to which you may recover such money and/or

securities may be governed by the Bye-laws and Regulations of the relevant Stock exchange

where the trade was executed and the scheme of the Investors' Protection Fund in force from

time to time.

DISPUTES / COMPLAINTS

18. Please note that the details of the arbitration proceedings, penal action against the brokers

and investor complaints against the stock brokers are displayed on the website of the relevant

Stock exchange.

19. In case your issue/problem/grievance is not being sorted out by concerned stock broker/subbroker

then you may take up the matter with the concerned Stock exchange. If you are not

satisfied with the resolution of your complaint then you can escalate the matterto SEBI.

20. Note that all the stock broker/sub-brokers have been mandated by SEBI to designate an email

ID of the grievance redressal division/compliance officer exclusively for the purpose of

registering complaints.

28 Part A - Mandatory

Part A - Mandatory 29

BROKERAGE AND STATUTORY CHARGES FOR CLIENT

Further, I agree to the following terms of doing business

Segment Sq. off % Sq. off Min (ps) Settlement % Settlement Delivery % Delivery

Min (ps) Min (ps)

BSE Cash

Buy Sell Buy Sell Buy Sell

TARIFF SHEET

The above brokerage will be exclusive of the following charges

Transaction charges

Sq. up Stamp Duty

Del. Stamp Duty

STT

Service Tax as Applicable

Clearing House Dmat charges

Note : The above charges are subject to change by regulatory authorities or government agencies:

: For option contracts brokerage to be charged on the premium at which the option contract was

bought or sold and not on the strike price of the option contract.

Signature of Client : _________________________________

For office use only :

Name of authorized person : _________________________________

Signature : _________________________________

Date : _________________________________

BSE F & O

BSE Cash

BSE F & O

(Kindly note that these additional clause(s)/ documentation(s) are voluntary and at the discretion of the

stock broker / trading member and the client. The same are required in order to ensure running on a day-today

basis between the stock broker / trading member and the client. The client need not execute this

document if he / she does not wish to. The client has the right to terminate the document)

To,

K. M. Jain Stock Brokers Private Limited

631, P. J. Towers, Dalal Street,

Mumbai - 400 001.

Sir(s)

Re: Running Account Authorization

We are aware that as per the SEBI / Exchange requirements, the settlement of funds/securities shall be

done within one working day of the payout. However, we request you to kindly keep my account as a

running account, which will entail that all securities and funds due to us on payout shall be withheld with

yourselves and given to us only on demand. We understand that:

1. As per SEBI requirements, the authorization shall be dated and signed by me only.

2. The manner of renewal will be as per the policies on your website http://www.kmjpl.com which under

all circumstances shall be conforming to the norms prescribed by SEBI/Exchanges.

3. We can revoke this running account authorization at any time.

4. You shall transfer the funds / sucurities lying in our credit within one working day of the request if the

same are lying with you and within three working days from the request if the same are lying with the

Clearing Member/ Clearing Corporation.

5. I/We request you to maintain running balance in my account & retain the credit balance in any my/our

account and to use the unutilized finds towards upfront margin requirement or any other exchange

obligation unless I/we instruct you otherwise.

6. I/We request you to retain securities in your designated client account and consier them towards

upfront margin requirement or any other exchange obligation unless I/we instruct you otherwise.

This running account authorization will remain valid till it is revoked by me/us in writhing or through email.

Thank you

Client Signature __________________________________

Place :

Date :

Note: The authorization shall be signed by the client only and not by any authorized person on his behalf or

any holder of the Power of Attorney.

ALL EXCHANGES RUNNING ACCOUNT AUTHORISATION

Part A - Mandatory 30

Part A - Mandatory 31

(Kindly note that these additional clause(s)/ documentation(s) are voluntary and at the discretion of the

stock broker / trading member and the client. The same are required in order to ensure running on a day to

day basis between the stock broker / trading member and the client. The client need not execute this

document if he / she does not wish to. The client has the right to terminate the document)

To,

K. M. Jain Stock Brokers Private Limited

631, P. J. Towers, Dalal Street,

Mumbai - 400 001.

Sir(s)

Re: Letter for authorized signatories

Kindly find below a list of authorized signatories to represent us, their authority including but restricted to

1. Placing/ modifying/ canceling orders on our behalf

2. Acknowledging contract notes/bills/Cr & Dr notes issued by you to us for our trades

3. Communicating changes in our KYC details

4. All other communications from us to you

Name of the signatories Signature Relation, if any

123

Thank you

(Client Sign) _______________________________________

Place :

Date :

LETTER FOR AUTHORISED SIGNATORIES - ALL EXCHANGES

INTIMATION TO CLIENTS AND NOTING

To,

K. M. Jain Stock Brokers Pvt. Ltd.

631, P. J. Towers, Dalal Street,

Fort, Mumbai - 400 001.

Sir(s)

Re: Confirmation of noting

We confirm that we have made note of the following:

1. That you trade in your OWN/PRO account

2. That your investor grievance email ID is grievances@kmjpl.com

Thank you

Client Signature : ______________________________

Place :

Date :

Part A - Mandatory 32

DIGITALLY SIGNED CONTRACTS/ COMMUNICATIONS – ALL EXCHANGES

(Kindly note that these additional clause(s)/ documentation(s) are voluntary and at the discretion of the

stock broker/ trading member and the client. The same are required in order to ensure smooth

communication between the stock broker/ trading member and the client. The client need not execute this

document if he / she does not wish to. The client has the right to terminate the document)

To,

K.M.Jain Stock Brokers Private Limited

631, P.J.Towers,

Dalal Street,

Mumbai. 400001.

Re: Digitally signed contract/communication confirmation

We hereby consent for receiving contract notes in an electronic form (ECN) and other digitally signed

communication via email on our email ID as under

Email ID (1) : ___________________________________________________

Alternate Email ID (2): ___________________________________________________

I/We understand that:

·you shall be issuing ECNs authenticated by means of digital signatures after obtaining digital

signature certificate from Certifying Authority under the IT Act, 2000

·all ECNs sent by through the e-mail shall be digitally signed, encrypted, non tamperable and shall

comply with the provisions of the IT Act, 2000. In case the communication is sent through e-mail as

an attachment, the attached file shall also be secured with the digital signature, encrypted and nontamperable

·all other communication- like bills, ledger confirmations, securities’ confirmation note, daily margin

statements etc will be sent to us through my/our email ID given below and I/we am/are bound to

treat them as acknowledged.

·You will allot a unique user name and password to enable us to access the ECNs posted on the

website http://www.kmjpl.com in a secured way with an option to access the same and save the

contract note electronically or take a print out of the same

·We have noted that non-receipt of bounced mail notification from our email ID shall amount to

delivery of the ECNs/ communication at our e-mail ID

·Wherever the ECNs have not been delivered or has been rejected, you shall send a physical

contract note to us

·Any change in the email ID shall be communicated by us through a physical letter to yourselves

(_________________________________)

(Client Sign)

Place:

Date:

To,

K. M. Jain Stock Brokers Pvt. Ltd.

Dear Sir,

I refer to the trading account opened with you in the name of_________________________________and

declare and authorize you as under.

I recognize that a beneficiary account cannot be opened with a depository participant in the name of sole

proprietorship firm as per Regulations, To facilitate the operation of the above trading account with you and

for the purpose of completing the share transfer obligations pursuant to ;the trading operations, I authorise

you to recognise the beneficiary account No. ___________________________________ with depository

_____________________________having DP ID _______________________________ opened in the

name of the undersigned who is the sole proprietor of the firm.

I agree that the obligation for shares purchased and / or sold by the firm will be handled and completed

through transfers to / from the above mentioned account. I recognise and accept transfers made by you to

the beneficiary account as complete discharge of obligation by you in respect of trades executed in the

above trading account of the firm.

________________________________________

Signature ( Please sign with stamp of the firm )

Further I, the undersigned , am the sole proprietor of the firm and solely responsible for the liabilities

thereof. I shall advise you in writing of any change that place in the constitution of the firm and I will be

personally liable to you for all the obligations that the firm may incur in the course of dealings with you and

undertake to personally discharge such liabilities.

Yours truly ,

Signature ( Please sign without stamp of the firm )

814, P. J. Tower,

Dalal Street,

Mumbai - 400 001.

DECLARATION BY SOLE PROP. FIRM

(On The Letter Head of the firm or duly filled us with seal of the Firm)

Part A - Mandatory 33

DECLARATION OF JOINT FAMILY BY HUF

To, Dated : ________________

K. M. Jain Stock Brokers Pvt. Ltd.

Client Code :

1. WHEREAS the Hindu Undivided Family of _______________________________ ( hereinafter

referred to as the said joint family ) Carrying on business in the firm name and style of

_______________________ at _____________________ or elsewhere ( hereinafter referred to as

the said HUF), have of desire to have Share Trading A/C with K. M. Jain Stock Brokers Pvt. Ltd.

