Internal Policies :
 
Internal Procedure Policy

INTERNAL CONTROL, POLICY & PROCEDURES


1. Introduction

PRRSAAR a proprietorship firm, is a SEBI registered broker of the National Stock Exchange of India Ltd. (NSE) , Bombay Stock Exchange Limited (BSE) and MCX Stock Exchange Ltd (MCX-SX)

The firm has adopted various policies & procedures for internal control measures & tools for compliance of various Acts, rules & regulations of the Exchanges.

A. CLIENT REGISTRATION POLICY

The agreement along with the Know Your Client (KYC) and Risk disclosure document (RDD) should be signed by the client. The required documents should be collected from the clients strictly as per the documents mentioned in the checklist of the agreement book.

- Thorough checking by back office in charge including in-person verification, tallying the supporting documents with the original and interview of client.

- After Signature of the compliance officer on behalf of PRRSAAR the new Client Code is alloted

- Uploading the client details to the NSE/BSE/MCX-SX

- On receipt of Valid Report, Confirming the codes allocated to clients the same is intimated over telephone and Welcome Letter alongwith zerox copy of KYC along with documents received from the client is send to the client

- The KYC Filing of Client Registration Kit & updation of Index

- Periodical Review of financial data

- Deactivation of Client Code on receipt of written documents from Client.

- Intimation in writing to Client regarding deactivation of client code & reason thereof Walk in Clients: The firm has decided not entertain Walk In Clients. All clients / would be Clients are required to submit proper references or introducers

Financial Documentation: All clients are required to submit updated financial data, namely, their Balance Sheet, Salary Income Certificate. Incase of re-activation of UCC, the clients are also required to submit written request. Clients, specially operating in F&O Segment are compulsorily required to submit their latest financial position every year without fail.

Maker & Checker Concept: The firm appoints different person for checking CRF/data submitted by client and data entered in computer for uploading to master file & the Exchanges. Even after uploading of data, the compliance officer checks the data entered from the CRF. All blank spaces in the CRF is crossed by the compliance officer, if found not crossed by the client.

Marketing Division: The firm does not have any marketing Division

Closure of Client Accounts/ Dormant Accounts: Clients accounts are closed either by client himself or action initiated by the firm. On receipt of written request from the client, the deactivates the client code in its front & back office. CRF form is marked closed only after proper verification of client’s ledger account & clearance received from accounts department regarding dues & margin. Moreover written communication is also sent to client confirming closure of his account.

Client’s accounts are also closed on action initiated by the firm in the following cases:
  1. If client fails to meet his obligation within stipulated time or time provided by the firm
  2. If clients fails to provide proper documents as required under SEBI rules & regulations even after repeated request by the firm.
  3. If client is declared fugitive under any law in India or abroad.
  4. If client is declared insolvent under any law in India or any criminal cases are filed or pending and such information is not disclosed at the time of registration with the firm
Transfer of Client from one branch to another: The firm may on written request received from a client, may allow the client to place his orders through another branch with a written notice to both the branches and/or office memo through email. However, if the client has also signed tripartite agreement, the client will be asked to provide ‘no objection’ from the sub broker and ‘sub brokers’ confirmation in writing to such request.

In case closure of any branch, the written notice with one month period is required to be given to all client of the branch giving them option to place their order in future from any other branch or corporate/head office or closure of their account with the firm.

The firm also mark all inoperative client account as ‘dormant’ till the same is closed or reactivated after written request is received from the client. UCC allotted to closed account is not used for next five years for any other new client.

B. TRADING POLICY:

Active Client master list should be uploaded in the NEAT/BOLT trading terminal and all the orders from the clients should be checked for the client codes in the list. This will ensure minimal wrong code punching by the dealers.

Dealers should be vigilant in executing the orders of the client. They should check & report to senior authorities if any client is giving order of abnormal quantity or rates.

Every client should be contacted after the market hours for trade confirmation. The clients should be asked for the settlement of their obligation before settlement date of the exchange.

Every client must be attended by the staff allocated for the purpose and in his absence, compliance officer must ensure that client is attended by another dealer. Staff/ dealer should check the margin availability/credit limit of the client before executing any trade on his behalf.

No trades will be transferred to code other than entered in trading terminal after trading hours unless there is genuine mistake on part of the dealer of client mentioning the UCC at the time of placing the order. Transfer of code can be done only by the ‘compliance office’ during the allowable time frame by the exchange on system provided by it.

This step will help us to trace any discrepancies in the trade as well as timely receipt of cheques and securities from the clients and provide better service.

