1. Introduction

Ashika Stock Broking Limited is a member of the National Stock Exchange, Bombay Stock Exchange, MCX, NCDEX, MSEI and ICEX in the Equity, Equity Derivative Segment, Currency Derivative Segment, and Commodity segment having its registered office at Trinity, 7th Floor, 226/1 AJC Bose Road, Kolkata – 700 020.

For this policy and procedure, wherever the context so mentions “Client”, it shall mean any natural person or legal person who has agreed to open an account or initiated the process of opening an account with us by providing their information.

RMS stands for Risk Management System – To manage the risk of the company from the volatility of the market. Risk is inherent in all aspects of a commercial operation, however for a stockbroker; risk is an essential factor that needs to be managed. Risk emerges from the ground that the client inspite of execution of trades/ due to market volatility, has failed to make payment of required margin / outstanding dues/ replenishment of collateral as stock on time.

2. Definitions & RMS Concepts

Active Clients: Includes those clients who are trading regularly / frequently with no trading gap for more than 12 (Twelve) months along with those who have opened their trading account within the given period.

Inactive Clients: Those clients with no trade for a consecutive period of 12 (Twelve) months shall be treated as inactive.

Available Fund: The clear credit balance available in the client’s ledger as per our books.

Available Margin: Positive summation of Ledger balance + Margin pledge benefit.

How do we pledge stock for margin benefit? There are two options from where client can pledge the stock for the margin benefit.

1. Client level Mobile / Web Backoffice App – Login to the mobile / web back-office software of Ashika and click on STOCK MOVEMENT option to pledge the available free stock lying in the Demat Account maintained with us.On the stock movement page, the available free stocks that can be pledged are visible. Client must confirm the quantity and click on submit button. Once submitted, the Client will receive a link from the respective depository viz. CDSL/NSDL on the registered SMS and EMAIL ID. Client must click on the link and select the stocks to confirm for pledge and generate OTP. On submission of the OTP, the stocks will be marked as pledged stock in BackOffice, and the margin benefit will be given immediately for trading.
2. Dhanush – Mobile Trading App – Login to the Dhanush Mobile trading app and navigate to the Holding page. Click on the “Pledge” option on the holding page. When you click on the “Pledge Option,” you will be prompted to click on the Submit button. After submission, it will display the stock and quantity to be committed. Select the stock and confirm the quantity to be pledged before clicking the pledge button at the bottom. After that, it will redirect to the depository page, where the customer must confirm the OTP (which will be sent to the registered mobile and email address). Once the OTP is confirmed, the shares are successfully pledged.
3. What is CUSPA Stock? This means Client Unpaid Securities Pledge Account. As per SEBI circular SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2022/153 dated 11th Nov 2022, new rule has come in force for the unpaid securities. The new rule is summarized below.

Regarding the unpaid securities (i.e., the securities that have not been paid for in full by the clients on T Day), such securities shall be transferred to respective client’s Demat account followed by creation of an auto-pledge (i.e., without any specific instruction from the client) with the reason “unpaid”, in favour of a separate account titled – client unpaid securities pledgee account (CUSPA) on T+1 day.

Setting up Client Exposure Limit: The limit shall be provided as per the availability of the margin. In case of cheque, the limit shall only be given upon clearance only. No limit will be given on the CUSPA stock.

3. Categorization Of Client Orders

For operational ease, all orders have been categorized into 6 (Six) different categories enabling clients to avail diversified exposure. For availing such benefit, the respective client must be precise with the given category while executing trade through a dealer. The categories are enumerated below:

MARGIN – Normal Order – wherein a client is eligible to trade upon adequacy of applicable margin (EOD and Peak). Any stock bought under “Margin” must be paid on or before 11 A.M. on T+6th day either by transferring funds or by selling shares else RMS will square it off by 01:00 P.M.

Exclusion: Clients will not be allowed to do short sell in MARGIN option.

CNC – Delivery stocks marked as CNC – This order type is used to sell delivery marked stock to avoid the usage of available margin. In addition, the client needs to use this option to buy/sell X/M/T/Z/BE/GSM/ASM series stocks as per the available fund. MTF Holding/ DP holding /pledged margin stock to be sold marked as CNC only.

INTRADAY – Applicable for clients intends to do intraday trades only. Limit will be provided as per margin availability of the client. In case the outstanding positions are not square up by the client, the “intraday” trades will automatically square off by RMS at 3.20 P.M. Moreover, system will automatically liquidate the positions in case the MTM triggers to 80% of the available Margin at any point of time.

Short sell is allowed in this product type for eligible stock groups.