(hereinafter referred to as 'Member') we, the undersigned, hereby declare.

(a) that we are the present adult co- parceners of the said joint family ;

(b) that Sh __________________________________ is the present Karta of Manager of the said

Joint Family.

(c) that we are entitled to trade in shares and open Share Trading Account of the said Joint Family

(d) that each one of us has full and unrestricted to act on behalf, and bind, the said H U F and all the

present as well as future members, both aquirs and minors, of the said Joint family, howsoever

constituted from time to time.

2. We confirm that the affairs of the said joint family and the business of the said HUF are carried on

mainly by the Karta/Manager, the said Sh ___________________________ on behalf of and in the

interest and in the interest and for the benefit of all co-parceners of the said joint family. We hereby

authorize the Karta / Manager Sh_____________________________ on behalf of the HUF to deal on

Capital Market segment ( CM ), Futuers and Options segment ( F & O ) or any other segment that may

be introduced by NSE / BSE in future and the said Trading Members is hereby authorize to honor all

instructions oral written given by him on behalf of the HUF.

Sh. _____________________________ is authorized to sell, purchase, transfer, endorse, negotiate

documents and / or otherwise deal through K. M. Jain Stock Brokers Pvt . Ltd. on behalf of the HUF. He

is also authorized to sign, execute and submit such applications, undertakings, agreements and other

requisite documents, writings and deeds as may be deemed necessary of expedient to open account

and give effect to this purpose. We are, however, jointly and severally responsible for all liabilities of

the said HUF to the Member and agree and confirm that any claim due to the Member from the HUF

shall be recoverable from the assets of any one or all of us and also from the estate of the said joint

family including the interest thereon of every co parcener of the said joint family, induding the share of

the minor co-parceners, if any.

3. We undertake to advise the Member in writing of any change that may occur in the Karta /Managership

or in the constitution of the said joint family or of the said HUF and until receipt of such notice by the

Member, the Member will be entitled to regard each of us as a member of the said joint family and as a

partner of the said HUF and all acts, dealings and transactions purporting to have been done on the

said joint family and the said HUF before the Member's shall be binding on the said joint family and the

said HUF and on their respective estates. We shall, however continue to be liable jointly and severally

to the Member for all dues and obligations shall have bechfiquidated and discharged.

4. We recognize that beneficiary account can be opened with Depository participant only in the name of

Karta as per regulations. To facilitate the operation of the above share trading account with you and for

the purpose of compieting the share transfer obligations pursuant to the trading operations, we

authorize you to recognise the beneficiary account no. with Depository opened in this name of Sh

_______________________________ who is the Karta / Manager of this HUF.

5. I agree that obligations for share purchase and / or sale by the HUF will Be handled and completed

through transfers to / from the above mentioned account. I recognise and accept transfer made by you

to the beneficiary account as completion of obligations by you in respect of trades executed in the

above trading account of the HUF.

6. The names and cates of birth of the present minor co-parceners of the said joint family are given

below. We undertake to inform you in writing as and when each of the said members attains the age of

814, P. J. Tower, Dalal Street, Mumbai - 400 001.

Part A - Mandatory 34

majority and is authorize to act on behalf of, and bind, the said H. U. F.

7. We have received and read a copy of the Member's rules and regulations for the conduct of Share

Trading Account and we agree to comply with and be bound by the said rules now in force of any

changes that may be made therein from time to time.

Yours faithfully

________________ _________________ ________________ _______________

( Full signatures of Karta and all major co-parceners)

Name of the Minor Father’s Name Date of Birth

Date:

To,

K.M. Jain Stock Brokers Pvt. Ltd.

814, P. J. Towers, Dalal Street,

Mumbai - 400 001.

Dear Sir,

We refer to the trading account being opened/opened with you in the name _____________________

________________________ and authorize you as under.

We recognize that a beneficiary account cannot be opened with a depository participant in the name of

a partnership firm as per Regulations. To facilitate the operation of the above trading account with you and

for the purpose of completing the securities transfer obligations pursuant to the trading operations, we

authorize you to recognize the beneficiary account No. ______________ with depository

_______________________________ opened as a joint account in the names of the partner of the firm.

We agree that the obligations for shares purchased and /or sold by the firm will be handled and

completed through transfer to/ form the above-mentioned account. We recognize and accept transfers

made by you to the beneficiary account as complete discharge of obligations by you in respect of trades

executed in the above trading account of the firm. We hereby authorize________________________

______________, partner in the firm to execute / sign and submit such documents, agreements, deeds

etc. as any be necessary to enter into the agreement and engage in business with K. M. Jain Stock

Brokers Pvt. Ltd. and to place order for buying and selling of securities, sell, purchase, transfer, endorse,

negotiate and do other things that may be necessary to engage in business on behalf of the partnership

and to sign the authority letter for adjustment of balances in family accounts

Name of Partners (In Block Letters) Signature

DECLARATION TO BE GIVEN BY PARTNERSHIP FIRM

(On The Letter Head of the firm or duly filled up with seal of the Firm)

Part A - Mandatory 35

Part A - Mandatory 36

Certified true copy of Board Resolution passed at the meeting of the board of directors/trustees of

______________________________and having its registered office at _______________________held

on _________day of ________20____at_______a.m/p.m.

Resolved that the company is empowered to deal in equities, Derivatives, debentures, forex derivatives,

debt & other capital market products and agrees to register itself as a client of K.M.Jain stock Brokers Pvt.

Ltd after reading the rules and regulations as set out in their “Know your Client Form”.

Further resolved that the below mentioned directors be and are hereby authorized to deal in all the financial

products of capital, derivatives, forex and debt market and further that any one or more of the below

mentionde directors can communicate to place and execute orders orally or in writing to M/s K.M.Jain

stock brokers Private Limited.

Name of Director(s) Signature

1._______________________ ____________________

2._______________________ ____________________

3._______________________ ____________________

Chairman-Director of the Company/Trustee

Date :

Place :

FORMAT OF BOARD RESOLUTION FOR CORPORATES/TRUSTS

Part A - Mandatory 37

Policy 1. refusal of orders for penny stocks

A penny stock can be typified as one which has one or more of the given below characteristics:

Stock that trades at a repatively low price and / or market capitalization

Highly speculative and risky because of lack of liquidity

Large bid-ask spreads

Showing sporadic volume pattern in tandem with bulk trades

Association with errant promoters and/or classified under Z or T group by exchanges

Our RMS reserves the “right to refusal” to trade in such stocks and consequently all losses pertaining to it

wouldbe bourne by the client. Such a decision would emanate after considering above-mentioned points.

The client. Such a decision would emanate after considering above-mentioned points. The client should

also be ready to pay 100% margin pertaining to the scrip, if need be.

Policy 2. setting up client’s exposure limit

Our RMS refers the following points before giving exposure to our clients, which in turn can vary from time

to time in view of the then prevailing circumstances:

Client’s net worth

Collateral or deposits taken from the client

Existing open positions of client and the various margin obligation

Broker’s risk perception of the client

Prevailing market volatility

The benefit of ‘credit for sale of shares’ is to be considered while evaluating the exposure of a client.

In case of F&O trading, collateral received after the trading day in ‘client’s ,margin account’ will not be

considered for margin and exposure calculation.

Scrip wise exposure can vary depending upon the group to which the scrip belongs. A client is liable

to get less exposure for scrip under ‘Z’ & ‘T’ groups, as the broker has to keep in mind the total

turnover of the scrip, liquidity during the day, per day limits for a particular Group (e.g. T, Z groups) set

by Exchanges or any such reasons after referring the daily notices of Exchanges & SEBI.

Any other relevant factor.

The client has to agree to exposure/margin variation, imposition and restrictions that can affect his ability to

execute the orders solely as per his wish. Further the client has to agree that the losses if any on account of

such refusal of due to delay caused by periodic reviews of interventions shall be borne exclusively by the

client alone.

Policy 3. applicable brokerage rate

Brokerage rates will be charged within the limits prescribed by SEBI/Exchange - ie. Not more than

2.5% on market rate

At the time of opening of client’s account the brokerage rates will be assigned in consultation with the

client/sub-broker. Any change intended by either broker or client will be done after mutual discussion

thereof. The client should sign on the tariff sheet and should convey any deviation within seven days

of signing the sheet.

For option contracts brokerage will be charged on the premium at which the option contract was

bought of sold and not on the strike price of the option contract.

Policy 4. imposition of penalty/delaved payment charges by either party, specifying the rate and

the period not resulting in funding by the broker in contravention of the applicable laws

Where the Broker has to bear or pay any fines/penalties/punishment from any of the authorities likes

SEBI/RBI/Exchanges/Banks etx in connection with/as a consequence of/in relation to any of the

orders/ rades/deals/actions of the client, then the same will be borne by the client.

