Terms and Conditions applicable for Margin Trading

Part A: Rights and Obligations - Mandatory Clauses of BSE

Stock Broker/ Trading Member is eligible to provide Margin Trading Facility (MTF) in accordance with SEBI & Exchange Guidelines as specified from time to time.

1. Stock Broker/ Trading Member desirous of extending MTF to their clients is required to obtain prior permission of BSE. Stock Broker/ Trading Member may note that BSE has the right to withdraw the permission at anytime.
2. Stock Broker/ Trading Member shall extend the MTF to the client, on such terms and conditions as specified by the Stock Exchange / SEBI from time to time. Stock Broker/ Trading Member and the client shall abide by the requirements of the margin trading framework, including rights and obligations, as prescribed by Stock Exchange/ SEBI/ Stock Broker/ Trading Member.
3. Stock Broker/ Trading Member shall intimate all the terms and conditions, including maximum allowable exposure, specific stock exposures etc., as well as the rights and obligations to the client desirous of availing MTF.
4. Stock Broker/ Trading Member may, at its sole and absolute discretion, increase the limit of initial and/or maintenance margin, from time to time. The Client shall abide by such revision, and where there is an upward revision of such margin amount, he agrees to make up the shortfall within such time as the Stock Broker/ Trading Member may permit. It may however, be noted that the initial/ maintenance margins shall never be lower than that prescribed by Stock Exchange/ SEBI.
5. Stock Broker/ Trading Member shall provide MTF only in respect of such shares, as may be permitted by Stock Exchange/ SEBI.
6. Stock Broker/ Trading Member shall liquidate the securities and other collateral, if the client fails to meet the margin call to comply with the margin requirement as specified by Stock Exchange/ SEBI/ Stock Broker/ Trading Member. In this regard, Stock Broker/ Trading Member shall also list down situations/ conditions in the which the securities may be liquidated (Stock Broker/ Trading Member to list down situations/ conditions which are included in the subsequent part of the T&C below).
7. Stock Broker/ Trading Member shall not use the funds of one client to provide MTF to another client, even if the same is authorized by the first client.
8. The stocks deposited as collateral with the Stock Broker/ Trading Member for availing margin trading facility (Collaterals) and the stocks purchased under the margin trading facility (Funded stocks) shall be identifiable separately and no comingling shall be permitted for the purpose of computing funding amount
9. IPF shall not be available for transactions done on the Stock Exchange, through MTF, in case of any losses suffered in connection with the MTF availed by the client.

Part B : Rights and Obligations - Mandatory Clauses of NSE

CLIENT RIGHTS

1. Client shall receive all communications in a mode mutually agreed between the broker and the client regarding confirmation of orders/trades, margin calls, decision to liquidate the position / security.
2. Client shall be free to take the delivery of the securities at any time by repaying the amounts that was paid by the Stock Broker to the Exchange towards securities after paying all dues.
3. Client has a right to change the securities collateral offered for Margin Trading Facility at any time so long as the securities so offered are approved for margin trading facility.
4. Client may close / terminate the Margin Trading Account at any time after paying the dues.

CLIENT OBLIGATIONS

1. Client shall, in writing in his own hand or in any irrefutable electronic method, agree to avail of Margin Trading Facility in accordance with the terms and conditions of Margin Trading Facility offered by the broker, method of communication for confirmation of orders/trades, margin calls and calls for liquidation of collateral/security/position.
2. Client shall inform the broker of its intent to shift the identified transaction under Margin Trading Facility within the time lines specified by the broker failing which the transaction will be treated under the normal trading facility
3. Client shall place the margin amounts as the Stock Broker may specify to the client from time to time.
4. On receipt of ‘margin call’, the client shall make good such deficiency in the amount of margin placed with the Stock Broker within such time as the Stock Broker may specify.
5. By agreeing to avail Margin Trading Facility with the broker, client is deemed to have authorized the broker to retain and/or pledge the securities provided as collateral or purchased under the Margin Trading Facility till the amount due in respect of the said transaction including the dues to the broker is paid in full by the client.
6. Client shall lodge protest or disagreement with any transaction done under the margin trading facility within the timelines as may be agreed between the client and broker.

