Internal Policies

The Exchanges have issued guidance relating to Incentive / Referral Schemes. Sankalp Share Brokers Private Limited has framed the following internal policy regarding Referral Incentives.

Background & Relevant Act

This policy complies with the code of conduct prescribed for stock brokers under Regulation 9 of SEBI (Stock Brokers) Regulations, 1992 and all relevant bye-laws, rules and regulations of SEBI / Exchanges with respect to sharing of brokerage, account opening, inducement to trade, sales practices and order placement.

Eligibility

All known persons shall be eligible to receive incentives for referring their friends / relatives / family members / prospective clients to open a client account along with a demat account with Sankalp Share Brokers Private Limited.

Guidelines

1. All referred clients are required to open their Trading cum Demat Account directly with Sankalp Share Brokers Private Limited along with IPV / OSV done directly by the staff of the broking firm.
2. Referring persons are not allowed to undertake any advisory, buy-sell recommendations, or portfolio management to clients. Their role is limited to “Referral” only.
3. All order instructions must be given directly by clients to the staff of the broking firm.
4. All contract notes, daily margin statements, statements of account, annual global statements, STT statements or any correspondence must be sent directly to the clients.
5. All client details shall be maintained confidentially and shall not be disclosed to the referring person.
6. The rate of incentive is fixed at 65% of the total brokerage generated by the stock broking firm from the clients referred.
7. The incentive so paid shall not be recovered from the referred clients and no obligation whatsoever shall be cast on such clients.
8. There shall be no financial transactions between referred clients and referring persons in relation to the transactions undertaken with Sankalp Share Brokers Private Limited.
9. Sankalp Share Brokers Private Limited shall be directly and wholly liable in case of any dispute regarding the referral programme / incentive scheme.
10. The referring persons shall not be forbidden to do any business under the rules and regulations of exchanges / SEBI or any other regulatory authority.

Payout

The eligible referring persons are required to settle their incentives on a periodic basis. The incentive earned will be subject to provisions as per applicable law.

Limitations

1. The amount of incentive shall be calculated as per the calculations given above and in no circumstances shall exceed the maximum amount arrived at.
2. This policy needs to be approved by the Board of Sankalp Share Brokers Private Limited.
3. The policy needs to be reviewed at least once a year.

On the lines of Principle 8 of the IOSCO Objectives and Principles of Securities Regulations, Sankalp Share Brokers Private Limited has put in place comprehensive guidelines for elimination of conflicts of interest.

• We will at all times maintain high standards of integrity in the conduct of our business.
• We will ensure fair treatment of our clients and not discriminate amongst them.
• We will ensure that our personal interest does not, at any time, conflict with our duty to our clients.
• We will make appropriate disclosure to clients of possible sources or potential areas of conflict of interest.
• We will endeavour to reduce opportunities for conflict through prescriptive measures such as information barriers between departments.
• We will place appropriate restrictions on transactions in securities while handling a mandate of issuer or client in respect of such security.
• We will not deal in securities while in possession of material non-published information.
• We will not communicate material non-published information while dealing in securities on behalf of others.
• We will not in any way contribute to manipulate the demand for or supply of securities in the market or to influence prices of securities.
• We will not have an incentive structure that encourages sale of products not suiting the risk profile of our clients.
• We will not share information received from clients for our personal interest.
• There will be an educational programme for Associated Persons every six months for dealing with or avoiding or managing conflicts of interest.
• Our management shall review compliance with this circular every six months.

We, Sankalp Share Brokers Pvt. Ltd., have not outsourced any of our activities to third parties and hence we have not formed any guidelines on Outsourcing of Activities.

In view of SEBI Circular No. CIR/DNPD/6/2011 dated July 5, 2011, the company has formulated the following policy for client code modification to prevent malpractices that could manipulate the capital market.

1. Modification to the client code is to be done only in exceptional cases and not as a routine one.
2. The reason for modification has to be ascertained and analysed; genuineness is to be established and its impact on the clients studied before the modification.
3. As a principle, other than for punching errors, no modification to the client codes shall be allowed.
4. The issue should be reported to the senior level Manager / Director and only with their approval shall the modification be carried out after being satisfied that it is genuine and required to protect the interests of the client.
5. The facility to modify client codes shall be available only at the Corporate Manager level and shall not be given to branches / franchise / sub-brokers.
6. Training programmes shall be conducted for all Dealers explaining how code modifications can be misused and what steps should be taken to avoid the same.
7. Punching / typing errors are to be rectified on the Exchange platform as per SEBI / Exchange rules. Errors not assignable to any client should be transferred to the “ERROR” code, accountable in the books of the Member's own account.
8. A register is to be maintained for recording all code modifications with details including error code, correct code, scrip name, quantity, client name, dealer's name, dealer's explanation and the authorised Manager's analysis and approval/disapproval.
9. The final decision of the authorised Manager should be ratified later by the Director.
10. This policy should be reviewed and necessary changes made by the Directors at least once every financial year.

With reference to NSE Circular No. NSE/INSP/32524 dated 6 June 2016 and BSE Circular No. 20160607-04 dated 7 June 2016.

Definition

Facsimile Signature: Scanned signatures of an authorised person in physical documents, instead of actual signatures of the person, while maintaining the validity of the documents.