·····

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POLICIES AND PROCEDURES FOR CLIENT DEALING - ALL EXCHANGES - MANDATORY

( as required bv SEBI circular MIRSD/SE/Cir- 19/2009 dated December 3, 2009 )

Part A - Mandatory 38

·

·

·

·

·

·

·

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·

All penalties due to client’s negligence, what-so-ever it may be, pertaining to their trading account

should be borne by Client

Policy 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 (Limited to the extent of settlement/ margin

obligation)

Without prejudice to the stock broker other rights including the right to refer the matter to arbitration,

the stock broker shall be entitled to liquidate / close out all of any of the client’s position without giving

notice to the client for non payment of margins or other amounts including the pay-in obligation,

outstanding debts etc. and adjust the proceeds of such liquidation/close out, if any against the client’s

liabilities/obligations.

The client shall ensure timely availability of find/securities in the form and manner at decimated time

and in

Normally, a client who has outstanding debit balance for more than three months/six months (as will

be decided by management ) can be asked to make good the expenses of all kind, including

TOD/ODinterest charges that the broker had to bear due to his inability to clear dues.

Policy 6. Shortages in obligations arising out of internal of trades

Stock broker shall not be entitled to deliver any securities or pay any money to the client until and

unless the same has been received form the Exchange/Clearing House/Clearing Corporation or any

other authorized entity provide the client has fulfilled his obligations first. Internal shortage of

securities due for some corporate action/or cum-benefit securities that cannot be auctioned/or the

pay-out of cum-benefit securities is after the book closure of record date, then such a situation would

compulsorily attract a close out 10% above the higher of: standard closing rate on the auction day or

the highest traded price of the scrip starting from the trading day till the corresponding auction day.

BSE - In case of BSE we always opt for the procedure of “internal auction” available with the

exchange. If due to any reason the same could not be done then the broker will opt to close out the

position considering the higher of the following rate - a) Trading day standard rate or b) highest

auction rate corresponding to the requisite settlement day.

NSE - The clients will be debited and credited considering the higher of the following rate - a) Trading

day standard rate or b) highest auction rate corresponding to the requisite settlement day.

Policy 7. conditions under which a client may not be allowed to take further position of the broker

may close the existing position of a client

The above condition applies in the following cases:

When the gross exposure/collateral set for the client gets exhausted.

The existing position of the client is also liable to be squared up when the client fails to provide extra

margin or fails to fulfill his obligations even upon being intimated.

Due to non- receipt of non-fulfillment of money and/or delivery pay - in & payout obligation by the

client incase of cash segment.

Due to non-receipt or non-fulfillment of money pay-in obligation by the client as required by

exchanges in F&O segment.

In extraordinary circumstances whence the Broker is advised by the Exchange to reduce exposure

to facilitate smooth working of the Exchange.

In view of the high volatility of marker

Policy 8. temporarily suspending of closing a client’s account at the client’s request

Temporarily suspending of account-the client’s account can be temporarily suspended provided the

client gives in writing to do so. It can be re-activated on receipt of written instruction from the client.

However client’s share/Iedger settlement would be allowable.

Closure of client’s account-A client’s account can be closed if a written request is received for the

same provided all accounts across all segments are settled in terms money and delivery of shares.

Part A - Mandatory 39

Policy 9. deregistering a client

Notwithstanding anything contray stated in the agreement, the stock broker shall be entitled to terminate

the agreement in any of the following circumstances:

1) Incase of death / lunacy or any other disability of the client

2) Incase of breach of any term, condition or covenant of this agreement

3) Incase the client has made material misrepresentation in the facts disclosed in his KYC

4) If there is commencement of any legal proceedings against the client under any law in force.

5) If the action of the client are prima-facie illegal / improper of one that points to price manipulation of

that disturbs the normal functioning capital market, whether alone of in conjunction with others.

6) In case the client defaults in fulfillment of his exchange related obligations

7) In case of dissolution of partnership firm and the partnership firm or any of its partner being the client

of the broker.

8) If the client has voluntarily of compulsorily become the subject of proceedings under any bankruptcy

or insolvency law or being a company, goes into liquidation or has a receiver appointed in respect of

its assets or refers itself to BIFR or under any other law providing protection as a relief undertaking.

9) If any covenant or warranty of the client is incorrect or untrue in any material respect.

10) If there is reasonable apprehension that the client would be unable to pay its debts or the client has

admitted its inability to pay its debt as and when they become payable.

11) If a receiver, administrator or liquidator has been appointed of allowed to be appointed for all or any

part of the

5. Whether the client is inactive due to change of his residential location to a remote area foreign

country and has intimated his wish to remain dormant temporarily?

After considering the above points, we would consider whether the client trading and/of demat

account needs to be closed permanently or not. Having typified the client as ‘inactive’, we would proceed to

intimate him about the same.

Normally only after three years of inactivity, we would tag the client as ‘inactive’ in BSE/NSE online

database.

Policy 11. policy on cash / bank contra A/c

To facilitate pay-in / pay-out obligations among various segments namely ‘BSE, NSE & NSE F&O’, we,

move funds froms one segment to another in the form of contra entry, subject to the following points:

1. Fund to be moved when a client has credity lying in one segment and pay-out / credit in another

segment.

2. to bring about agility in the system and avoid delays

3. To avoid the inconvenience of taking cheque in one segment and delivering in another.

4. And, above all to ensure smooth process of fulfilment of market obligations.

Policy 12. client code modification Policy

We intend to adhere to the new SEBI directive on ‘UCC changes and its implications’ The following steps

of the undertaking of the client.

12) If there is reasonable apprehension about the clients' solvency or ability to fulfill his obligations.

Policy 10. policy regarding treatment of inactive client

As per the exchange rules, any client who does not have any single trade during a financial year is

considered as an “in-active client”.

We will typify a client as “inactive” after considering the following aspects:

1. Whether there exists any trade in his ledger account whose obligation has been fulfilled through the

exchange trading platform?

2. Whether the client is active in any other segment?

3. Whether the client has any debits or credits lying in any of his ledger account, in any of the segments?

4. Whether the client is trying to settle his dues, though he is an inactive trader? ie. Only banking

transactions appear in his ledger account?

Part A - Mandatory 40

taken in that regard are:

1. All terminal Ids of BSE & NSE will remain locked for any UCC change.

2. We will not allow any back-office UCC modification.

3. For unforeseen genuine errors during trading session-the particular ID would be activated for

modification only for 2 minutes through ADMIN terminal. In case of BSE, the reason for change

would be submitted at the end of the day through BEFS site provided by exchange.

4. ‘ERROR’ code would be created in UCC site of both BSE & NSE, which will incorporate similar

details of OWN/PRO details including PAN number. The wrong code trades can be transferred to the

ERROR code and futher transferred to the correct code thereby squaring up the transaction in

ERROR code. By doing so, we can avoid penalty, provided the ERROR code is squared up the same

day. The difference would be borne by the avoif penalty, provided the ERROR code is squared up the

same day. The difference would be borne by the wrongdoer.

5. Institutional to Institutional trades can be modified without attracting penalty.

Code Modification Summary

From To Allowed/Not Allowed Penalty/No penalty

Insti Error Allowed No penalty

Non Insti Error Allowed No penalty

Insti Insti Allowed No penalty

Client Client Allowed Penalty

(in certain cases only)*

* As per BSE/NSE notice for permitted changes

* In BSE BOLT, order type change is different form order code change

We can change code only in case of following

- Communication Error and/or

- Punching Error and/or

- Typing error (similar client code/name)

We can change code between relatives

- Relative as defined under sec. 6 the Companies Act, 1956

However, even though we can change code

Penalty of 1% or 2% of trade value depending on quantum of changes for the day will be levied

·

·

·

Policy 13. Investor grievances policy

All investors are free to communicate their grievances through our dedicated investor grievances email id:

grievances@ kmjpl.com or through our investor grievances register kept in all our offices at convenient

accessible place. Investors will be assured prompt reply and resolution to their grievances. The process for

prompt redresses would entail the following steps:

Nature of grievance- whether monetary, documentary requirement or otherwise

If monetary-then the cause and the veracity needs to be established. If the established. if the veracity

is established by our back office then the client can expect quick dissipation. If veracity is denied by our

back office, then the client would be duly informed with facts and figures.

··

·If non-receipt of a document- then the back office manager would ensure that the documents are

despatched immediately or a duplicate copy is forwarded to the client.

·Other grievances- solution to be decided only after collating the details.

14.Policy for unauthentic news in circulation

Our company discourages circulation of unauthentic news and hearsays through emails, sms or printed

material. All research news is handled only by our sole research department active in our Mumbai head

office. Any news not bearing our research department approval shall have no bearing and may be

considered false. All the printed material emanating from our research department, in Mumbai Head office

will always be based on facts and /or permissible scientific assumptions.

Part A - Mandatory 41

15.Policy for trading in illiquid stocks

An illiquid stock can be typified as one which has almost all the given below characteristics:

·Highly speculative and risky because of lack of liquidity

·Large bid-ask spreads

·Showing sporadic volume patterns

·Periodically classified by Exchanges in their list of –'illiquid securities'

Our RMS reserves the “right to refusal” to trade in such stocks and consequently all losses pertaining to it

would be borne by the client. The client should also be ready to pay 100% margin pertaining to the scrip, if

need be.