Contract Note:Contract note generation at Back office

We are sending contract notes to the clients on daily basis by emails. All the log file is preserved properly for verification and resolving any non-delivery issue with the client. [we are sending the contract note for returned/ or failure list on daily basis under Certificate of Posting through email after taking the necessary action. Daily reconciliation is prepared for contract Note generated / /sent/returned/ sent for better control & compliance.

PAYMENT POLICY:
  1. Payments to clients shall be made on Pay out basis i.e within 24 hours of pay out ( T+2 day) . Payment for outstation clients will be made on Pay-out basis on those branches where CMS facilities are available through HDFC/ AXIS bank. For other branches where CMS facilities are not available cheques would couriered to them from HO.
  2. For clients who are desirous of keeping the pay out money with us as margin money can do so by submitting a letter to that effect mentioning therein not to issue cheques until a written request is made. However, such request at a time will be valid for one financial year only.
  3. For clients who are desirous of keeping the pay out money with us for future transactions can do so by submitting a letter to that effect mentioning therein to keep their account as ‘running account’ and periodical cheques may be paid or received. However, the clients are required to neutralize their account once in ever three months of first transaction.
  4. Clients, who have debit balance in one segment and credit balance in other segment will be paid only if their net balance is credit.
  5. Margin Money to the clients will be returned only after adjusting debit balance, if any, in their account and/or if they have not defaulted in their obligation to deliver shares/securities.
  6. Payments to the clients will be directly deposited in their account if mandate is given by them to this effect and they have account in the same bank, where the firm has its account.
RECEIPT POLICIES
  1. Cheques from clients would be accepted only of those banks whose details have been provided during client registration.
  2. No third party cheques would be accepted.
  3. NO CASH PAYMENT IS ACCEPTED.
  4. The branches should mail the details of the cheques deposited directly to the bank at info@prrsaar.com. The branches/clients should ensure that the mails should be received by HO by 6 pm so that the benefit of the payment made by the clients can be posted to the ledger on the same day.
  5. Clients are advised not deposit any cash/cheque directly to firm’s account. If cheque is deposited then intimation should be given in writing along with pay in slips otherwise credit will not given to client till proper documents are received from client.
  6. For outstation branches , payments made by the clients would be not posted to the account of the clients unless HO receives credit for the same by the bank since outstation clearing cheque takes a period of 15-20 days to get cleared.
  7. Local Cheques received within 2 PM will be posted to the ledger on the same day. The effect of the cheques received beyond 2 PM would be given on the next day.
  8. High Value cheque received from clients must be deposited within stipulated time
MARGIN POLICY

Capital Market Segment
  1. No Purchase order will be entertained unless 10% upfront margin or credit balance is lying in the client account.
  2. If, margin is specifically exempted to any client by the management, the same should be in writing.
  3. Incase, where margin is exempted to any client, the payment must be received within 48 hours of the execution of the order or within 24 hours of delivery of contract note, whichever is earlier.
  4. Sale order will be executed only on delivery of shares to ‘Ben’ account’ before orders are executed unless management allows the shares to be sold before receipt of shares.
  5. Clients are advised not deposit any cash/cheque directly to firm’s account. If cheque is deposited then intimation should be given in writing along with pay in slips otherwise credit will not given to client till proper documents are received from client.
  6. On non delivery of shares in time due to fault of client, auction charges alongwith 10% extra fine will be payable by the client.
Future & Option Segment
  1. No trading will be entertained unless up front margin is received in advance for value of trade to be executed on behalf of any client.
  2. Margin will be accepted in ‘Cheque’ only unless management decides otherwise.
  3. If margin is accepted in the form of shares, a hair cut on and above 40% will be computed on the price at the day end. All short fall will have to be met immediately by the client in cash or before opening of next trading session, which ever is earlier. No letter or written communication in this regard will be sent to any client for shortage of margin. The client will be responsible for any shortage of his margin with us for his outstanding trades.
  4. No complain will be entertained for squaring off of outstanding trades or liquidating of margin by the management in absence of short fall of margin at any stage by the client. It will be sole discretion of the management to decide on ‘spot’ whether to square off outstanding trades of a client and margin be liquidated to meet the short fall.
  5. Any amount payable on account of ‘Mart to market’ has to be paid in cash by the client before opening of next trading session. Amount paid must be in the form of clear bank balance or high value cheques given on the day of trade. If clear balance of margin/ MTM are not available, the management will at its sole discretion square off the trades of any client, which in its opinion can put the firm or its other clients to unnecessary market risk.
  6. The firm reserves the right to liquidate a client’s position, if the client fails to maintain proper margin with the client. Further, firm also reserves the right to liquidate/neutralize a clients position in extra ordinary fall or rise in market price sensitive index, which in the opinion of the firm may have a bearing on the future survival of the firm and its business.
SECURITIES