Authorised Signatory means any official including the director or compliance officer authorised by the board.

Policy Statement

Sankalp Share Brokers Private Limited sends Electronic Contract Notes to its clients. Clients who have opted for physical contract notes receive them with manual signatures from our authorised signatory.

Maintaining / adopting the facsimile signature policy is not applicable to us. We always strive for a green initiative and send Electronic Contract Notes.

Sankalp Share Brokers Pvt. Ltd. has set the following guidelines for employees and clients:

1. Exercise abundant caution while dealing in low-priced illiquid securities — do not allow large positions in such securities across all user IDs.
2. Ensure that any client taking a large position in any script is not an employee of the company or taking positions on behalf of a promoter / director of the company.
3. Routine enquiries conducted by the Exchange to track any insider trading must be complied with immediately by providing all required details.
4. If any instance of insider trading is observed by the Compliance Officer, SEBI shall be informed by the firm without delay.
5. Employees are strictly prohibited from encouraging or circulating rumours or unverified information obtained from clients, industry, any trade or any other sources without verification. Access to blogs / chat forums / messenger sites is strictly prohibited.
6. Any market-related news received by employees through official or personal mail / blog or in any other manner shall not be forwarded without approval from the Compliance Officer.

Sankalp Share Brokers Private Limited has implemented the following internal controls:

1. Registration of Clients: All clients are allowed to trade only after completing the Registration process including the filling of Account Opening Form & KYC Documents. A receipt is taken from the client as a token of acceptance of all documents.
2. Receiving, Validating & Entering Orders: Client orders are accepted verbally on phone or in person and entered only after the client code is mapped to a dealer in the front-end office.
3. Collection and Release of Payments: Cheques are collected from clients within one working day of the transaction. Payment is made to clients within 24 hours of pay-out, unless the client has authorised a running account.
4. Collection and Maintenance of Margins: Margins are collected from specific clients and kept in separate client margin accounts. Mark-to-Market margins are notified to the client upon receipt from the exchange.
5. Collection and Delivery of Securities: Securities for pay-in are received from the client's demat account only. Pay-out is made to clients within 24 hours of receiving from the clearing corporation subject to realization of funds.
6. Monitoring of Branches / DP Operations: Regular visits to branches for compliance checks. DP Operations are carried out centrally at the head office with properly trained staff.
7. Operation and Compliance: Back-office and compliance requirements are looked after by Back Office Executives and the Compliance Officer respectively.
8. Payment of Dividend: Payments of dividend etc. are made to clients as and when received by the Company on their behalf.
9. Continuity Planning: Multiple lease lines, V-SATs and internet connectivity with exchanges. Back-office data is backed up regularly and a copy is kept at a secure place outside the office premises.
10. Communications and Social Networking: Company employees are prohibited from circulating unauthenticated news, rumours or unverified information. Access to blogs / chat forums / messenger sites is restricted. Any market-related news must be approved by the Compliance Officer before forwarding.

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 authorised to deal in securities on behalf of a company / firm / others.
2. Copies of all documents submitted by the applicant should be self-attested and accompanied by originals for verification.
3. If any proof of identity or address is in a foreign language, a translation into English is required.
4. Name & address of the applicant mentioned on the KYC form must match the documentary proof submitted.
5. If correspondence and permanent address are different, proofs for both must be submitted.
6. Sole proprietors must make the application in their individual name and capacity.

Proof of Identity (any one)

• Unique Identification Number (UID) (Aadhaar) / Passport / Voter ID card / Driving License
• PAN card with photograph
• MAPIN card
• Identity card / document with applicant's photo issued by Central / State Government, Statutory / Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges, Professional Bodies (ICAI, ICWAI, ICSI, Bar Council), Credit / Debit cards issued by Banks

Proof of Address (any one)

• Passport / Voter ID Card / Ration Card / Registered Lease / Sale Agreement / Driving License
• Utility bills like Telephone Bill (only landline), Electricity bill or Gas bill — not more than 3 months old
• Bank Account Statement / Passbook — not more than 3 months old
• Self-declaration by High Court and Supreme Court judges giving the new address in respect of their own accounts

Additional Documents for Derivatives Trading

• Copy of ITR Acknowledgement / Annual Accounts
• In case of salary income: Salary Slip or Copy of Form 16
• Net worth certificate
• Copy of demat account holding statement
• Bank Account statement for last 6 months
• Any other relevant documents substantiating ownership of assets

As per the latest SEBI circular on KRA Regulations, KYC Registration Agencies (KRA) are responsible for validating clients' KYC details as per their records. If the details are not updated and validated or are “On hold” / “Rejected”, trading and demat shall be blocked for such accounts.

Updation Process

If your KYC details are incorrect in the KRA portal, furnish the following documents at our Office:

1. Duly filled and signed KRA form with photo.
2. Self-attested copy of PAN card.
3. Self-attested copy of Aadhaar card.

Validation Process

After we process your request, we will inform KRA to update their record. You will receive an SMS and email to your registered mobile number and email ID to validate. Check your spam / trash folder if you do not find the email.