STOCK BROKER RIGHTS

1. Stock Broker and client may agree between themselves the terms and condition including commercial terms if any before commencement of MTF.
2. Stock broker may set up its own risk management policy that will be applicable to the transactions done under the Margin Trading Facility. Stock broker may make amendments there to at any time but give effect to such policy after the amendments are duly communicated to the clients registered under the Margin Trading Facility.
3. The broker has a right to retain and/or pledge the securities provided as collateral or the securities bought by the client under the Margin Trading Facility.
4. The broker may liquidate the securities if the client fails to meet the margin call made by the broker as mutually agreed of liquidation terms but not exceeding 5 working days from the day of margin call.

STOCK BROKER OBLIGATIONS

1. Stock broker shall agree with the client the terms and condition before extending Margin Trading Facility to such client. However, for clients who already have existing trading relationship and want to avail of Margin Trading Facility, stock broker may take consent in writing in his own hand or in any irrefutable electronic method after stock broker has communicated the terms and conditions of Margin Trading Facility to such existing clients.
2. The terms and conditions of Margin Trading Facility shall be identified separately, in a distinct section if given as a part of account opening agreement.
3. The mode of communication of order confirmation, margin calls or liquidation of position/security shall be as agreed between the broker and the client and shall be in writing in his own hand or in any irrefutable electronic method. Stock broker shall prescribe and communicate its margin policies on haircuts/ VAR margins subject to minimum requirements specified by SEBI and exchanges from time to time.
4. The Stock Broker shall monitor and review on a continuous basis the client’s positions with regard to MTF. It is desirable that appropriate alert mechanism is set up through which clients are alerted on possible breach of margin requirements.
5. Any transaction to be considered for exposure to MTF shall be determined as per the policy of the broker provided that such determination shall happen not later than T + 1 day.
6. If the transaction is entered under margin trading account, there will not be any further confirmation that it is margin trading transaction other than contract note.
7. In case the determination happens after the issuance of contract, the broker shall issue appropriate records to communicate to Client the change in status of transaction from Normal to Margin trading and should include information like the original contract number and the margin statement and the changed data.
8. The Stock Broker shall make a ‘margin call’ requiring the client to place such margin; any such call shall clearly indicate the additional/deficient margin to be made good.
9. Time period for liquidation of position/security shall be in accordance declared policy of the broker as applicable to all MTF clients consistently. However, the same should not be later than 5 working (trading) days from the day of ‘margin call’. If securities are liquidated, the contract note issued for such margin call related transactions shall carry an asterisk or identifier that the transaction has arisen out of margin call.
10. The daily margin statements sent by broker to the client shall identify the margin/collateral for Margin Trading separately.
11. Margin Trading Accounts where there was no transactions for 90 days shall be settled immediately.
12. The stocks deposited as collateral with the stock broker for availing margin trading facility (Collaterals) and the stocks purchased under the margin trading facility (Funded stocks) shall be identifiable separately and there shall not be any comingling for the purpose of computing funding amount;
13. Stock Broker shall close/terminate the account of the client forthwith upon receipt of such request from the client subject to the condition that the client has paid dues under Margin Trading Facility.

TERMINATION OF RELATIONSHIP

1. The margin trading arrangement between the stock broker and the client shall be terminated; if the Stock Exchange, for any reason, withdraws the margin trading facility provided to the Stock Broker or the Stock Broker surrenders the facility or the Stock Broker ceases to be a member of the stock exchange.
2. The MTF facility may be withdrawn by the broker, in the event of client committing any breach of any terms or conditions therein or at anytime after due intimation to client allowing such time to liquidate the MTF position as per the agreed liquidation terms without assigning any reason. Similarly, client may opt to terminate the margin trading facility in the event of broker committing any breach of any terms or conditions therein or for any other reason.
3. In the event of termination of this arrangement, the client shall forthwith settle the dues of the Stock Broker. The Stock Broker shall be entitled to immediately adjust the Margin Amount against the dues of the client, and the client hereby authorizes the Stock Broker to make such adjustment.
4. After such adjustment, if any further amount is due from the client to the Stock Broker, the client shall settle the same forthwith. Upon full settlement of all the dues of the client to the Stock Broker, the Stock Broker shall release the balance amount to the client.
5. If the client opts to terminate the margin trading facility, broker shall forthwith return to the client all the collaterals provided and funded securities retained on payment of all the dues by clients.