MTF – This means “Margin Trading Facility” and can be used by the client to avail funding from the broker. Client will get limit on the available margin and as per stock wise margin requirement. *** MTF can be availed only on specified securities i.e. Category I shares as envisaged by SEBI. MTF funding on single stock in not propagated i.e., clients are required to have at least 3- 5 stock (category 1) in his basket.

CO – Cover Order – This order comes with “stop loss” and hence named as such. As the name suggests, keeping stop loss is mandatory for execution of trades under this category. For the comfort of the client, stop loss range can be viewed and fixed at his end. Under this product, limits would be granted upon the availability of the Margin as applicable on the scrip to be traded. Short sell is allowed in this product type only for eligible stocks.

All positions taken under “Cover Order” will be squared off at 3:20 pm by RMS if stop loss is not achieved or squared up by the client.

BO – Bracket order – applicable for intraday trades only – In this type of product, orders can be placed with “Target” and “Stop Loss” simultaneously. Upon execution of Initial order, system will auto generate two orders i.e. “Stop Loss” & “Target” simultaneously. Likewise, upon execution of any of those pending orders i.e. “Stop Loss” or “Target”, the other pending order will be auto cancelled. Hence the option of ascertainment of target along minimisation of probable loss is the striking feature of this product. Short sell is allowed in this product type for only eligible stock groups.

Positions taken through Bracket orders cannot be converted and carried forward. The RMS team will square off all pending positions taken through Bracket Orders by 3:20 PM.

4. T+6 Policy & Process

Kindly refer to SEBI circular no. CIR/HO/MIRSD/DOP/CIR/P/2019/75 dated 20.06.20219 -Accordingly, below mentioned is the process we follow for the T+6 debit codes:

Shares bought and not paid on T Day, then the shares go to CUSPA as per the Sebi guidelines. In case the client does not pay for the shares bought on T Day, then on T+6 day we liquidate those shares pledged marked in CUSPA. The process which we follow to liquidate is as follows:

STEP 1 :
On T+4th day (beginning of trades) running debit will be intimated to client via email. Similarly, by EOD another intimation of the running debit will be given to clients. Running debit for the aforesaid purpose means running debit beginning from debit of “T” day.

STEP 2 :
Trading code will be blocked for further trading (except sale of existing positions) on T+1+4th day till the clearance of running debit balance. Similarly, by EOD another intimation of the running debit will be given to clients.

STEP 3 :
Trading code will continue to be blocked for further trading (except sell of existing positions) on T+1+5th day till the clearance of running debit balance. Additional option towards clearance of debit balance (through sell/payment) will be given till 11 am; else the position/shares will get liquidated by RMS team by 2 pm to the extent of the debit balance in the ledger.

Note – In case of sell on T+1+5, stock pledged in CUSPA a/c resulting credit in the client ledger, the same shall be eligible for further exposure to the extent of 80% of the excess sell/credit provided EPI has been done, excluding the scrip wherein the sell has taken place.

5. MTF Policy

MTF – This means Margin Trading Facility and can be used by the client to avail funding from the broker. Client will get limit on the available margin and as per stock wise margin requirement. MTF is not available on all stocks, could be availed only on specified list of securities (Category 1 Shares only) as envisaged by SEBI and Ashika. Client must have at least 3- 5 stock (category 1) in his basket, MTF funding on single stock in not propagated.

Line of Caution – If the client fails to maintain the requisite margin for consecutive T+4 days in sync with duly executed MTF rights and obligation, on T+5th day, RMS will dispose of the funded shares at 12.30 P.M to the extent of Margin Shortfall. The discretion to sell the shares i.e scrip and quantity rests with the RMS team. Stocks sold as above shall be compulsorily marked as MTF only.

OTP Confirmation for Pledge of MTF stocks: In case of MTF Trades, Client will be sent a link for Advance Pledge Confirmation for the trades done in MTF product same day in the evening. Validity of the link will be T+1. In this case, client must compulsorily confirm the MTF pledge request on the same day or else the shares bought under MTF product will be liquidated on T+1 day at 12.30pm without any further information to the client. This process will be followed on daily basis.

6. Our take on Client Demat Holding

DP Stock means the stocks that are lying in the respective Client Demat Account maintained with us. No limit shall be given unless the same are marked as “Margin Pledge”.

7. Inactive/Dormant Account Policy

If the client trading code is marked as Inactive/Dormant for non execution of any trades irrespective of Exchange and Segment in preceding one year and where the client is coming for reactivation after a period of 1 year of being flagged as inactive, the client code can be activated for trading only after obtaining requisite application and updated information related to KYC along with the proper conduct of IPV (In-Person Verification) as mandated by the exchanges in sync with their recently issued circulars in the month of December 2020 and clarification issued in the month of September 2021.