Alternative Validation — KRA Portals

• CVL KRA: validate.cvlindia.com
• KARVY KRA: karvykra.com
• NDML KRA: kra.ndml.in
• DOTEX KRA: nsekra.com
• CAMS KRA: qrkra.camsonline.com

Impact if Not Followed

• Clients shall not be allowed to trade on any exchange or manage their open positions until they comply with KYC requirements.
• Clients' trading and demat accounts will remain deactivated till the KRA details are updated and validated.

After validation, records are processed in 5–7 working days to update and activate your trading and demat accounts.

Objective

Clients are the most important asset of the organisation. However, it is essential to have the client's identity on record and to have regular updation of such records. With the given level of sensitivity in both economic and non-economic terms, it is most important for the survival of the company to have clients with proven identity and to ensure that risk associated thereto is at an acceptable level. Various statutory bodies have prescribed different documents to be obtained to substantiate the identity of the client and continuous identity verification throughout the transactions entered into by the client. The company is also under obligation to submit various reports to different statutory bodies containing details and particulars of certain types of transactions and is required to maintain records thereof. This programme has been formulated to set down the policies and procedures adopted by the Management in this regard.

Scope

The Client Identification Programme gains its scope from business necessity and compliance requirements of various statutory bodies. This programme is designed to formulate policies, procedures, checks, controls and records that the organisation intends to follow or maintain in respect of:

• Due diligence
• Client identification
• Customer acceptance
• Risk analysis
• Documentary requirement
• Submission of reports to statutory authorities
• Retention of records

Types of Client

The Company operates in two segments: Share Broking and Depository Services. Both activities are regulated by statutory bodies including SEBI, NSE, BSE, and CDSL. The Company may have the following types of clients:

• Individual
• Partnership Firm
• Minor
• Hindu Undivided Family (HUF)
• Body Corporates — Private Limited Company, Public Limited Company
• Trust / Society
• Non-Resident Indians (NRI)
• Non-Resident / Foreign Nationals
• Domestic Financial Institutions (other than Banks & Insurance)
• Bank
• Insurance
• Statutory Bodies
• Foreign Institutional Investors (FII)
• OCB

Other special client types include: Illiterate Clients, Deceased Clients, and Joint Holdings. Guidelines prescribed by statutory bodies regarding limitations or restrictions on account opening are to be strictly adhered to. Any query may be forwarded to the Compliance Officer.

Due Diligence of Client

The Company's relationship with a proposed client begins from the moment the client seeks to open an account. Before opening any account, it is of utmost importance to conduct due diligence. Antecedents of the client must be verified to the extent possible. Where a client is introduced by another client or an employee, the introducer must be clearly informed of the roles and responsibilities cast upon them.

Due diligence is a continuous process, and all client accounts are subject to ongoing scrutiny. The Company adopts the following due diligence measures:

• Obtaining sufficient information to identify persons who beneficially own or control securities accounts. Where securities are beneficially owned by a party other than the client, that party must be identified using client identification and verification procedures.
• Verifying the customer's identity using reliable, independent source documents, data or information.
• Identifying beneficial ownership and control — determining which individual(s) ultimately own or control the customer and/or the person on whose behalf a transaction is conducted.
• Verifying the identity of the beneficial owner, corroborating the information provided.
• Conducting ongoing due diligence — performing continuous scrutiny of transactions throughout the business relationship to ensure consistency with the company's knowledge of the customer, its business and risk profile, including the customer's source of funds.
• Before opening any account, the Company shall visit www.un.org/sc/committees/1267/consolist.shtml to ensure the proposed client's name does not appear on the UN sanctions list.
• Clients of Special Category shall be subject to appropriate enhanced counter-measures including further scrutiny of transactions and enhanced reporting mechanisms.

Risk Analysis

Based on the output of the due diligence procedure, the Company shall analyse the risk posed by the client. Apart from regular financial and business risk, the Company shall be particularly careful of risks from Clients of Special Category, which includes:

• Clients with dubious reputation as per public information available
• Clients not visiting the office for opening of accounts
• Clients in whose case mails are returned undelivered
• Clients willing to pay in cash
• Clients willing to trade in exceptionally large volume as compared to their financial position
• Clients located in a known notorious locality
• Clients introduced by someone who does not have a sound or satisfactory record
• Clients whose transactions give rise to a reasonable ground of suspicion of financing terrorism
• Clients whose transactions appear to have no economic rationale or bonafide purpose
• Clients whose transactions may involve proceeds of an offence specified in the Act
• Clients in high risk countries (where money laundering controls are suspect, unusual banking secrecy exists, narcotics production is prevalent, corruption is highly prevalent per Transparency International, government sanctions are applied, or which are known as tax havens, offshore financial centres, or sponsors of terrorism)
• Non-Resident clients
• Clients having high net-worth
• Trusts, Charities, NGOs and organisations receiving donations
• Body Corporates having close family shareholding and beneficial ownership
• Politically Exposed Persons (PEP) — individuals who are or have been entrusted with prominent public functions in a foreign country (e.g. Heads of State, senior politicians, government/judicial/military officers, executives of state-owned corporations, important political party officials)
• Companies offering foreign exchange offerings

Depending on other complexities, there may be other risk factors requiring consideration. Clients are categorised under Low, Medium, or High Risk categories. Risk analysis is also a continuous function to identify risks of non-compliance and potential violation of statutes.