Collection of securities
  1. To ensure that clients are delivering the shares from their own account and all the deliveries to/from the clients correspond with the details provided by the client with their registration.
  2. The statement should be checked with the securities obligation of the clients. Any third party delivery from the clients should not be delivered to Clearing house.
  3. No credit to clients should be given even though shares received from third party has been delivered to clearing house due to any technical reasons beyond management’s control. If client provides sufficient written proof of ownership of such account/share, than after updating client database, client may be given effect of the same.
  4. The reports provided by Exchange should be used to check whether there is any short pay-in/ out of securities to/from Clearing house
Delivery of Securities
  1. The firm will be making direct pay-out of shares to client account of which details are given in Client Registration Kits.
  2. The direct pay-out file should be created by the backoffice software.
  3. The instruction slip for shares delivery from the Pool account in case of client to client transaction or break delivery from the Clearing house should be signed by directors
  4. Pay out shares shall be given to clients only when they have clear balance in their ledger account. (*the clear balance means that cheques issued by clients should have been cleared in bank.)
  5. Shares of clients having debit balance will be kept with the firm as hold back margin.
  6. The hold back margin account will be reviewed twice in a week i.e on Wednesday & Saturday and shares will be credited to the accounts of the client if they have clear balance during the time of periodic review.
  7. The value of shares to be kept in the holdback margin shall be to the extent the client is having debit balance calculated after taking hair cut into account i.e if the client is having a debit balance of Rs. 100000/- then the shares of worth Rs 140000/- (approx) will be retained in holdback margin and any excess shares shall be released to the account of the client.
  8. In case shares are sold which are lying in our hold back margin a demat charges of Rs 14 per script will be debited to the client’s ledger account. Similarly in case of Inter-settlement demat charges of Rs 14/- per script would be debited.
INVESTOR REDRESSAL SYSTEM/ MECHANISM
  1. The firm has a separate manual register for recording all clients related complain either received personally or via post or via email.
  2. The firm has also designated email ID for sending complain by its investors or clients. The email Id has been disclosed in the Welcome letter sent to all clients at the time of registration as well as are mentioned on the contract note.
  3. The firm has also kept manual investors complain register at its all branches and the same are verified by the compliance officer or its team of official from time to time.
  4. The branch manager is responsible for sending the copy of complain received or written in complain register within 24 hours of the complain to compliance officer at head office either personally or via email.
  5. On receiving the complain, the Compliance officer is authorised to dispose off the complain on its merit and write personally to the client of all action taken by him for satisfaction of the client.
  6. If the compliance deserves the attention of the higher management or if the compliance officer is unable to dispose off complain to the satisfaction of the client or the exchange or the SEBI, the designated directors are informed of the situation by the compliance officer and all documents are placed before them within seven days of the receipt of the complain.
  7. The designated director’s review the pending complains every seven days along with matters needed their attention.
Branch Control Policy
  1. A list of Branch will be displayed at Head Office with name of In-charge, Address, Contact Number & Email details.
  2. Compliance Officer will be responsible for checking & controlling day to day affairs of the branches for any trading problems.
  3. Branches will be opened for sole purpose of allowing clients to get their orders executed. Clients will be allowed to trade from only one specified branch for better control & service. Branch manager will be responsible for all activities & trades executed from any branch and solving any client related problems in consultation with compliance officer.
  4. All Client Registration Kits will be approved at the head office and will be required to be counter signed by the branch head from where client has shown his interest to trade. Branch head will be responsible for all trades executed from his branch and putting all surveillance system to keep tab on ‘unfair’ trade practices like ‘123’ etc.
  5. All contract notes will be generated at head office and will be distributed from respective branches within 24 hours of the trade. All clients will be required to specify the place of delivery of contract note.
BACKUP POLICY

All important data backup is taken on daily basis. Backup is taken to preventing loss of data in the event of equipment failure or destruction.

Backup Storage

There shall be a separate or set of storage for each backup day. The old data is kept for 7 days and after that the storage media is reused.

Monthly Backups

Every month a monthly backup shall be made using the latest backup on the USB hard disk and the same is taken to separate location by the executive.

 
 
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