These policies have been adopted by the trading member as on 1.04.2010 and may have been revised

over time. Latest version of the policy is available at the trading members’ website www.kmjpl.com.

Signature of the Client _______________________________________

Place :

Date :

Part A - Mandatory 42

Dear Customer,

Subject : Prevention of Money Laundering Act (PMLA)

Subject to the requirements under the Prevention of Money Laundering Act, 2002 (PMLA), guidelines

issued by RBI and SEBI from time to time, the prospective clients (those persons who want to become

clients of K. M. Jain Stock Brokers Pvt. Ltd. are requested to not the following Anti Money Laundering

(AML) procedures:

1. No account can be opened in fictitious / benami name or on anonymous basis.

2. No account will be opened where prospective client is unable to prove / submit

i) Identity Proof

ii) Address Proof

iii) PAN Card and other information / documents demanded by K. M. Jain Stock Brokers Pvt. Ltd.

which are essential for accunt activation as per SEBI guidelines.

3. Complete and correct contact details like Telephone No., mobile / cell no., E-mail address should be

provided for easy and prompt communication.

4. Please indicate your occupation and the Income Range to which you belong at the appropriate place in

the KYC Kit (application from) This is very essential Applications without these details are liable to be

rejected.

5. No cash will be accepted by K. M. Jain Stock Brokers Pvt. Ltd. under any circumstances. You will

make all payments to us by means of a Cheque / DD payable at our branch and similarly all payments

due to you are paid by means of a cheque / DD payable at the place registered with K. M. Jain Stock

Brokers Pvt. Ltd.

6. K. M. Jain Stock Brokers Pvt. Ltd. at its sole discretion, reserves the right to ask for additional

information / documents relating to income such as Bank a/c statements, Income Tax returns and / or

net worth statements as may be required under PMLA, 2002 from time to time and as a client you are

required to supply such information / documents.

7. K. M. Jain Stock Brokers Pvt. Ltd. reserves the right to verify the details provided in the KYC by the

Client like Residential / Official address, Telephone No. by visiting / calling etc. (as a done in credit card

verification.) Hence correct and complete details mush be given.

8. Apart from the above, under PMLA, 2002, in order to discourage and identify any money laundering or

terrorist financing activities, financial intermediaries like our Company may call for additiona

disclosures relating to your transactions.

9. Please produce all supporting documents in original together with a copy and originals will be returned

to you after verification.

10. We hope you will have a happy and a profitable association with.

Thank you,

Yours faithfully,

Signature of the Client : ____________________________________

Name of the Client: ______________________________________

Client Code : ____________________________________

Part A - Mandatory 43

1. Objective & Policy: Primary objective of our firm would be ‘Prevention of money laundering through

designated brokers, intentionally or unintentionally by criminal elements’. It is the policy of our firm to

prohibit and actively prevent money laundering and any activity that facilitates money laundering or the

funding of terrorist or criminal activities.

2. Principal Officer appointment & duties : Our firm has designated Mr. Anad Jain as the principal officer

and intimated the authority vide letter dtd. 31.01.07, thereby complying with the procedure of designating a

sufficiently senior person as ‘Principal Officer’ as required under the Prevention of Money Laundering Act.

The principal officer will promptly notify Financial Intelligence Unit (FIU) of any change to the details of our

firm. The principal officer will also ensure maintenance of proper record and filing of records with FIU,

whenever required.

3. Know Your Customer Standards: Our KYC policy incorporates the following four elements:

·Customer Acceptance Policy (CAP)

·Customer Identification Procedures (CIP)

·Monitoring of Transaction; and

·Risk Management

Customer Acceptance Policy (CAP)

The following points are kept in mind before accepting the KYC form of a probable client

No account shall be opened in anonymous or fictitious/benami name(s)

Parameters of risk perception shall be clearly defined in terms of the nature of business activity, location of

customers into low, medum and high risk; Customers requiring veryhigh level of monitoring e.g., Politically

Exposed Persons (PEPs) may be categorized under Very High Risk.

The risk to the customer shall be assigned on the following basis:

Low Risk

Individuals (other than High Net Worth) and entities whose identities and sources of wealth can be easily

identified and transactions in whose accounts by and large conform to the known profile may be

categorized as low risk. The illustrative examples of low risk customers could be salaried employees

whose salary structures and well defined, people belonging to lower economic strata of the society whose

accounts show small balances and low turnover, Government Departments and Government owned

companies, regulators and statutory bodies etc. In such cases, only the basic requirements of verifying the

identity and location of the customer shall be met.

Medium Risk

Customers that are likely to pose a higher than average risk to the broker may be categorized as medium of

high risk depending on customer’s back ground, nature and location of activity, country of origin, sources of

funds and his client profile etc; such as

Persons in business/industry or trading activity where the area of his residence or place of business has a

scope or history of unlawful trading/business activity.

Where the client profile of the person/s opening the account, according to the perception of the branch is

uncertain and/or doubtful/dubious.

High Risk

The dealers may apply enhanced due diligence measures based on the risk assessment, thereby

requiring intensive ‘due diligence’ for higher risk customers, especially those for whom the sources fo funds

are not clear. The examples of customers requiring higher due diligence may include

a) Non Resident Customers

FOR NSE, BSE & CDSL

POLICIES & PROCEDURES ADOPTED FOR PREVENTION OF MONEY LAUNDERING

(Issued as per the requirements of PMLA Act 2002)

Part A - Mandatory 44

b) High Net worth individuals

c) Trusts, charities, NGOs and organizations receiving donations,

d) Companies having close family shareholding or beneficial ownership

e) Firms with ‘sleeping partners’

f) Politically Exposed Persons (PEPs) of foreign origin

g) Non-face to face customers, and

h) Those with dubious reputation as per public information available, etc.

Very High Risk - PEP

Politically Exposed Persons (PEPs)

Clients of special category (CSC) governent 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.

i) Non face-to-face clients

j. Clients with dubious reputation as per public information available etc.

·The above-mentioned list is only illustrative and we have to exercise independent judgment to

ascertain whether new clients should be classified as CSC or not.

·The dealers shall collect documents and other information from the customer depending on perceived

risk and keeping in mind the requirements of AML, Act, 2002 and guidelines issued by RBI from time to

time.

·The dealers shall close an existing account or shall not open a new account where it is unable to apply

appropriate customer due diligence measures i.e., branch is unable to verify the identity and/or obtain

documents required as per the risk categorization due to non cooperation of the customer or non

reliability of data/information furnished to the branch. The dealers shall, however, ensure that these

measures do not lead to the harassment of the customer. However, in case the account is required to

be closed on this ground, the dealers shall do so only after permission of Senior Official of their

concerned Offices is obtained. Further, the customer should be given a prior notice of at least 20 days

wherein reasons for closure of his account should also be mentioned.

·The dealers shall make necessary check before opening a new account so as to ensure that the

identity of the customer does not match with any person with known criminal background or with

banned entities notified by the Government of India so that brokers exercise caution against any

transaction detected with such entities. The dealers shall invariably consult such lists to ensure that

prospective person/s or organizations desirous to establish relationship with the broker are not in any

way involved in any unlawful activity and that they do not appear in such lists.

·The dealers shall prepare a profile for each new customer based on risk categorization. The broker

has devised a revised Composite Account Opening Form for recording and maintaining the profile of

each new customer. Revised from is separate for Individuals, Partnership Firms, Corporate and other

legal entities, etc. The dealers should bear in mind that the adoption of customer acceptance policy

and its implementation does not become too restrictive and should not result in denial of brokering

services to general public, especially to those, who are financially or socially disadvantaged.

Customer Identification Procedure (CIP)

The following table will be referred for customer identification and verification procedure:

Client’s Constitution Proof of identity Proof of Address Others

Individual 1. Pan Card 2. Copy of bank 3. N.A.

Statement etc.

Company 4. Pan Card 8.As Above 9. Proof of Identity of

5. Certificate of Incorporation Directors/others

6. Memorandum & Articles authorized to trade

7. Board Resolution

Partnership Firm 10. Pan Card 13. As above 14. Proof of Identity of

11. Registration certificate partners/others

authorized

Part A - Mandatory 45

·All Pan cards to be verified from Income Tax/NSDL sites before the account is opened

·If a potential customer refuses to provide the above details or willfully provides misleading details, then

our firm will not open the trading account.

·Client records will be maintained for 10 years after closure of Trading account of any client

Reluctance on the part of the client to provide necessary information or cooperate in verification

process could generate a red flag for member for additional monitoring.

4. Record maintenance: Record keeping/ Retention of records/Freezing of Records

The principal officer should maintain such records that are 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.