Client Acceptance Policy

The Company follows a policy of filtering account opening requests. The decision to accept or not accept a client is dependent upon different factors including risk analysis. The broad client acceptance policy is:

• Clients under high risk category will generally not be accepted. However, the risk analysis may be placed before the Compliance Officer for a final decision.
• Clients attempting to open an account in a fictitious/benami name or on an anonymous basis shall not be accepted.
• Clients failing to produce required documentary evidences shall not be accepted.
• Clients shall not be accepted where the Company is unable to apply appropriate due diligence measures or KYC policies — such as where the identity cannot be ascertained, information provided is suspected to be non-genuine, or the client does not co-operate fully.

Acceptance of Clients of Special Category

Where a client belongs to a special category, the Company shall accept the client subject to appropriate counter-measures, including enhanced scrutiny, enhanced reporting, and enhanced due diligence. Additional requirements include:

• Additional documents obtained beyond regular proof of identity and proof of address
• Assessment of publicly available information and public image of the client
• Verification of sources of funds to a reasonably satisfying standard
• Acceptance only where senior management and the Compliance Officer are satisfied with the additional information

Documentary Evidences to be Obtained

Whenever a new client account is proposed to be opened, documentary evidences must be obtained centred on two basic criteria: Proof of Identity and Proof of Address. Additional requirements relate to proof of bank account, proof of demat account, financial status, and nature of business. Failure to obtain required documentary evidences may entail penalties.

(A) Under PMLA Act, 2002

In terms of Rules 9 & 10 of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, verification and maintenance of records of identity, current address, nature of business, and financial status of the client is required. Documentary requirements by client type:

Officially Valid Document means: Passport, Driving License, PAN Card, Voter's Identity Card issued by the Election Commission of India, or any other document as may be decided by the Company.

(B) By SEBI for DP Segment — Non-Body Incorporates (Individual, HUF, Trust, Partnership Firms etc.)

As per SEBI Circular No. SMRDP/Policy/Cir-36/2000 and Circular No. MRP/DoP/Cir-29/2004:

Proof of Identity — any one of the following:

• Passport
• Voter ID Card
• Driving License
• PAN Card with photograph
• MAPIN Card
• Identity card/document with applicant's photo issued by Central/State Government, Statutory/Regulatory Authorities, PSUs, Scheduled Commercial Banks, Public Financial Institutions, Universities (for students), Professional Bodies (ICAI, ICWAI, ICSI, Bar Council), or credit/debit cards issued by banks

Proof of Address — any one of the following:

• Ration Card
• Passport
• Voter ID Card
• Driving License
• Bank Passbook
• Electricity bill or Residence Telephone bill (not more than two months old)
• Leave and License Agreement / Agreement for Sale
• Self-declaration by High Court & Supreme Court judges
• Identity card/document with address issued by Central/State Government, Statutory/Regulatory Authorities, PSUs, Scheduled Commercial Banks, Public Financial Institutions, Universities (for students), or Professional Bodies

In case of joint holdings, Proof of Identity and Proof of Address must be collected for all account holders. Photocopies must be verified with originals and an authorised official must sign them with the remark "Verified with original".

(B) By SEBI for DP Segment — Body Incorporates

• Memorandum & Articles of Association (MOA & AOA), Board resolution for opening demat account, and list of authorised signatories with specimen signatures and photographs
• Introduction by an existing account holder or the applicant's bank
• Proof of address evidenced by document registered with Registrar of Companies, or acknowledged copy of Income Tax Return, or Bank Statement, or Leave and License Agreement

(C) By SEBI for Trading Segment — Individuals

As per SEBI Circular No. SEBI/MIRSD/DPS-1/Cir-31/2004 dated 26 August 2004:

Proof of Identity — any one of: MAPIN UID Card, PAN Number, Passport, Voter ID, Driving License, Photo Identity card issued by employer registered under MAPIN.

Proof of Address — any one of: Passport, Voter ID, Driving License, Bank Passbook, Rent Agreement, Ration Card, Flat Maintenance Bill, Telephone Bill, Electricity Bill, Certificate issued by employer registered under MAPIN, Insurance Policy.

Photocopies must be verified with their corresponding originals.

(C) By SEBI for Trading Segment — Corporates, Firms & Others

• Copies of balance sheet for the last 2 financial years (to be submitted every year)
• Copy of latest shareholding pattern including all those holding more than 5%, duly certified by company secretary / whole-time director / MD (to be updated every year)
• Copies of Memorandum and Articles of Association (for companies) or Partnership Deed (for firms)
• Copy of Board resolution approving participation in equity/derivatives/debt trading and naming authorised persons
• Photographs of partners/whole-time directors, individual promoters holding 5% or more (directly or indirectly), and persons authorised to deal in securities

Photocopies must be verified with their corresponding originals.

Procedure for Change of Address

Non-Body Incorporates (Individual, HUF, Trust, Partnership Firms etc.)

