Management of Credit Risks
Trading and Exposure limits are generally granted based on the quantum of funds/securities of the client
maintained as margin. For positions in Futures and Options segment it is ensured that adequate initial margin and gross exposure margin is collected from the clients upfront and in case of Capital Market
segment trading limits are given based upon the client’s risk profile and payment history Whenever there is a deficiency in the margins or there is a Mark to Market settlement Obligations to be
met, the client is required to replenish/arrange for payment of the same filing which the client’s open
positions and/or collaterals may be squared off and liquidated respectively at S.I.’s discretion. In case
of outstanding dues arising out of square-off of open positions S.I. may also initiate legal proceedings.
Management of Settlement Risk
We ensure that receipt of funds/securities are from the bank/demat accounts of the clients and
payment of funds/securities is effected to the bank/demat account of the client.
Management of Surveillance related Risks
We have in place adequate surveillance controls in order to ensure there are restricted/no dealings in
illiquid scrips. We also have in place various surveillance criteria which are able to detect transactions
which may be in the nature of synchronized deal/matched deals/suspicious nature. We exercise
adequate controls.
Systemic Risks
We endeavor to provide uninterrupted trading to the client for which we ensure to the extent possible
that in case of any technical fault at our dealing offices, the client has access to the nearest Branch /
Regional Hub for executing its transactions.
Our dealers are specifically instructed to place orders as per the instructions of the client and
transactions are confirmed to the client through voice recorded lines/ email/ SMS apart from issuance of
contract note. Further we also provide monthly/quarterly ledger statements to the client.
The clients are also provided secured access to their account related information like transaction
summary, margin requirements etc on continuous basis in order to give them a bird’s eye view of the
trading account.
Summary
The above policy is implemented on ongoing basis with a view to have maximum transparency in our
dealings with the client.
Shanu Investment
DORMANT A/C POLICY
Definition of Dormant/Inactive Account
In case of trading account if a period of 1 calendar year (for Shanu Investment herein after
known as S.I.) elapses from the date of last transaction, such account will be deemed as
Dormant/Inactive Account.
In case of Demat account where no debit transaction has taken place for a continuous period of 1
calendar year, such account will be deemed as dormant/inactive account.
Transaction in Dormant/Inactive Trading Account
The dormant/inactive account identified, based on the above criteria shall be flagged as such in
S.I.’s record. S.I. reserves the right to freeze/deactivate such account and shall not allow
carrying‐on of any long open position in such account.
Treatment of Credit balance of Funds/Securities in Dormant/Inactive Account
If there is any credit balance of funds/securities in dormant/inactive account, it shall be returned to
the client intimating them that their account has been frozen/deactivated. In case no contact could
be established with the client, such funds will be retained till such time S.I. hears from the client
or their representative. Trading in such account is suspended.
Debit Transaction in Dormant Demat Account
The Demat accounts wherein no debit transaction has taken place for a continuous period of 1
calendar year shall be flagged as dormant/inactive accounts. Additional due diligence would be
observed over and above the normal verification procedure while processing any debit transactions
in such accounts. The transaction shall also be verified with the BO in case of high value debits and
the details of the process, date, time, etc., of the verification on the instruction slip shall be
recorded under the signature of a senior official.
The above stated policy may vary depending on various rules, regulations and bye laws as may be
prescribed by SEBI / FIU, Exchanges or any other authority and as per the internal policy of S.I.
from time to time. This policy for dormant accounts is over and above the transaction monitoring in
Dormant Account as per Monitoring in Dormant Account according to Anti‐Money Laundering
Policy of the Company.
Reactivation of Dormant/Inactive Account
The client is required to submit a request for re‐activation stating that no material change has
taken place in respect of the details provided initially at the time of account opening along with the
relevant documents as may be mandatorily required in this regard.
The dormant/inactive account will be reactivated after receiving of any written intimationregistered
letter/email or verbal intimation i.e. recorded telephonic conversation. Such an account
will be reactivated only after undertaking proper due diligence process and fulfillment of such
conditions as may be deemed fit.
Anti Money Laundering (AML) & Anti Terrorist
Financing (ATF) Policy
Overview
Description: In view of the Prevention of Money Laundering Act, 2002 (PMLA)
which was brought into effect from 1st July 2005, this Policy is issued to comply
with the provisions of PMLA and rules, regulations, guidelines issued thereunder.
Purpose: The purpose of this policy is to set internal rules and procedures for
preventing and combating money laundering and terrorist financing and reporting
suspected money laundering transactions.
Failure to Comply: Failure to comply with this Policy may result in disciplinary
actions up to and including termination of employment for employees or
termination of contracts for volunteers, contractors, partners, consultants, and
other entities. Legal actions also may be taken for violations of applicable
regulations and laws.