Should there be any suspected drug related or other laundered money or terrorist property, the competent

investigating authorities would need to trace through the audit trail for reconstructing a financial profile of

the suspect account. To enable this reconstruction, registered intermediaries should retain the following

information for the account;

(a) the beneficial owner of the account;

(b) the volume of the funds flowing through the account; and

(c) 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.

Registered Intermediaries should ensure that all customer 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. customer 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, all the intermediaries shall put in place a system of maintaining proper record of

transaction 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 transaction 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 then lakh;

(iii) All cash transactions where forged of 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.

Intermediates are required 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.

5. Retention of Records

Intermediaries 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

Part A - Mandatory 46

between the client and intermediary.

As stated in para 5.5, intermediaries are required to formulate and implement the client identification

program containing the requirements as laid down in Rule 9 and such other additional requirement that it

considers appropriate. The records of the identity of clients have to be maintained and preserved for a

period of ten years fro the date of cesation of the transactions between the client and intermediary.

Thus the following document retention terms should be observed:

(a) 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.

(b) Records on customer identification (e.g. copies or records of official identification documents like

passports

··

·

···

A list of circumstances, which may be in the nature of suspicious transactions, is given below, This list is

only illustrative whether a particular transaction is suspicious of not will depend upon the background,

details of the transactions and other facts and circumstances:

i) Clients whose identity verification seems difficult or clients appear not to cooperat

ii) Substantial increase inactivity without any apparent cause

iii) Large number of accounts having common parameters such as common partners / directors /

promoters / address / email address / telephone numbers / introducers of authorized signatories;

iv) Transactions with no apparent economic or business rationale

v) Sudden activity in dormant accounts;

vi) Source of funds are doubtful or inconsistency in payment pattern;

vii) Unusual and large cash deposits made by an individual or business;

viii) Transfer of investment proceeds to apparently unrelated third parties;

ix) Multiple transactions of value just below the threshold limit specified in PMLA so as to avoid possible

reporting;

x) Unusual transactions by CSCs and businesses undertaken by shell corporations, offshore banks /

financial services, businesses reported to be in the nature of export-import of small items.;

xi) Asset management services for clients where the source of the funds is not clear or not in keeping

with clients apparent standing / business activity;

xii) Clients in high-risk jurisdictions or clients introduced by banks or affiliates or other clients based in

high risk jurisdictions;

xiii) Clients transferring large sums of money to or from overseas locations with instructions for payment

in cash;

xiv) Purchases made on own account transferred to a third party through off market transactions through

DP Accounts;

xv) Suspicious off market transaction;

xvi) Large deals at prices away from the market.

xvii) Accounts used as ‘pass through’ Where no transfer of ownership of securities of trading is occurring

in the account and the account is being used only for funds transfers / layering purposes.

xviii) Trading activity in accounts of high risk clients based on their profile, business pattern and industry

segment.

Broad categories for reason of suspicion are given below:

Suspicious criminal background of the client

Multiple accounts having common account holder or introducer or authorized signatory with no

rationale

Unusual activity in dormant accounts or in aberration to past activities

Source of funds are doubtful

Appears to be case of insider trading

Suspicious off-market transactions

Value of transaction being inconsistent to client’s financial standing

Part A - Mandatory 47

6. Reporting of Suspicious Transactions to FIU IND

Processes for alert generation, examination and reporting should include

Audit trail for all alerts generated till they are reported to FIU / closed

Clear enunciation of responsibilities at each stage of process from generation, examination, recording

and reporting

Escalation through the organization to the principal officer designated for PMLA

Confidentiality of STRs filed

Retention of records

All cash transaction requiring reporting will be done in CTR format and in the manner and at intervals

prescribed by FIU IND.

We will make a note of all transactions that have not been explained to the satisfaction of our principal

officer and thereafter report the same to FIU IND.

Wherever we have reason to suspect any criminal activity, illegal activity, activity involving evasion of

PMLA regulations and unlawful business activity, then the same would be tracked and reported promptly.

As and when any suspicious transactions or any transaction whether within the permissible regulation

limits but constituting an anomaly would be tracked and reported to FIU/BSE/SEBI/CDSL or concerned

regulatory bodies.

For CDSL- “ Blng024900_fui” file should be monitored for abnormal DP transactions on fortnightly basis or

as and when received from CDSL. Any aberrations should be noted. Possibility of fraudulent or suspicious

trades should be traced, inquired for and then reported to the concerned authority.

9. Audit/Testing of Anti Money Laundering Program.

The Anti Money Laundering program will be subjected to periodic audit specifically with regard to testing its

adequacy to meet the compliance requirements. An internal auditor or any qualified professional will do the

audit/testing. The report of such an audit/testing should be placed before the senior management for

making suitable modifications/improvements in the AML program.

10. Employee conduct and Accounts

Employees conduct and accounts would be subjected to scrutiny under the principal officer. Supervisors

··

·

·

7. AML Record keeping

i. STR Maintenance and confidentiality

Confidentiality of STRs and other supporting documents will be maintained. Only law enforcement or

regulatory authorities need be informed about it. Any request for STR information would not be entertained

and request will be informed to FIU IND immediately. Separate filing for STRs will be maintained. Principal

Officer will handle all requests related to it.

ii. Responsibility for AML records and SAR filing

Principal Officer will be in charge of record keeping of STRs.

iii. Records required

As part of our AML program, our firm will create and maintain STRs and CTRs and other relevant

documentation about customer identity/verification. Such records will be maintained for at least ten years.

8. On going training to Employees:

Principal Officer would be responsible to impart necessary training to employees. Employees will be

sensitized of the requirements under PMLA and the procedures laid down by the member. It will be ensured

that all the operating and management staff fully understands their responsibilities under PMLA for strict

adherence to customer due diligence requirements from establishment of new accounts to transaction

monitoring and reporting suspicious transactions to the FIU. Annually, training programmes would be

imparted wherever required for new staff, front-line staff, sub-brokers, supervisory staff, controllers and

product planning personnel, etc. Training may include written materials like pamphlets, audio/video Cds,

in-person lectures and professional seminars. Employees of the compliance department should be asked

to attend BSE/NSE/CDSL Compliance training program.

Part A - Mandatory 48

and managers performance will be annually reviewed. In turn, principal officer’s accounts and

performance will be reviewed by Board of directors.

11. Confidential reporting of AML non-compliance

Any violation of firm’s AML program should be reported to the principal officer, unless the violation

implicates Principal Officer himself, in that case, the report should be forwarded to chairman of the board.

Reports should be confidential and employee will face no retaliation for doing so.

12. Board of Directors Approval:

We have approved this AML program as reasonably designed to achieve and monitor our firm’s ongoing

compliance with the requirements of PMLA and the implementing regulations under it.

Client Signature : _____________________________________

Type of Client Low Risk Medium Risk High Risk PEP (Politically CSC (Client of

(Please Tick) Exposed person) Special Category)

Risk rating would change only if there is change in risk perception by us.

For K. M. Jain Stock Brokers Pvt. Ltd.

Director / Authorised Signatory

RISK ASSESSMENT OF CLIENT IN TERMS OF PMLA 2002

To,

K.M.Jain Stock Brokers Private Limited

814, P.J.Towers, Dalal Street, Mumbai. 400001.

Sir,

Sub: Acknowledgment of receipt of KYC documents copy

I/We hereby confirm the receipt of copy of KYC form along with Member- Client Agreement and other

enclosures for my perusal.

Yours truly,

Client's name : _______________________ Signature : _______________________

Date : _______________________

ACKNOWLEDGEMENT

To,

Client Name :_________________________________

Address : _________________________________

_________________________________

_________________________________

Sir,

Sub: Trading Account & UCC

We are pleased to register you as our client for trading in the following segments:

Capital market BSE: ___________

Derivatives F&O BSE: ___________

Capital market NSE: ___________

Derivatives F&O NSE: ___________

Your 'Unique Client Code' allotted in our back office system that will be applicable across all segments is:

(UCC) Unique Client Code: ___________________________

Please mention your UCC to get your trades executed through our dealer.

(Our dealer contact numbers: ______________________________________________________)

Clients holding DMAT accounts outside our in-house DP - K.M.Jain Stock Brokers Pvt Ltd, need to transfer

their shares for securities pay-in obligation in the following DP accounts after trade execution.

BSE - NSDL POOL CMBP ID A/C # In603527 NSE - NSDL POOL CMBP ID A/C # IN512913

BSE- CDSL PRINCIPAL A/C # 1202490000000179 NSE - CDSL POOL A/C # 1202490000003317

To check the status of your account online, please log on to our website - www.kmjpl.com

For any other information please get in touch with our nearest office where you had opened your trading

Account.

Happy Trading with us!