• A written application for change of address (signed by all holders in case of joint holdings)
• Proof of identity (copy of any one prescribed document)
• Latest transaction statement of the account received from the Company
• Proof of new address along with original documents for verification

The client should personally visit the Company's office. If unable to visit, an authorised representative may submit the documents subject to identity verification. The client or representative must sign the application in the presence of Company officials. After effecting the change in the DPM system, a confirmation is sent to both the old and new addresses.

Body Incorporates

• Written application signed by all authorised signatories
• Latest transaction statement and proof of new address with original for verification
• At least one authorised signatory must visit the office in person

A letter shall be sent to the client at both old and new addresses to confirm the change.

Procedure for Change of Signature

1. Client must make a written request specifying reasons for change in signature.
2. New signature must be duly attested by the client's banker.
3. Client must visit the Company's office in person and produce valid proof of identity and latest transaction statement.
4. In the presence of Company officials, the client must affix the new signature.
5. An authorised official shall verify the identity proof with the photograph furnished at account opening and, if found satisfactory, make the necessary changes in records.

Procedure for Change of Signatories

In case of non-individual clients (e.g. HUF Karta change, body corporate signatory change), the following procedure applies:

• A written request for change of signatories must be forwarded to the Company
• The request must be accompanied by appropriate, valid, legally enforceable resolution or authority
• Consent of the whole management, and in the case of HUF, all members, must be enclosed
• Where change is necessitated by death, a copy of the death certificate must be enclosed
• The Company may obtain a no-objection from signatories being removed, where possible
• Necessary due diligence and risk analysis shall be conducted
• Proof of identity and proof of address of the proposed new signatory/signatories must be obtained and verified
• To the extent applicable, formalities for opening a new account shall be complied with
• The matter shall be forwarded to the Compliance Officer who is responsible for effecting the change

Nature of Business

As per PMLA 2002 and rules framed thereunder, it is necessary to obtain the nature of business of the client at the time of account opening. A self-declaration from the client must be obtained. The Company shall periodically seek confirmation from the client to ensure the recorded nature of business remains current. As far as possible, Trade License should be obtained and renewed copies maintained annually.

Wherever there is reason to doubt the legality of the business, extra measures shall be initiated. If it comes to the Company's knowledge that a client is engaged in illegal business or activity, this must be promptly reported to the Compliance Officer who shall take necessary steps, including reporting to statutory authorities.

Financial Status of the Client

The financial status of the client has a direct bearing on the business risk of the Company. Clients shall generally be permitted to transact only on availability of appropriate margin as prescribed by SEBI. It is necessary to ascertain the solvency position of the client and initiate necessary steps in a timely manner.

For Body Corporates, SEBI mandates that Balance Sheets be obtained annually. It will be the Company's endeavour to obtain Financial Statements and Income Tax Acknowledgement receipts from all clients. Field staff shall be trained to identify doubtful transaction patterns, including:

• Frequent change of bank account
• Frequent change of DP account
• Frequent bouncing of cheques
• Sudden surge in number and volume of transactions, and vice versa

Operation of Account by Third Party

In general, operations in a trading account or demat account shall be carried out by the account holder only. Operations by third parties shall not be allowed. However, where a valid Power of Attorney or written authorisation is executed by the client in favour of a third party and a copy is forwarded to the Company, operations may be allowed subject to due diligence of such third party. The Compliance Officer alone is empowered to allow or disallow third party operations on a client's account.

Continuous Verification of Identity of the Client

Identity verification is not a one-time affair. Provisions of PMLA 2002 and rules framed thereunder prescribe that identity shall be verified at the time of executing any transaction. The Company shall keep Proof of Identity, Proof of Address, Nature of Business, and Financial Status records current at all times.

Measures adopted for continuous verification include:

• Ensuring all cheques from the client are from the bank and branch stated at account opening or subsequently updated through proper procedure
• Ensuring deliveries are from the demat account stated at account opening or subsequently updated
• Periodical postal dispatch of contract notes and statements to the recorded address
• Sending a welcome letter on opening of account
• Periodically contacting the client by telephone or visiting through field staff
• Obtaining documents at yearly intervals: Financial Statements, Income Tax Acknowledgement Receipts, Trade License

The Company shall remain vigilant of suspicious or potentially suspicious transactions. Circumstances which may indicate suspicious transactions include (illustrative, not exhaustive):

• Clients whose identity verification seems difficult or who appear not to co-operate
• Asset management services for clients where source of funds is not clear or not consistent with apparent standing or business activity
• Clients in high-risk jurisdictions or clients introduced by banks, affiliates, or other clients based in high-risk jurisdictions
• Substantial increases in business without apparent cause
• Unusually large cash deposits made by an individual or business
• Clients transferring large sums to or from overseas locations with instructions for payment in cash
• Transfer of investment proceeds to apparently unrelated third parties
• Unusual transactions by CSCs and businesses undertaken by shell corporations, offshore banks or financial services, or businesses in the nature of export-import of small items

The Company shall regularly visit www.un.org/sc/committees/1267/consolist.shtml to ensure no client or proposed client appears on the UN sanctions list.