Part C: Terms and Conditions of Sharekhan Limited for Margin Trading Facility.

This document outlines Risk management Policies framed and followed by Sharekhan Limited (“Sharekhan”) with respect to dealing with Clients for Margin Trading Facility (“MTF”) on Securities and Exchange Board of India (SEBI) and Stock Exchanges. The policies as stated herein below are subject to change from time to time at the sole discretion of Sharekhan, depending upon regulatory requirements /changes its risk management framework, other market conditions, etc. The said policies and any revision/updation in the same from time to time is/will be available in the Clients web login provided by Sharekhan on its website. The Client can access and refer to such policies by using user id and password provided by Sharekhan. Further, Client shall at all time be responsible for changes due to regulatory requirement by SEBI / Stock Exchanges irrespective of relevant changes are incorporated in Terms and conditions of Sharekhan.

PRODUCT FEATURES

MTF hereinafter referred to as "MARGIN TRADING or "MTF", (known as Exchange margin funding in Sharekhan) is a facility offered by Sharekhan which allows the Client to take positions by providing prescribed margin and the balance amount is funded by Sharekhan to meet the pay-in obligation of the Client. Client can later take delivery either by making the necessary funds settlement or square up such positions. The Client agrees that any fresh position under MTF shall be allowed to be created only when Client has provided Margin required for such position in such form as specified by Sharekhan. The balance obligation would be funded by Sharekhan and will be paid to the Stock Exchanges for meeting the Client's pay-in obligation.

1. Eligibility for Availing of Margin Trading facility
   All registered Clients of Sharekhan shall be eligible to avail the MTF subject to the applicable Rules, regulations and circulars from SEBI / Exchanges and acceptance of terms and conditions of the said facility.
2. Consent of the Client
   Clients desirous of availing the MTF shall, in writing in their own hand or in any irrefutable electronic method, agree to avail of MTF in accordance with the terms and conditions of MTF. Once the facility is activated for margin trading, all the orders placed under the margin trading shall be marked under Margin trading. In case the Client has opted for “Auto funding” facility wherein all the net deliverable positions of approved stocks across Exchanges shall be marked under MTF subject to sufficient availability of margin.
3. Securities eligible for margin trading
   Equity Shares that are classified as 'Group I security' as per SEBI Master circular No. SEBI/HO/MRD/DP/CIR/P/2016/135 dated December 16, 2016, shall be eligible for MTF.
   
   The Client understands that SEBI/Stock Exchanges have prescribed securities which are eligible to be offered in MTF. Hence, MTF shall not be offered in all the securities traded on Stock Exchanges. The Client agrees that Sharekhan shall have the discretion to select securities that will be enabled for trading under the facility as per its internal risk management policy and the number of stocks enabled for trading under MTF which can be smaller than the number of stocks allowed by SEBI/Stock Exchanges.
4. Margin Requirement
   In order to avail margin trading facility, margin payable by the Client to Sharekhan shall be in the form of cash, cash equivalent or equity shares, with appropriate hair cut as specified by SEBI/Stock Exchanges from time to time.
   
   Sharekhan may at its sole and absolute discretion may prescribe higher margin requirement than prescribed by SEBI/ Stock Exchanges for collection from the Client. Further, Sharekhan may also from time to time at its sole discretion charge higher rate of hair cut than prescribed by SEBI/Stock Exchanges on the securities provided as collaterals by the Client.
   
   If no sufficient margin available in the Client’s MTF account, then trade will not be considered at all under MTF or will be considered only to the extent of available margin.
   