Best Wishes,

For K.M.Jain Stock Brokers Pvt Ltd

Authorized signatory

Date :

Place :

Part A - Mandatory 49

ANNEXURE – 1 , 5

POLICIES AND PROCEDURES FOR CLIENT DEALINGS – ALL EXCHANGES - MANDATORY

( as required by SEBI circular MIRSD/ SE /Cir-19/2009 dated December 3, 2009

Policy 1. refusal of orders for penny stocks

A penny stock can be typified as one which has one or more of the given below characteristics:

·         Stock that trades at a relatively low price and /or market capitalization

·         Highly speculative and risky because of lack of liquidity

·         Large bid-ask spreads

·         Showing sporadic volume pattern in tandem with bulk trades

·         Association with errant promoters and/or classified under Z or T group by exchanges

Our RMS reserves the “right to refusal” to trade in such stocks and consequently all losses pertaining to it would be borne by the client. Such a decision would emanate after considering above-mentioned points. The client should also be ready to pay 100% margin pertaining to the scrip, if need be.   

Policy 2. setting up client’s exposure limit

Our RMS refers the following points before giving exposure to our clients, which in turn can vary from time to time in view of the then prevailing circumstances:

·         Client’s net worth

·         Collateral or deposits taken from the client

·         Existing open positions of client and the various margin obligations

·         Broker’s risk perception of the client

·         Prevailing market volatility

·         The benefit of ‘credit for sale of shares’ is to be considered while evaluating the exposure of a client.

·         In case of F&O trading, collateral received after the trading day in ‘client’s margin account’ will not be considered for margin and exposure calculation.

·         Scrip wise exposure can vary depending upon the group to which the scrip belongs. A client is liable to get less exposure for scrip under ‘Z’ & ‘T’ groups, as the broker has to keep in mind the total turnover of the scrip, liquidity during the day, per day limits for a particular Group (e.g. T, Z groups) set by Exchanges or any such reasons after referring the daily notices of Exchanges & SEBI.

·         Any other relevant factor.

The client has to agree to exposure/margin variation, reduction, imposition and restrictions that can affect his ability to execute the orders solely as per his wish. Further the client has to agree that the losses if any on account of such refusal or due to delay caused by periodic reviews or interventions shall be borne exclusively by the client alone.

Policy 3. applicable brokerage rate

·         Brokerage rates will be charged within the limits prescribed by SEBI/Exchange- ie. Not more than 2.5% on market rate

·         At the time of opening of client‘s account the brokerage rates will be assigned in consultation with the client/sub-broker. Any change intended by either broker or client will be done after mutual discussion thereof. The client should sign on the tariff sheet and should convey any deviation within seven days of signing the sheet.

·         For option contracts brokerage will be charged on the premium at which the option contract was bought or sold and not on the strike price of the option contract.

Policy 4. imposition of penalty/delayed payment charges by either party, specifying the rate and the period not resulting in funding by the broker in contravention of the applicable laws

·         Where the Broker has to bear or pay any fines/penalties/punishment from any of the authorities like SEBI/RBI/Exchanges/Banks etc in connection with/as a consequence of/in relation to any of the orders /trades/deals/actions of the client, then the same will be borne by the client.

·         All penalties due to client’s negligence, what-so-ever it may be, pertaining to their trading account should be borne by Client

Policy 5. 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 (Limited to the extent of settlement/margin obligation)

·         Without prejudice to the stock broker other rights including the right to refer the matter to arbitration), the stock broker shall be entitled to liquidate /close out all or any of the client’s position without giving notice to the client for non payment of margins or other amounts including the pay-in obligation, outstanding debts etc and adjust the proceeds of such liquidation/close out, if any against the client’s liabilities/obligations.

·         The client shall ensure timely availability of fund/securities in the form and manner at designated time and in designated bank and depository account(s), for meeting his/her/its pay-in obligation of fund and securities. All losses on account of non-compliance of exchange obligation shall be borne by the client. Any available security/collateral would be subject haircuts/MTM as the stockbroker may deem fit in his absolute discretion.

·         The stockbrokers has the right but not the obligation, to cancel all pending orders and to sell /close/liquidate all open positions/securities/shares at the predefined square off time or when MTM percentage reaches or crosses stipulated margin percentage, whichever is earlier. The stockbroker will have the sole discretion to decide referred stipulated margin percentage depending upon the market condition. In the event of such square-off, the client agrees to bear all the losses based on actual executed prices, the client shall also be solely liable for all and any penalties and charges levied by the exchange.

·         On the explicit directions of Exchanges/ SEBI or any government authority, the broker can freeze or resort to squaring off the position of client. In such cases all losses shall be borne by the client.

·        Normally, a client who has outstanding debit balance for more than three months/six months( as will be decided by management) can be asked to make good the expenses of all kind, including TOD/OD interest charges that the broker had to bear due to his inability to clear his dues.

Policy 6. shortages in obligations arising out of internal netting of trades

·         Stock broker shall not be entitled to deliver any securities or pay any money to the client until and unless the same has been received from the Exchange/Clearing House/ Clearing Corporation or any other authorized entity provide the client has fulfilled his obligations first.

·         Internal shortage of securities due for some corporate action/or cum-benefit securities that cannot be auctioned/ or the pay-out of cum-benefit securities is after the book closure or record date, then such a situation would compulsorily attract a close out 10% above the higher of: standard closing rate on the auction day or the highest traded price of the scrip starting from the trading day till the corresponding auction day.

·         BSE- In case of BSE we always opt for the procedure of “internal auction” available with the exchange. If due to any reason the same could not be done then the broker will opt to close out the position considering the higher of the following rate- a) Trading day standard rate or b) highest auction rate corresponding to the requisite settlement day.

·         NSE- The clients will be debited and credited considering the higher of the following rate- a) Trading day standard rate or b) highest auction rate corresponding to the requisite settlement day.

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

The above condition applies in the following cases:

·         When the gross exposure/collateral set for the client gets exhausted.

·         The existing position of the client is also liable to be squared up when the client fails to provide extra margin or fails to fulfill his obligations even upon being intimated.

·         Due to non-receipt or non-fulfillment of money and/or delivery pay-in & payout obligation by the client incase of cash segment.

·         Due to non-receipt or non-fulfillment of money pay-in obligation by the client as required by exchanges in F&O segment.

·         In extraordinary circumstances whence the Broker is advised by the Exchange to reduce exposure to facilitate smooth working of the Exchange.

·         In view of the high volatility of market

Policy 8. temporarily suspending or closing a client’s account at the client’s request

·         Temporarily suspending of account- the client’s account can be temporarily suspended provided the client gives in writing to do so. It can be re-activated on receipt of written instruction from the client. However clients’ share/ledger settlement would be allowable.

·         Closure of client’s account- A client’s account can be closed if a written request is received for the same provided all accounts across all segments are settled in terms money and delivery of shares.

Policy 9. deregistering a client

Notwithstanding anything contrary stated in the agreement, the stock broker shall be entitled to terminate the agreement in any of the following circumstances:

1) Incase of death/lunacy or any other disability of the client

2) Incase of breach of any term, condition or covenant of this agreement

3) Incase the client has made material misrepresentation in the facts disclosed in his KYC

4) If there is commencement of any legal proceedings against the client under any law in force.

5) If the action of the client are prima-facie illegal/improper or one that points to price manipulation or that disturbs the normal functioning capital market, whether alone or in conjunction with others. 

6) In case the client defaults in fulfillment of his exchange related obligations

7) Incase of dissolution of partnership firm and the partnership firm or any of its partner being the client of the broker.

8)  If the client has voluntarily or compulsorily become the subject of proceedings under any bankruptcy or insolvency law or being a company, goes into liquidation or has a receiver appointed in respect of its assets or refers itself to BIFR or under any other law providing protection as a relief undertaking.

9) If any covenant or warranty of the client is incorrect or untrue in any material respect.

10) If there is reasonable apprehension that the client would be unable to pay its debts or the client has admitted its inability to pay its debt as and when they become payable.

11) If a receiver, administrator or liquidator has been appointed or allowed to be appointed for all or any part of the undertaking of the client.

12) If there is reasonable apprehension about the clients’ solvency or ability to fulfill his obligations.

Policy 10. policy regarding treatment of inactive client

As per the exchange rules, any client who does not have any single trade during a financial year is considered as an “in-active client”.

We will typify a client as “inactive” after considering the following aspects:

1. Whether there exists any trade in his ledger account whose obligation has been fulfilled through the exchange trading platform?

2. Whether the client is active in any other segment?

3. Whether the client has any debits or credits lying in any of his ledger account, in any of the segments?

4. Whether the client is trying to settle his dues, though he is an inactive trader? ie. Only banking transactions appear in his ledger account?

5. Whether the client is inactive due to change of his residential location to a remote area or foreign country and has intimated his wish to remain dormant temporarily?

After considering the above points, we would consider whether the client trading and/or demat account needs to be closed permanently or not. Having typified the client as ‘inactive’, we would proceed to intimate him about the same.

Normally only after three years of inactivity, we would tag the client as ‘inactive’ in BSE/NSE online database.