Record Keeping

The Company shall maintain records sufficient to permit reconstruction of individual transactions (including amounts and types of currencies involved) so as to provide evidence for prosecution of criminal behaviour if necessary. The following information shall be retained for all customer accounts:

• The beneficial owner of the account
• The volume of funds flowing through the account
• For selected transactions: origin and destination of funds; form in which funds were offered or withdrawn (cash, cheques, etc.); identity of the person undertaking the transaction; form of instruction and authority

Records may be maintained in hard copy or soft copy but must be properly maintained and produced as and when required by statutory bodies. The Compliance Officer shall ensure documents are kept properly and available for retrieval.

The Company is mandatorily required to maintain records of:

• All cash transactions of value more than ₹10 lakhs or equivalent in foreign currency
• All series of cash transactions below ₹10 lakhs within one calendar month where the aggregate exceeds ₹10 lakhs
• All cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine, or where any forgery of a valuable security has taken place
• All suspicious transactions, whether or not made in cash, including credits or debits into/from non-monetary accounts such as demat accounts or security accounts

In addition, the following must be preserved for each transaction: nature of transaction; amount and currency; date on which the transaction was conducted; parties to the transaction.

Retention of Records

Rule 10 of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 prescribes that records of the identity of clients shall be maintained for a period of ten years from the date of cessation of the transaction between the client and the Company.

Additional requirements under exchange regulations:

• NSE Regulation 6.1.4: Trading Members shall maintain client ID mapping (name, address, KYC particulars) for a period of seven years.
• NSE Regulation 6.1.12: Records relating to terms and conditions of account opening shall be preserved for not less than six years after closing of any constituent's account.

Where records relate to ongoing investigations or transactions subject to a Suspicious Transaction Report, they shall be retained until it is confirmed that the case has been closed. The Company shall retain records in terms of the statute that provides for the maximum retention period, which is currently ten years as stated above.

Submission of Reports / Documents

The Company is required to submit different documents to different statutory bodies — some of routine nature and some event-based. The Compliance Officer shall ensure timely compliance with all such requirements. Key reporting timelines:

• Cash Transaction Report (CTR): To be submitted to FIU-IND by the 15th of the succeeding month (wherever applicable).
• Suspicious Transaction Report (STR): To be submitted within 7 days of arriving at a conclusion that any transaction — whether cash or non-cash, or a series of connected transactions — is of a suspicious nature or involves proceeds of crime.

The Principal Officer, designated as Compliance Officer for PMLA purposes, shall be a person of sufficiently higher hierarchy, able to discharge functions with independence and authority. The Principal Officer shall have access to and be able to report to senior management above their next reporting level or the Board of Directors.

Monitoring of Suspicious Transactions & Reporting

The Company shall ensure regular monitoring of transactions to maintain effectiveness of Anti Money Laundering (AML) procedures. To achieve this:

• A normal benchmark of transactions shall be determined for each client and a reporting system developed for transactions beyond that benchmark.
• Special attention shall be paid to all complex, unusually large transactions or patterns with no apparent economic purpose. All related documents, records, memorandums and findings shall be recorded in writing and made available to auditors and SEBI/Exchanges/FIU-IND as required. These records must be preserved for ten years.
• Suspicious transactions shall be regularly reported to higher authorities / head of department.
• A compliance cell shall be formulated to randomly examine a selection of client transactions and assess their nature.
• Any suspicious transaction shall be immediately notified to the Compliance Officer in the form of a detailed report specifying the client, transaction, and nature/reason of suspicion. There shall be continuity in dealing with the client as normal until otherwise directed, and the client must not be informed of the report or suspicion.
• Transactions abandoned or aborted by customers on being asked for details or documents shall also be reported in STRs, irrespective of the amount.
• Details of such transactions shall also be provided to the Director, Financial Intelligence Unit-India (FIU-IND).
• For clients in high-risk countries, the Company shall be guided by FATF statements published at www.fatf-gafi.org and also consider other publicly available information independently.
• Appropriate risk management systems shall be put in place to determine whether a client, potential client, or beneficial owner is a Politically Exposed Person (PEP). Enhanced Customer Due Diligence (CDD) measures shall be applied to PEPs, including verification of sources of funds and wealth.

Employees' Hiring / Training / Investor Education

• Hiring: Adequate screening procedures shall be in place to ensure high standards when hiring employees. Key positions having regard to money laundering and terrorist financing risk shall be identified, and employees in such positions shall be suitable and competent.
• Training: An ongoing employee training programme shall ensure that staff are adequately trained in AML and CFT (Combating the Financing of Terrorism) procedures. Training shall cover frontline staff, back office staff, compliance staff, risk management staff, and staff dealing with new customers. Staff must understand the rationale behind these guidelines and implement them consistently.
• Investor Education: The Company shall educate investors about AML and CFT requirements by circulating timely literature and pamphlets about the objectives of the AML/CFT programme and through personal meetings with investors.

Audit Function

The Company shall ensure that the policies and procedures stated in this programme are followed. The scope of internal audit shall be enlarged to ensure compliance with policies, procedures, and controls relating to prevention of money laundering and terrorist financing. The audit shall include:

• Testing of the system for detecting suspected money laundering transactions
• Evaluating and checking the adequacy of exception reports generated on large and/or irregular transactions
• Assessing the quality of reporting of suspicious transactions
• Evaluating the level of awareness of front line staff of their responsibilities

Changes & Modification of the Programme

This programme shall be adopted by the Board of the Company and owned by the Compliance Officer. A copy shall be forwarded to all concerned employees and field staff. Any queries or doubts shall be forwarded to the Compliance Officer, who is obligated to resolve them.