   In case of increase in the value of Collaterals, further exposure may be granted to the Client subject to applicable haircuts and in lines with the Risk Management policy of the company. However, no such exposure shall be permitted on the increased value of funded stocks.
5. Margin call and Liquidation of securities by the broker in case of default by the Client.
   The margin requirement of Client may be changed due to factors such as market volatility, negative news, risk management policy of Sharekhan, etc. The margin calls will be made to the Client in case margin short fall exceeds margin required for continues period of 10 trading days as per RMS policy or margin shortfall as per SEBI / Stock Exchange prescribed margin whichever is earlier. The margin calls will be promptly made to the Client through any one or more means or methods such as by displaying in the Client’s login or any other applicable mode or manner.
   
   The Client shall monitor margin shortfall as required from time to time, and whether or not any margin call is made or such other separate communication to that effect is sent by Sharekhan to the Client and /or whether or not such communication is received by the Client to avoid any liquidation.
   
   Sharekhan may sell the securities or liquidate the existing position of a Client in full / partial if the available margin falls short of minimum prescribed margin as specified by SEBI / Stock Exchanges / Sharekhan. In case of any shortfall in the margin or debit remains even after liquidating the open position, or liquidating the collaterals provided by Client, Sharekhan may liquidate the shares lying in the Clients demat account or its beneficiary account to recover the outstanding dues.
   
   The securities may be liquidated even in case the Client’s deposit in the margin account (after adjustment for mark to market losses) falls below such determined percentage of the latest market value of the securities, in the interregnum between making of the margin call and receipt of payment from the Client, as determined by the Risk management policy, prevailing market conditions or such other factors requiring immediate action.
   
   SEBI/ Stock Exchanges have specified category of securities which are eligible to be accepted as collateral towards MTF by the stock broker. The Client agrees that if specific stock given by the Client towards collateral moves out of the eligible list of securities, then the limit given against such stock shall be withdrawn by Sharekhan immediately. In view of the same, MTF open positions of the Client may get squared off if sufficient additional margin is not replenished by the Client. Client agrees that Sharekhan reserves the right to decide the securities which it may accept as margin from Clients.
   
   The Client agrees that Sharekhan may at its sole discretion, change the margin requirement on the transactions, in which the Client has taken or proposes to take positions depending on its own risk mitigation measures and without intimating or consulting the Client. Due to increased volatility in the prices, the margin requirement may be increased and in such event the Client undertakes to provide additional funds/securities to continue with the open position. If such Margin requirement is not met, the position may be squared off by Sharekhan due to insufficient Margin. The Client undertakes to maintain sufficient margin to safeguard the open position from being squared off. Any and all losses (actual or notional), financial charges, damages on account of such liquidation shall be binding and borne by the Client only.
   
   Notwithstanding the fact that Sharekhan may have prescribed higher margin requirement, if the margin available in the Clients accounts is sufficient to meet the margin requirement prescribed by SEBI / Stock Exchanges for collecting from the Clients, then Sharekhan, at its sole and absolute discretion, may allow the Client to take further position and / or continue with the existing position of the Client as per SEBI / Stock Exchanges prescribed margin requirement.
6. Other Terms and Conditions:
   