Policy
A. Reporting of Certain Transactions
1. The following transactions shall be reported immediately to Mr.
………….., Principal Officer:
i. All cash transactions of the value of more than Rs 10 lakhs or its
equivalent in foreign currency.
ii. All series of cash transactions integrally connected or transactions
remotely connected or related to each other which have been
valued below Rs 10 lakhs or its equivalent in foreign currency
where such series of transactions take place within one calendar
month.
iii. All suspicious transactions whether or not made in cash and
including, inter-alia, credits or debits into from any non monetary
account such as d-mat account, security account maintained by
us.
B. Customer Identification & Verification
1. Verification of names of customers in updated list of individuals and
entities subject to various sanction measures of UN Security Council
Committee, other publicly available information and complying with
Government order UAPA and verification of sources of funds and
wealth of clients identified as PEP.
2. Further at the time of opening a customer’s account sufficient
information should be obtained in order to identify and verifiy the
persons who beneficially own or control securities account. Following
documents shall be obtained from a customer for his identification:
i. PAN
ii. Proof of Address – Voter Identity Card / Electricity Bill / Telephone
Bill / Ration Card / Bank Statement.
iii. Bank Account details.
iv. Passport size photographs.
3. In case the customer is a person other than individual, all the
requirements under 1 shall be complied with for the customer as well
as for the person authorised to conduct transactions on behalf of the
customer. In addition a copy of document defining constitution, eg.
MOA & AOA in case of companies, shall be obtained.
4. The documents obtained from the customer under B shall be properly
verified.
5. Each original document must be seen before acceptance of a copy.
6. In-person verification of the customer shall be done by one of our staff.
7. No account shall be opened if the person has some criminal
background or if he has been banned under some civil or criminal
proceedings by any enforcement agency worldwide or if there is any
suspicion regarding the same.
8. No account shall be opened in a fictitious / benami name or on an
anonymous basis.
9. No account shall be opened in cases where:
i. it is not possible to ascertain the identity of the client
ii. information provided is suspected to be non genuine
iii. perceived non co-operation of the client in providing full and
complete information
and such cases shall immediately be reported to Mr. ……..
C. Customer Categorisation
1. Following categorisation of the customers shall be done on the basis of
number / value of transactions of the customer:
i. High Risk Customers:
a) where the value of a single order exceeds Rs.50,00,000;
or
b) where the funds received from a client in a month are
more than 100% of his proportionate income for the
month (based on the yearly income as mentioned by him
at the time of registration).
ii. Medium Risk Customers:
a) where the value of a single order is between
Rs.20,00,001 - Rs.50,00,000; or
b) where the funds received from a client in a month are
between 80% - 99.99% of his proportionate income for
the month (based on the yearly income as mentioned by
him at the time of registration).
iii. Low Risk Customers:
a) where the value of a single order is between
Rs.10,00,001 - Rs.20,00,000; or
b) where the funds received from a client in a month are
between 60% - 79.99% of his proportionate income for
the month (based on the yearly income as mentioned by
him at the time of registration).
2. Reporting of all the above three categories shall be done to the
Principal Officer.
3. The Principal Office shall investigate the matter and take appropriate
steps.
D. Clients of Special Category (CSC)
1. Such clients include the following:
i. Non resident clients
ii. High networth clients
iii. Trust, Charities, NGOs and organizations receiving donations
iv. Companies having close family shareholdings or beneficial
ownership
v. Politically exposed persons (PEP) of foreign origin
vi. Current / Former Head of State, Current or Former Senior High
profile politicians and connected persons (immediate family,
Close advisors and companies in which such individuals have
interest or significant influence)
vii. Companies offering foreign exchange offerings
viii. Clients in high risk countries (where existence / effectiveness of
money laundering controls is suspect, where there is unusual
banking secrecy, Countries active in narcotics production,
Countries where corruption (as per Transparency International
Corruption Perception Index) is highly prevalent, Countries
against which government sanctions are applied, Countries
reputed to be any of the following – Havens / sponsors of
international terrorism, offshore financial centers, tax havens,
countries where fraud is highly prevalent.
ix. Non face to face clients
x. Clients with dubious reputation as per public information available
etc.
2. The above list is illustrative and not exhaustive and it may include
other clients also based on criticalness of their status.
3. The identity of CSC and the purpose of intended nature of relationship
shall be satisfactorily established by using reliable sources including
documents / information.
4. Each original document must be seen before acceptance of a copy.
5. If a client has subsequently found to be or obtained the status of CSC,
the approval of senior management shall be obtained to continue the
business relationship with the client.