Rules and laws governing the business are dynamic and undergo change from time to time. The Board has therefore decided to conduct a review of changes, if any, once a year. The Compliance Officer shall be responsible for ensuring this programme remains current at all times and that any additions, modifications, or deletions are duly approved by the Board.

For further information, visit: www.sebi.gov.in and fiuindia.gov.in

As per SEBI Circular SEBI/HO/MIRSD/POD-1/P/CIR/2024/4 dated 12 January 2024, the following policy has been formulated for voluntary freezing / blocking of trading accounts. This policy is effective from 1 July 2024.

How to Request Freezing

If a client notices any suspicious activity or suspects their login credentials have been breached, they can request freezing through either of these modes:

• Option A: Call 9330266651 from your registered mobile number.
• Option B: Send an email to stoptrade@sankalpcares.com from your registered email ID.

The intimation should contain minimum identity details: Trading A/C Code / UCC / PAN / Account Name.

Timelines for Freezing

Unfreeze Procedure

To unfreeze, send an email to stoptrade@sankalpcares.com or a message on 9330266651 from your registered email / mobile. The team will contact you to confirm identity and genuineness of request, reset login credentials and communicate the same to you.

Clarifications

• Freezing / blocking only restricts online access to the client's trading account. There will be no restrictions on the risk management activities of Sankalp Share Brokers Private Limited.
• The request for freezing / blocking does not equate to marking the client's UCC as inactive in Exchange records.

Version 1.0 dated 28 November 2024. As per NSE Circular No. NSE/INSP/62528 dated 21 June 2024 and BSE Circular No. 20240622-2 dated 22 June 2024.

Good Till Date (GTD) Orders

SSBPLTD allows clients to place Good till Date (GTD) orders for Equity Cash products, Index Futures and Index Options.

• GTD orders enable clients to place buy and sell limit orders specifying a validity period within SSBPLTD's maximum allowed date.
• All current and new clients eligible to trade in Equity Cash products and Derivatives can use the GTD facility.
• GTD orders must be placed at a limit price and cannot be submitted at market price.
• A maximum of five GTD orders per scrip is allowed, with a total cap of thirty GTD orders across all eligible scrips.
• Clients may modify the quantity or limit price of GTD orders while in ‘Ordered’ or ‘Requested’ status. GTD orders in ‘Blocked’ status can only be cancelled.
• GTD orders can be placed during the pre-open session for all eligible scrips.
• If the GTD order validity date falls on a non-trading day, the order will expire on the last trading day before that non-trading day.
• Brokerage rates and applicable charges for GTD orders are consistent with those for regular transactions.

Handling During Corporate Actions

Following a corporate action, GTD orders will be validated against the Daily Price Range (DPR) issued by the exchange. Notifications via email and SMS will be sent to clients if GTD orders fall short of funds / securities or are blocked due to price limitations. Clients with unexecuted GTD orders will be notified of all upcoming corporate actions at least one day before the ex-date.

Policy Review

This policy will be reviewed annually.

As per SEBI Notification No. LAD-NRO/GN/2010-11/21/29390 dated 10 December 2010, Associated Persons involved in:

• Assets or funds of investors or clients
• Redressal of investor grievances
• Internal control or risk management
• Activities having a bearing on operational risk

shall obtain the valid certification of NISM Series VII — Securities Operations and Risk Management (SORM) within two years from the date of notification. New employees in the specified categories shall obtain the certification within one year of employment.

Exemption

Associated persons handling basic clerical / elementary functions in the above-specified areas are exempted from obtaining the NISM-SORM certification, provided they are supervised by a person who holds or continues to hold the NISM-SORM certification.

Pre-funded instruments include Demand Drafts, Pay Orders, Banker's Cheques, etc.

• A pre-funded instrument issued by the bank against cash shall not be accepted for an amount of ₹50,000 or more.
• All pre-funded instruments having an aggregate value of ₹50,000 or more per day per client must be accompanied by the name of the bank account holder and the number of the bank account debited, duly certified by the issuing bank.

Acceptable Modes of Certification

1. Certificate from the issuing bank on its letterhead or on plain paper with the seal of the issuing bank.
2. Certified copy of the requisition slip retained by the bank.
3. Certified copy of the passbook / bank statement for the account debited.
4. Authentication of the bank account number debited and name of the account holder by the issuing bank on the reverse of the instrument.
5. RTGS / NEFT / Online bank transfer etc.

Receipt from clients using Electronic Fund Transfer shall be accepted only if the name of the client with the bank name is reflected on our online bank statement, or on receipt of a copy of the instruction to the bank stating the account number debited.

The member reserves the right to reject the payment, post acceptance, if any requisite documents / declarations are unavailable or incomplete, and in such case the member shall refund the money without interest. Such refunds will be marked “A/c. Payee Only” and will be in favour of clients only.