However, in case a client has undertaken transaction through the Member, with respect to IPO/Mutual Fund subscription and DP operations during this period, the same can be considered and the requirement for fresh documentation, due diligence, and IPV may not be required.

Further, in the below mentioned conditions, as stipulated in SEBI circular dated April 24, 2020, bearing reference number SEBI/HO/MIRSD/DOP/CIR/P/2020/73, the requirement for undertaking an IPV shall not be required :-

• Where the respective client’s KYC is completed using the Aadhaar authentication / verification of UIDAI.
• When the KYC form has been submitted online, documents have been provided through Digi locker or any other source which could be verified online.

Notwithstanding anything contained above, in case a client seeks re-activation before a period of 1 year of being flagged as inactive, ASBL shall, while reactivating the client, ensure that the basic details of such client like Address, Mobile number, Email ID, Bank/DP account are updated in its records as well in the UCC records of the Exchange. In case of any changes, necessary documents shall be collected and updated (wherever required).

For operational ease and propagation of the usage of technology, client can submit “online reactivation request” using the REKYC option available on our website by using link: https://newaccount.ashikagroup.com/re-ekyc/ or using the Ashika Backoffice Mobile App.

8. Limit & Square Up Policy

Cash Segment –

• Limit will be provided on the available margin and on the applicable margin (after applicable
  haircut) of the respective stock. Upfront margin is required for all types of trades.
• Net valuation is calculated by applying appropriate haircut based on VaR margin percentage
  specified by the exchanges or Ashika prescribed rates, as the case may be.
• Exposure would be granted only on cleared funds. In case of receipt of cheque, limit would be granted only upon clearance.
• No limit will be provided on the shares lying in the respective client DP a/c and also on trade to trades stock.
• No limit will be provided on shortage of margin.
• No further exposure/ limit will be given if overall margin is below 30%. I.e., no fresh buying will be allowed.
• No fresh buying limit shall be given on the same day upon the sell of shares lying in the respective Client Demat holding. Limit shall be provided only on next working day.

Derivative Segment (F&O, Currency, and Commodity) –

• 100% of the total applicable margin will be required as upfront margin including intraday trades.
• No limit will be given in case of shortfall of margin.
• At any point of time if the MTM on the open position exceeds 80% of the available margin, then the open position will get liquidated by the system automatically.
• Any Intraday FO position will be auto square off at 3.20 pm by the system.
• Any intraday Currency Position will be auto square off at 4.45 pm by the system.
• Any intraday Commodity Position will be auto square off at 11.15 pm by the system.
• M2M credit benefit will be provided for next day trades only.
• In case of liquidation of the long open call/put option, the limit will be given for the proceeds on the next day.
• No limit in case of 100% pledged share as collateral, there must have cash margin available with us.

9. Surveillance Alerts

Definition– Alerts are being defined as transactions under surveillance, generated both internally as well as provided through exchanges. Ashika Stock Broking Ltd. (ASBL) will be scrutinizing alerts as received and accordingly will act as per their discretion in the matter. The justification/rationale behind execution of trades may be forwarded to the clients who in turn are required to provide their response within three working days of the receipt of such alerts, else will be presumed that they have no response to offer. In such a scenario, ASBL may proceed as deemed fit.

ASBL in compliance to the recently issued circulars of the exchanges shall prepare and submit quarterly MIS on the details of alerts acted upon within 15 days of the closure of respective quarter.

ASBL has procured dedicated software to enable it to scrutinise and close twelve different scenarios as envisaged by the exchanges. Compliance Team shall ensure that all the alerts are analysed and processed within 45 days from the date of alert downloaded (exchange as well as internal alerts). The recently propagated scenarios are as below :-

• Client / group of clients, as identified by the trading member, accounting for a significant percentage of the total trading activity in a scrip / contract as compared to the market.
• Client / group of clients with new account or clients dealing after a significant time gap, as identified by the trading member, accounting for significant value / percentage of total trading activity in a scrip / contract as compared to the market.
• Client / group of clients dealing frequently in small quantities / minimum market lot in a scrip / contract.
• Disproportionate trading activity vs reported income / Net worth.
• Frequent changes in KYC submitted by clients.
• Based on an announcement by a listed company, identify client / group of clients, having possible direct / indirect connection with a listed company, who have undertaken any suspicious trading activity prior to price sensitive announcement by said listed company.
• Client / group of clients having significant selling concentration, in the scrips, forming part of ‘For Information list’ or ‘Current Watch list’.
• Consistency in profit / loss at client / group of clients’ levels, rationale for such trading activities.
• Significant trading activity in scrips by client who has pledged the shares of same scrip.
• In case of concerns of trading activity of a client / group of clients in scrip, monitoring whether the orders are being placed by respective clients or their authorized representatives and monitoring client’s address as per KYC vis-a-vis the dealing office address.
• Significant trading activity in scrips where client has pledged shares or has significant holding or has frequent off-market transactions.
• Surveillance / monitoring of IP addresses of clients (including identification of multiple client codes trading from the same location).