   
   1. The Client agrees that under the Facility, Margin shall be blocked at the time of order placement after taking into account the limit price. For market orders, margin shall be blocked considering the order price as the last traded price of the security. In the event the actual trade execution takes place at a price different from the price at which the Margin was blocked, the required Margin would then be re-calculated and the limits would be blocked at the actual traded Price. In case of order modification also, the required Margin shall be re-calculated and excess margin, if any, shall be released or additional margin needed, if any, will be blocked. In case the available margin is insufficient, then the order modification request would get rejected.
   2. The orders will be allowed only if the order prices are within the daily price range decided by the Exchange and within the daily price range as decided by Sharekhan, if any, from time to time. If the order price is not within the above price range then such fresh order(s) would be rejected.
   3. The Client agrees and confirms that Sharekhan may at its discretion pass necessary journal entries for transferring balances available in the Clients broking ledger to the MTF ledger and vice versa.
   4. The Client understands that the positions will be permitted to be allowed/continued upon fulfillment of the necessary margin requirements as specified by Sharekhan for the particular scrip from time to time. The Client agrees that though presently there is no maximum time limit prescribed by Sharekhan for keeping the positions open, however, Sharekhan reserves the right at its discretion to stipulate a maximum time within which Client will have to take the delivery thereof.
   5. The Client agrees that there can be a short delivery of securities from the Exchange. For such transactions, the Exchange would either give delivery of shares through market auction or shall closeout the buy transactions as per the Exchange Regulations. All costs and consequences, if any, arising out of such auction or close out shall be fully borne by the Client and Sharekhan would not be held responsible for any such short delivery received by the Client and the consequential impact thereof.
   6. The Client agrees that Sharekhan may at its discretion, in accordance with its risk management policy, disable trading in certain securities in MTF and square off all open positions in such scrip which are not converted to delivery irrespective of margin availability. Client agrees that Sharekhan cannot be held liable for any losses arising out of such disablement or squaring off of such security.
   7. Sharekhan shall calculate interest on the MTF facility balance at the end of each day upto 18% per annum (compounded monthly), on daily outstanding MTF facility balance. In case there is an upward revision in the rate of interest Sharekhan may communicate the revised rate of interest to its Clients. The Client agrees and undertakes to pay interest thereafter at such rate as mentioned in the communication sent by Sharekhan. Deduction of TDS on interest paid / payable (if applicable) is responsibility of Client. On intimation Sharekhan shall provide due credit to Client ledger for TDS on interest paid by Client.
   8. The Client understands that under MTF, Client would not be able to take further positions and/or existing positions may be squared off by Sharekhan at its discretion on occurrence of any of the following events :
      