Refusal of Orders for Penny Stocks

SANKALP shall have absolute discretion to term a stock as “Penny Stock”. “Penny Stock” refers to stocks appearing in the list of illiquid securities issued by the Exchange every month and any other stocks which SANKALP might consider to be illiquid. SANKALP at its discretion can accept, refuse or partially accept any buy or sell order in such scripts and may demand appropriate declarations and additional margin from the client before accepting the order.

Setting up Client Exposure Limits

Exposure limit of each client is set based on margin money given by the client including ledger balance after applying appropriate haircut and as per Exchange Regulations. Upfront margin is collected from clients. The exposure limit may be changed based on volatility in the market, quality of collateral and client's existing open position.

Applicable Brokerage

The brokerage rate applicable to clients varies depending on the category of the client (HNI, Institutional, low / medium / high risk client). The brokerage is fixed with the mutual consent of the client. Brokerage charged does not exceed the maximum specified by the Exchange. Changes to brokerage rates are communicated with 15 days' notice.

Penalty / Delayed Payment Charges

Clients are liable to pay delayed payment charges @ 0.07% per calendar day on overdue amounts. Interest in the Derivatives Segment on shortage of cash component is charged @ 0.07% per day including holidays. Penalties may also be levied for bouncing of cheques, non-delivery, auction on failure of payment, and short / non-payment of margin money.

Right to Sell Client's Securities

SANKALP shall be entitled to liquidate client's securities or close out client's open positions without notice for non-payment of margins or other amounts, adjusting the proceeds against the client's liabilities. Any and all losses and financial charges on account of such liquidations shall be borne by the client.

Conditions for Restricting / Closing Positions

• Client unable to meet pay-in obligation as per exchange requirements
• Long pending debit balance in the client's account
• Dishonour of cheque
• Client dealing in “illiquid” stock as declared by SANKALP
• Transactions which appear suspicious in nature
• Failing to provide sufficient margin within the specified time
• Taking further position would violate any circular, rules, regulations or bye-laws of stock exchanges or SEBI

Inactive Accounts

The account of a client who does not trade and remains inactive for 24 months shall be declared an “inactive account” and will be temporarily suspended. Reactivation requires submission of updated KYC documents and margin as required.

Sankalp Share Brokers Private Limited operates the following risk management system:

• Upfront margins are collected from clients before entering into any transaction as per the margining system of the relevant exchange, calculated with exchange-provided software.
• Mark-to-Market (MTM) losses are collected from clients on a daily basis.
• For Capital Market Segment, financial details such as Bank Statement, Demat Statement, Balance Sheet, ITR, and Income Proof are taken to judge the financial health and position of the client. Client limits are allotted based on financial position and soundness.
• Cheques are collected from clients in a timely manner after the client has transacted. Pay-out of securities is made after receiving payment from them.
• If a client fails to make payment within the stipulated time, securities would be squared off and the balance amount paid / recovered from the client.
• Limits for existing clients are updated periodically by assessing their trading history and payment regularity.
• A policy relating to default by the client in making payment of obligations is implemented by reducing or squaring off outstanding positions to the extent of shortfall.
• Client physical addresses are continuously checked by sending quarterly statements of accounts to their registered address.
• Financial documents of clients are updated on a yearly basis to monitor their financial health.

The following transactional alerts are generated by Exchanges and monitored by the Compliance Team on a daily basis:

Action Process

1. Analysis of orders / trades on the basis of financial soundness, past trading pattern, bank / demat transaction details and other publicly available information.
2. If necessary, issue a letter to the client seeking explanation within 7 days of receipt of the alert.
3. Seek documentary evidence such as Bank Statement / Demat Statement / Financial Statements.
4. Bank / Demat Statement period should be at least ±15 days from the date of transactions.
5. Record observations. For Exchange-generated alerts, non-reply or adverse observations shall be reported to the Exchange within 45 days. For internally-generated alerts, report to FIU-IND within 7 days.
6. If alerts cannot be disposed within 45 days, seek extension from the exchanges with necessary reason.
7. Records of all alerts, letters issued and replies received shall be preserved for at least 5 years.

The overall surveillance policy shall be implemented and monitored by the Compliance Officer. A Quarterly MIS report shall be prepared and put before the Board of Directors detailing alerts received, disposed, and pending. The Surveillance Policy shall be updated on a periodic basis based on inputs obtained from Exchanges or derived from within the organisation, after ratification from the Board of Directors.

The SARAL Account Opening Form is the simplified account opening form for resident individuals trading in the cash segment. It includes:

• Section I (KYC): Identity details, Father's / Spouse Name, Gender, Date of Birth, Nationality, PAN, Aadhaar Number, Proof of Identity, Address Details, Contact Details.
• Section II (Other Details): Bank account details, Demat account details, Trading preferences (NSE / BSE / MCX-SX), Mode of receiving Contract Notes / Statements, Standing instructions, Nomination details.
• CDSL Supplementary Form (Annexure 2.8): Additional information including DP ID, holder details, account statement requirements, SMS alert facility, nomination details.

Download the account opening form:

⬇ Download SARAL Account Opening Form (PDF)

Note: This form is applicable for individual investors trading in the cash segment. For trading in segments other than the cash segment and / or for facilities such as internet trading, running account, margin trading, or Power of Attorney, please contact our office for additional forms.