Policy 11. policy on cash/bank contra A/c

To facilitate pay-in/ pay-out obligations among various segments namely ‘BSE , NSE & NSE F&O ‘ , we move funds from one segment to another in the form of contra entry, subject to the following points:

1. Fund to be moved when a client has credit lying in one segment and pay-out/credit in another segment.

2. To bring about agility in the system and avoid delays

3. To avoid the inconvenience of taking cheque in one segment and delivering in another.

4. And, above all to ensure smooth process of fulfilment of market obligations.

Policy 12. Client code modification Policy

We intend to adhere to the new SEBI directive on ‘UCC changes and its implications’. The following steps taken in that regard are:

1. All terminal IDs of BSE & NSE will remain locked for any UCC change.

2. We will not allow any back-office UCC modification.

3. For unforeseen genuine errors during trading session- the particular ID would be activated for modification only for 2 minutes through ADMIN terminal. In case of BSE, the reason for change would be submitted at the end of the day through BEFS site provided by exchange.

4. ‘ERROR’ code would be created in UCC site of both BSE & NSE, which will incorporate similar details of OWN/PRO details including PAN number. The wrong code trades can be transferred to the ERROR code and further transferred to the correct code thereby squaring up the transaction in ERROR code. By doing so, we can avoid penalty, provided the ERROR code is squared up the same day. The difference would be borne by the wrongdoer.

4. Institutional to Institutional trades can be modified without attracting penalty.

Code Modification Summary

Policy 13. Investor grievances policy

All investors are free to communicate their grievances through our dedicated investor grievances email id: grievances@ kmjpl.com or through our investor grievances register kept in all our offices at convenient accessible place. Investors will be assured prompt reply and resolution to their grievances. The process for prompt redressel would entail the following steps:

·         Nature of grievance- whether monetary, documentary requirement or otherwise

·         If monetary- then the cause and the veracity needs to be established. If the veracity is established by our back office then the client can expect quick dissipation. If veracity is denied by our back office, then the client would be duly informed with facts and figures.

·         If non-receipt of a document- then the back office manager would ensure that the documents are despatched immediately or a duplicate copy is forwarded to the client.

·         Other grievances- solution to be decided only after collating the details.

14.Policy for unauthentic news in circulation

Our company discourages circulation of unauthentic news and hearsays through emails, sms or printed material. All research news is handled only by our sole research department active in our Mumbai head office. Any news not bearing our research department approval shall have no bearing and may be considered false. All the printed material emanating from our research department, in Mumbai Head office will always be based on facts and /or permissible scientific assumptions.

15.Policy for trading in illiquid stocks

An illiquid stock can be typified as one which has almost all the given below characteristics:

·         Highly speculative and risky because of lack of liquidity

·         Large bid-ask spreads

·         Showing sporadic volume patterns

·         Periodically classified by Exchanges in their list of –‘illiquid securities’

Our RMS reserves the “right to refusal” to trade in such stocks and consequently all losses pertaining to it would be borne by the client. The client should also be ready to pay 100% margin pertaining to the scrip, if need be.   

These policies have been adopted by the trading member as on 1.04.2010 and may have been revised over time. Latest version of the policy is available at the trading members’ website www.kmjpl.com.

Signature of the Client

Place

Date

RISK MANAGEMENT SYSTEM

The following process should be followed for risk management:

·         Identifying risk

·         Deciding how much credit should be given to each client

·         Deciding the frequency of collection of margins

·         Deciding how much risk is acceptable

·         Controlling risk on continuous basis

·         Monitoring risk taken on continuous basis

INTERNAL CONTROLS FOR RISK MANAGEMENT

1.       Registration of clients: KYC forms should be taken from all the clients.  KYC forms should carry comprehensive details of all the clients.  Client consent and/or intimation as required under compliance rules should also be included in the form. It should be seen that the client adheres to all the required compliances of regulatory bodies

2.       Receiving, validating and entering orders of clients in the trading platform: orders are taken and executed by certified users only.

3.       Collection and release of payments to clients: Upfront margin is taken form all the clients and them at the end of the day margins- both Exposure and MTM is collected from clients on daily basis and reported to the exchange.

4.       Collection and maintenance of margins: as above

5.       Collection and delivery of securities to the clients: We intend to open a separate Dmat A/C for keeping securities of our clients. All securities to be pledged to the exchange would be picked up from the Dmat a/c. Clients’ securities would be released only on verification of client’s position as regards to their open positions.

6.       Monitoring of branches/sub-brokers: all the activity would be monitored from the Admin terminal and limits would be assigned to all the branches and/or sub-brokers according to margins received from them.

7.       Operations and compliance: the appointed compliance officer takes care of all the compliance requirements and all necessary formalities are adhered to.

8.       Payment of dividend: Clients bank A/C would be assigned to the Dmat a/c of clients that would be opened and all dividends received on clients securities would be credited to clients a/c on verification of their holding as on RD.

9.       Continuity planning/alternate plan in case of disasters: back up is taken and kept separately in other place different from the place of trading.

10.   On-line surveillance of trades should be done from admin terminals to detect abnormal trades and aberrations.

11.   Proper back up of all records should be taken and kept separately at a different place other than the back-office.

All other requirements and need are taken care of by compliance officer as and when the need arises.

ANNEXURE -  8

FOR NSE, BSE & CDSL

POLICIES & PROCEDURES ADOPTED FOR PREVENTION OF MONEY LAUNDERING

(Issued as per the requirements of PMLA Act 2002)

1. Objective & Policy: Primary objective of our firm would be ‘Prevention of money laundering through designated brokers, intentionally or unintentionally by criminal elements’. It is the policy of our firm to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities.

2. Principal Officer appointment & duties: Our firm has designated Mr. Anand Jain as the principal officer and intimated the authority vide letter dtd. 31.01.07, thereby complying with the procedure of designating a sufficiently senior person as ‘Principal Officer’ as required under the Prevention of Money Laundering Act. The principal officer will promptly notify Financial Intelligence Unit (FIU) of any change to the details of our firm. The principal officer will also ensure maintenance of proper records and filing of records with FIU, whenever required.

3. Know Your Customer Standards: Our KYC policy incorporates the following four elements:

• Customer Acceptance Policy (CAP)
• Customer Identification Procedures (CIP)
• Monitoring of Transactions; and
• Risk Management

Customer Acceptance Policy (CAP)

The following points are kept in mind before accepting the KYC form of a probable client

·         No account shall be opened in anonymous or fictitious/benami name(s)

·         Parameters of risk perception shall be clearly defined in terms of the nature of business activity, location of customer and his clients, mode of payments, volume of turnover, social and financial status etc., to enable categorization of customers into low, medium and high risk; Customers requiring veryhigh level of monitoring e.g., Politically Exposed Persons (PEPs) may be categorized under Very High Risk.

The risk to the customer shall be assigned on the following basis:

Low Risk

Individuals (other than High Net Worth) and entities whose identities and sources of wealth can be easily identified and transactions in whose accounts by and large conform to the known profile may be categorized as low risk. The illustrative examples of low risk customers could be salaried employees whose salary structures are well defined, people belonging to lower economic strata of the society whose accounts show small balances and low turnover, Government Departments and Government owned companies, regulators and statutory bodies etc. In such cases, only the basic requirements of verifying the identity and location of the customer shall be met.

Medium Risk

Customers that are likely to pose a higher than average risk to the broker may be categorized as medium or high risk depending on customer’s background, nature and location of activity, country of origin, sources of funds and his client profile etc; such as

·         Persons in business/industry or trading activity where the area of his residence or place of business has a scope or history of unlawful trading/business activity.

·         Where the client profile of the person/s opening the account, according to the perception of the branch is uncertain and/or doubtful/dubious.

High Risk

The dealers may apply enhanced due diligence measures based on the risk assessment, thereby requiring intensive ‘due diligence’ for higher risk customers, especially those for whom the sources of funds are not clear. The examples of customers requiring higher due diligence may include

a) Non Resident Customers,

b) High Net worth individuals

c) Trusts, charities, NGOs and organizations receiving donations,

d) Companies having close family shareholding or beneficial ownership

e) Firms with ‘sleeping partners’

f) Politically Exposed Persons (PEPs) of foreign origin

g) Non-face to face customers, and

h) Those with dubious reputation as per public information available, etc.

Very High Risk- PEP

Politically Exposed Persons (PEPs)

Clients of special category (CSC)

Such clients include the following 

a.  Non resident clients 

b.  High net worth clients 

c.  Trust, Charities, NGOs and organizations receiving donations 

d.  Companies having close family shareholdings or beneficial ownership 

e.  Politically exposed persons (PEP) of foreign origin 

f.  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)

g. Companies offering foreign exchange offerings 

h. 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 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.

i.    Non face-to-face clients 

j.    Clients with dubious reputation as per public information available etc.

 The above-mentioned list is only illustrative and we have to exercise independent judgment to ascertain whether new clients should be classified as CSC or not. 