      
      1. If at any point of time total exposure across all securities of all the Clients of Sharekhan taken together under this facility exceeds the SEBI / Stock Exchange prescribed maximum allowable exposure limit specified for a stock broker. Client agrees that Sharekhan may set this limit at its discretion which can be lower than the limits prescribed by SEBI/Stock Exchanges as part of its risk management process.
      2. If the Client position exceeds or is about to exceed the maximum allowable exposure for a single Client. Client understands that SEBI/Stock Exchanges has prescribed a maximum limit for allowing exposure to a single Client. Client agrees that Sharekhan may set this single Client exposure limit at its discretion which can be lower than the limits prescribed by SEBI/Stock Exchanges as part of its risk management process.
      3. If the total exposure in a particular security of all the Clients of Sharekhan taken together under this facility reaches the maximum allowable limit for that stock as per discretion of Sharekhan.
      4. If the exposure in a particular security by a single Client under this facility reaches the maximum allowable limit for that security for a single Client as per discretion of Sharekhan.
      5. If the stock moves out from the list of eligible stocks under MTF and becomes ineligible for offering under MTF.
      6. Any other circumstances due to change in regulatory requirements from time to time or risk management process due to changing market conditions.
      7. In the event of death or insolvency of the Client or the Client otherwise becoming incapable of receiving and paying for or delivering or transferring. Further, any action to liquidate the securities shall be binding upon the heirs, successor, and representative of Clients.
   9. The Client understands that Client is required to disclose whether the Client is a promoter or forming part of the promoter group of the stock in which Client has taken MTF position or stock which is given as collateral at the time of taking position under MTF. If no communication received from Client at the time of order placement, then Sharekhan shall presume that Client is not promoter or forming part of the promoter group and accordingly, while reporting MTF details to Exchanges, Sharekhan will be reporting that Client as non promoter.
   10. The Client further declares and confirm that all the powers vested in favour of Sharekhan under the power of attorney granted by the Client with respect to broking account shall be applicable for the MTF facility and Sharekhan shall be authorized to exercise all the powers as prescribed thereunder in order to protect its rights/interest under the MTF facility.
   11. The Client confirms that the Client is aware that any changes in the terms and conditions shall be posted on the website of the company from time to time and that it shall be the duty of the Client to go through the website and update himself of any changes therein. The continued use of the MTF by the Client shall be deemed to be an acceptance by the Client that he has read and understood the modified/altered terms and conditions.
   12. The Client agrees and understands that the Client shall, at all times, be responsible for the Client's investment decisions and/or orders placed, or applications preferred by the Client, either electronically or otherwise. Sharekhan shall not be deemed to have received any electronically transmitted order or application until Sharekhan has confirmed the receipt of such an order or application. The Client further understands that trading through our website or other trading platforms provided by Sharekhan 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. The Client understands and agrees that although these problems may be temporary in nature, in case when the Client has outstanding open positions or unexecuted orders, these represent a risk because of the Client's obligations to settle all executed transactions. The Client understands that placing an order with Sharekhan, either electronically or otherwise, does not guarantee execution of the said order or acceptance of an application. The Client shall not hold, nor seek to hold, Sharekhan and/or any of its officers, directors, employees, agents, subsidiaries or affiliates, liable for any loss including but not limited to trading losses incurred by the Client due to exchange or market regulation, suspension of trading, war, strike, equipment failure, communication line failure, system failure, security failure on the Internet, unauthorised access, theft, or any problem, technological or otherwise, or other condition beyond the control of Sharekhan that might prevent the Client from entering an order or Sharekhan, from executing an order. Accordingly, Client shall not raise any dispute with Sharekhan due to above mentioned circumstances and Sharekhan shall not be liable to client for any loss or damage which may be caused to the Client as a result.
   13. Repayment on demand: Notwithstanding anything contained herein, any amount funded under MTF shall be repayable on demand at the sole discretion of Sharekhan. The Client undertakes to repay the MTF balance forthwith on demand by Sharekhan.
7. Deactivation of the Margin Trading facility:
   After the receipt of the consent from the Client, MTF facility shall remain activated for the said Client account till the same is deactivated by the Client by intimating Sharekhan of his unwillingness to continue with the same. Intimation may be communicated either by email through the registered email id or by a letter in writing addressed to Sharekhan. The MTF facility will be deactivated post settling all dues by the Client pertaining to positions under MTF.
8. Enforcement of Security:
   If Client has failed to perform and/or failed to fulfill any of its engagements, commitments, operations, obligations or liabilities as a Client of Sharekhan including for any sums being due by him to Sharekhan arising out of or incidental to any Transactions made, executed, undertaken, carried out or entered into by it or in terms of regulations, laws, rules governing Sharekhan or the Client in this behalf, then the Client agrees that Sharekhan without giving any notice to the Client except through the margin call process as mentioned in these terms in relevant sections, shall be empowered/entitled to invoke pledge, sell, dispose of or otherwise effect any transfer of any or all of the Margin Securities in such manner and subject to such terms and conditions as it may deem fit and that the money realized, if any, from such sale/disposal/transfer subject to dues payable to Sharekhan for such sale/ disposal/or other transfer shall be utilized/disbursed by Sharekhan in such manner and subject to terms and conditions as it may deem fit. Further, the Client shall do all such things, deeds, acts and execute all such documents as are necessary to enable Sharekhan to effect such sale/disposal/ transfer. All decisions by Sharekhan in respect of the obligations or liabilities or commitments of the Client and the amount claimed in respect thereof shall be binding on the Client. The Client agrees that Sharekhan shall not be under any liability whatsoever to the Client or any other person for any loss, damage, expenses, costs etc, either actual or notional, consequent to such sale/disposal/ transfer.
   
   If the total amounts realized from such sale/disposal/transfer is insufficient to fulfill the Client's engagements, commitments, operations, obligations or liabilities in entirety, the Client shall, forthwith and without demur, upon being requested by Sharekhan, furnish the balance amount together with interest at such rate as decided by Sharekhan and for costs and expenses from time to time.
   
   The Margin Securities shall be at the disposal of Sharekhan and remain available in respect of the obligations, liabilities or commitments of the Client and may be utilized with the discretion of Sharekhan. The client understands and agrees that Sharekhan shall be entitled to modify/alter/update the said FAQs and such a change shall be displayed on the website. The continued use of the Facility by the Client shall be deemed to be an acceptance by the Client that he has read and understood the modified/altered FAQs.