6. The source of fund of CSC shall be properly verified.
E. Transaction Identification
1. The identity of beneficial owner of the customer and / or person on
whose behalf a transaction is being conducted shall be verified.
F. Transaction and Account Due Diligence
1. Ongoing due diligence and scrutiny of the transactions and accounts
shall be conducted throughout the course of business relationship with
the customers to ensure that the transactions being conducted are
consistent with our knowledge of the customer, its business and risk
profile, taking into account, where necessary, the customer’s source of
funds.
G. Transactions on behalf of other
1. Under only following circumstances other person client may be
authorised to conduct transactions on behalf of the cleint:
i. If he has registered Power of Attorney from the individual client
(however the client must be consulted over phone before allowing
such transactions).
ii. If he is authorised as such by an entity through a board resolution.
iii. If he is authorised as such by any order of government.
2. Adequate verification shall be carried out of customer’s authority to act
on behalf of other person / entity.
3. The transaction limit in such cases shall be Rs.1,00,000 in a single
order or Rs.20,00,000 for value of all transactions in a day. In case of
transactions over such amount additional authority shall be required.
H. Record Keeping
1. Records of client shall be maintained so as to allow reconstruction of
individual transactions (including the amounts and types of currencies
involved, if any). Following record shall be maintained:
i. the beneficial owner of the account
ii. the volume of the funds flowing through the account
iii. the origin of the funds
iv. the form in which the funds were offered or withdrawn, e.g. cash,
cheques, etc.
v. the identity of the person undertaking the transaction
vi. the destination of the funds
vii. the form of instruction and authority
viii. transactions as specified under A above
ix. for transactions specified under A above following information
shall also be maintained and preserved:
a) the nature of the transactions
b) the amount of the transaction and the currency in which it
denominated
c) the date on which the transaction was conducted; and
d) the parties to the transaction.
2. Such records shall be maintained for a period of 10 years from the
date of cessation of the transactions with the client.
I. Monitoring of Transactions
1. All complex, unusually large transactions / patterns which appear to
have no economic purpose shall be immediately reported.
2. Any suspicious transaction shall be immediately reported. Following is
an illustrative and not exhaustive list of circumstances which may be in
the nature of suspicious transaction:
i. Clients whose identity verification seems difficult or clients
appears not to cooperate
ii. Asset management services for clients where the source of the
funds is not clear or not in keeping with clients apparent standing
/business activity
iii. Clients in high-risk jurisdictions or clients introduced by banks or
affiliates or other clients based in high risk jurisdictions
iv. Substantial increases in business without apparent cause
v. Unusually large cash deposits made by an individual or business
vi. Clients transferring large sums of money to or from overseas
locations with instructions for payment in cash
vii. Transfer of investment proceeds to apparently unrelated third
parties
viii. Unusual transactions by CSCs and businesses undertaken by
shell corporations, offshore banks /financial services, businesses
reported to be in the nature of export-import of small items
3. If some transaction is aborted / cancelled by the client on being asked
to provide some documents / information, it shall be reported
immediately.
4. While such reportings are done no tipping off shall be done i.e. the
client shall not be informed of any such reportings made.
5. The transactions of a client shall not exceed the limits set for such
client.
J. Co-operation with law enforcement authorities and timely disclosure ofinformation should be made.
K. Compliance with statutory and regulatory requirements and Reportings
All the statutory and regulatory requirements as required above shall be
complied with and in case of non-compliance all reportings shall be done to
designated Principal Officer Mr. ……, Compliance Officer, Shanu Investment,Gorakhpur; Tel:
L. Duties of Principal Officer
Principal Officer of the company shall at all times be responsible for
a. Monitoring the implementation of Anti Money Laundering Policy
b. Reporting of transactions and sharing of information as required under the
Law
c. Liasoning with law enforcement agencies
d. Ensuring submission of periodical reports to Top Management. The monthly
compliance report shall henceforth mention if any suspicious transactions
are being looked into by the respective business groups and if any reporting
is to be made to the authorities
e. Providing clarifications to staff members on the provisions of the Act, Rules,
Guidelines and the policies of the company.
M. Rights & Powers of Principal Officer
Principal Officer at all times possesses the powers and shall exercise its right
to:-
a. access customer identification data and other CDD information
b. report to Senior Management or the Board of Directors in case of any noncompliance
observed by him
c. investigate the matter of suspicious nature and take necessary steps or action
as may be required for the same
N. Review of the Policy
1. This Policy shall be reviewed from time to time to ensure the
effectiveness of the same. The reviewed policy once circulated shall
override the present policy. |