·         The dealers shall collect documents and other information from the customer depending on perceived risk and keeping in mind the requirements of AML Act, 2002 and guidelines issued by RBI from time to time.

·         The dealers shall close an existing account or shall not open a new account where it is unable to apply appropriate customer due diligence measures i.e., branch is unable to verify the identity and/or obtain documents required as per the risk categorization due to non cooperation of the customer or non reliability of data/information furnished to the branch. The dealers shall, however, ensure that these measures do not lead to the harassment of the customer. However, in case the account is required to be closed on this ground, the dealers shall do so only after permission of Senior Official of their concerned Offices is obtained. Further, the customer should be given a prior notice of at least 20 days wherein reasons for closure of his account should also be mentioned.

·         The dealers shall make necessary checks before opening a new account so as to ensure that the identity of the customer does not match with any person with known criminal background or with banned entities such as individual terrorists or terrorist organizations etc. RBI has been circulating lists of terrorist entities notified by the Government of India so that brokers exercise caution against any transaction detected with such entities. The dealers shall invariably consult such lists to ensure that prospective person/s or organizations desirous to establish relationship with the broker are not in any way involved in any unlawful activity and that they do not appear in such lists.

·         The dealers shall prepare a profile for each new customer based on risk categorization. The broker has devised a revised Composite Account Opening Form for recording and maintaining the profile of each new customer. Revised form is separate for Individuals, Partnership Firms, Corporate and other legal entities, etc. The nature and extent of due diligence shall depend on the risk perceived by the dealer. The dealers should continue to follow strictly the instructions issued by the broker regarding secrecy of customer information. The dealers should bear in mind that the adoption of customer acceptance policy and its implementation does not become too restrictive and should not result in denial of brokering services to general public, especially to those, who are financially or socially disadvantaged.

Customer Identification Procedure (CIP)

The following table will be referred for customer identification and verification procedure:

Notes:

·         All Pan cards to be verified from Income Tax/ NSDL sites before the account is opened

·         If a potential customer refuses to provide the above details or willfully provides misleading details, then our firm will not open the trading account.

·         Client records will be maintained for 10 years after closure of Trading account of any client

·         Reluctance on the part of the client to provide necessary information or cooperate in verification process could generate a red flag for the member for additional monitoring.

4. Record maintenance: Record keeping/ Retention of records/Freezing of Records

The principal officer should maintain such records that are 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.

Should there be any suspected drug related or other laundered money or terrorist property, the competent investigating authorities would need to trace through the audit trail for reconstructing a financial profile of the suspect account. To enable this reconstruction, registered intermediaries should retain the following information for the accounts of their customers 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

(c) 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.

Registered Intermediaries should ensure that all customer 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. customer 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, all the intermediaries 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.

Intermediaries are required 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

Intermediaries 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 intermediary.

As stated in para 5.5,  intermediaries are 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 intermediary.

Thus the following document retention terms should be observed:

(a) 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.

(b) Records on customer 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.

5.Monitoring & Reporting of Suspicious Transactions:

Ongoing monitoring of accounts is an essential element of an effective Anti Money Laundering framework.  Such monitoring should result in identification and detection of apparently abnormal transactions, based on laid down parameters. Members should devise and generate necessary reports/alerts based on their clients profile, nature of business, trading pattern of clients for identifying and detecting such transactions. These reports/alerts should be analyzed to establish suspicion or otherwise for the purpose of reporting such transactions.

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: 

i)        Clients whose identity verification seems difficult or clients appear not to cooperate 

ii)       Substantial increase in activity without any apparent cause 

iii)     Large number of accounts having common parameters such as common partners / directors / promoters / address / email address / telephone numbers / introducers or authorized signatories; 

iv) Transactions with no apparent economic or business rationale 

v)  Sudden activity in dormant accounts; 

vi) Source of funds are doubtful or inconsistency in payment pattern; 

vii)Unusual and large cash deposits made by an individual or business; 

viii)Transfer of investment proceeds to apparently unrelated third parties; 

ix) Multiple transactions of value just below the threshold limit specified in PMLA so as to avoid possible reporting; 

x)  Unusual transactions by CSCs and businesses undertaken by shell corporations, offshore banks /financial services, businesses reported to be in the nature of export-import of small items.;

xi) Asset management services for clients where the source of the funds is not clear or not in keeping with clients apparent standing /business activity; 

xii)Clients in high-risk jurisdictions or clients introduced by banks or affiliates or other clients based in high risk jurisdictions; 

xiii)Clients transferring large sums of money to or from overseas locations with instructions for payment in cash; 

xiv) Purchases made on own account transferred to a third party through off market transactions through DP Accounts; 

xv) Suspicious off market transactions; 

xvi)Large deals at prices away from the market. 

xvii) Accounts used as ‘pass through’. Where no transfer of ownership of securities or trading is occurring in the account and the account is being used only for funds transfers/layering purposes. 

xviii)Trading activity in accounts of high risk clients based on their profile, business pattern and industry segment.

 Broad categories for reason of suspicion are given below:

• Suspicious criminal background of the client
• Multiple accounts having coomon account holder or introducer or authorized signatory with no rationale
• Unusual activity in dormant accounts or in aberration to past activities
• Source of funds are doubtful
• Appears to be case of insider trading
• Suspicious off-market transactions
• Value of transaction being inconsistent to client’s financial standing

6. Reporting of Suspicious Transactions to FIU IND

Processes for alert generation, examination and reporting should include 

• Audit trail for all alerts generated till they are reported to FIU / closed
• Clear enunciation of responsibilities at each stage of process from generation, examination, recording and reporting
• Escalation through the organization to the principal officer designated for PMLA
• Confidentiality of STRs filed
• Retention of records

All cash transaction requiring reporting will be done in CTR format and in the manner and at intervals prescribed by FIU IND.

We will make a note of all transactions that have not been explained to the satisfaction of our principal officer and thereafter report the same to FIU IND.

Wherever we have reason to suspect any criminal activity, illegal activity, activity involving evasion of PMLA regulations and unlawful business activity, then the same would be tracked and reported promptly.

 As and when any suspicious transactions or any transaction whether within the permissible regulation limits but constituting an anomaly would be tracked and reported to FIU/BSE/SEBI/CDSL or concerned regulatory bodies.

For CDSL-“Blng024900_fui” file should be monitored for abnormal DP transactions on fortnightly basis or as and when received from CDSL. Any aberrations should be noted. Possibility of fraudulent or suspicious trades should be traced, inquired for and then reported to the concerned authority.

7. AML Record keeping

i. STR Maintenance and confidentiality

Confidentiality of STRs and other supporting documents will be maintained. Only law enforcement or regulatory authorities need be informed about it. Any request for STR information would not be entertained and request will be informed to FIU IND immediately. Separate filing for STRs will be maintained. Principal Officer will handle all requests related to it.

ii. Responsibility for AML records and SAR filing

Principal Officer will be in charge of record keeping of STRs.

iii. Records required

As part of our AML program, our firm will create and maintain STRs and CTRs and other relevant documentation about customer identity/verification. Such records will be maintained for at least ten years.

8. On going training to Employees:

Principal Officer would be responsible to impart necessary training to employees. Employees will be sensitized of the requirements under PMLA and the procedures laid down by the member. It will be ensured that all the operating and management staff fully understands their responsibilities under PMLA for strict adherence to customer due diligence requirements from establishment of new accounts to transaction monitoring and reporting suspicious transactions to the FIU. Annually, training programmes would be imparted wherever required for new staff, front-line staff, sub-brokers, supervisory staff, controllers and product planning personnel, etc. Training may include written materials like pamphlets, audio/video Cds, in-person lectures and professional seminars. Employees of the compliance department should be asked to attend BSE/NSE/CDSL Compliance training program.

9. Audit/Testing of Anti Money Laundering Program.

The Anti Money Laundering program will be subjected to periodic audit specifically with regard to testing its adequacy to meet the compliance requirements. An internal auditor or any qualified professional will do the audit/testing. The report of such an audit/testing should be placed before the senior management for making suitable modifications/improvements in the AML program.

10. Employee conduct and Accounts

Employees conduct and accounts would be subjected to scrutiny under the principal officer. Supervisors and managers performance will be annually reviewed. In turn, principal officer’s accounts and performance will be reviewed by Board of directors.

11. Confidential reporting of AML non-compliance

Any violation of firm’s AML program should be reported to the principal officer, unless the violation implicates Principal Officer himself, in that case, the report should be forwarded to chairman of the board. Reports should be confidential and employee will face no retaliation for doing so.

12. Board of Directors Approval:

We have approved this AML program as reasonably designed to achieve and monitor our firm’s ongoing compliance with the requirements of PMLA and the implementing regulations under it.

Client Signature: ______________________

RISK ASSESSMENT OF CLIENT IN TERMS OF PMLA 2002

Risk rating would change only if there is change in risk perception by us.

For K.M.Jain Stock brokers Pvt Ltd

Director/ Authorised Signatory