The above guidelines are illustrative and not exhaustive.

Queries / Clarifications / documentary requirements as solicited would be solely based upon the scrutiny of alerts by the respective officer of the compliance department. The clients are required to arrange for the clarification/documents in sustenance of their response in sync with the requirement.

All correspondence in this regard shall be made through a dedicated email i.e., compliance@ashikagroup.com. The Compliance Officer shall have the final authority to decide on the reporting of alerts to FIU.

10. Policy on voluntary freezing/blocking of the Online Trading Account

The given policy has been formulated by Ashika Stock Broking Limited (ASBL) for voluntary freezing of trading accounts of its IBT Client – (Internet Based Trading) in accordance with SEBI & Exchange Circulars. The given policy aims to guide Ashika IBT clients on the process, modes, timelines, and other details for facilitating the voluntary freezing of their trading accounts upon noticing any suspicious activity. The given policy would be reviewed on half yearly basis or upon issuance of revised circulars from the Exchanges and Regulator.

The following procedure would be followed by ASBL to Freeze Online Trading Account upon specific request from the respective client.

1. Usage of Email

   The clients can issue email at stoptrade@ashikagroup.com. Such emails could be issued anytime during the working hours. Requisite action for freezing the trading account will be done only upon receipt of email from the designated email id registered with ASBL.

2. Calling on a Dedicated Support Line:

   The client can call on 033-40102590/033-40102525 during the working hours to place a request for freezing their internet based trading accounts. The calls to be received from the designated registered no. of the respective client. To ensure proper authentication, the representative will verify the client’s identity and may be requested for additional information. Once verified, ASBL will freeze the internet trading account of the client.

Acknowledgement will be issued upon receipt of the above request. Simultaneously, the trading account will be frozen and all the pending orders will be cancelled for the said client. The timelines for freezing/ blocking of the online access of the clients’ trading account is as under:

• Within 15 minutes upon receipt of request during the trading hours and within 15 minutes before the start of trading.
• Before the start of the next trading session upon receipt of request received after the trading hours and 15 minutes before the start of trading.

Post freezing/blocking of the clients trading account ASBL shall send a communication on the registered email id of the client. Details of open positions (if any) will be communicated to the client along with contract expiry information within one hour through separate email.

Ashika Stock Broking Limited shall re-enable the online access of trading account only upon receipt of email request from the client. Such request has to be placed at stoptrade@ashikagroup.com along with the reason for reactivation of the same. ASBL shall accede to unfreezing requests after carrying out necessary due diligence at their end. In case of any adverse observation, the decision of ASBL shall be final and binding taken in the interest of the respective client.

11. Additional Points To Note

• As per company’s RMS policy, we maintain global margining reporting to the exchanges. Computation of any surplus/shortfall in the margin rests on the same.
• We would be considering the running debit (all segments & other charges) rather than the settlement debit for blocking further trades on T+5 & T+6.
• It is always advisable to make immediate payment on receipt of due intimation of T+1+5 debit or any margin shortfall sent on the registered mobile no and email id of the client. In case of any dues pending, irrespective of the segment for T+1+5, the given code would be blocked for further exposure. Further delayed payment charges to the maximum of 24% p.a. would be charged from T+1 till the recovery of dues.
• Risk is an inherit part of Market. In case of extreme market turmoil, RMS will have an absolute discretion to deal with the situation in the interest of the Market at large.
• No further exposure or limit will be given if overall margin is below 30%. I.e., no fresh buying will be allowed.
• The client can only sell X, T and Z category of shares in CNC mode only provided the same is available in his DP under POA provided to us.
• No short sell shall be allowed for new listing.
• In F&O, Currency, and Commodity- Collaterals are required to be maintained strictly in equal proportion i.e., 50:50 (Cash: Securities). Not applicable where in only cash collateral is provided.
• In F&O, Currency, and Commodity- in case where the 50% cash margin is not maintained by the client, then interest on cash margin shortage will be levied from the T Day with a maximum of 18% p.a.
• DPC / Interest will be levied from date of settlement i.e. T+1 in cash segment and T+1 in derivative, till the recovery of the same.

---

For call and trade, please take a note of our GLOBAL DESK numbers –
033 40102581, 033 40102551, 033 40102594

For any further clarification on above, one may contact the following official:
Name: Niraj Sarawgi
Mob: +91 9167616989
Email: nirajs@ashikagroup.com

Reviewed on 16.07.2024

Policy on voluntary freezing of the Online Trading Account (Version – 0.2)