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Company Overview
 
Management Team
 
Core Purpose and Values
 
Testimonials
Risk Management & Surveillance Policy
1. Preface

Risk Management is an integral part of any organization. We need to deal with various kind ofrisk like Credit Risk, Market Risk, Default Risk, Liquidity Risk and other Risk.

In Securities Market, customers have to be alerted with respect to their obligations, openpositions, market conditions, margin requirements, regulatory requirements and steps initiated bybrokers in case of changing market situations.

With a view to enhance customer knowledge and safeguarding investor interests, STOCKHOME INDIA LIMITEDhavedevised a comprehensive Risk Management & Surveillance ( RMS ) Policy to make sure thatcustomers are aware of criteria based on which STOCKHOME INDIA LIMITED monitors risk and initiates actions tosafeguard the interest.

Major parameters of RMS Policy are mentioned below:

2. Setting up clients exposure limit

Cash Segment:

Exposure constitutes both a purchase and sale transactions of shares & securities. A purchasetransaction includes buying of securities and it remains as exposure till client gives full paymentfor the shares bought. A sale involves a share delivery obligation to the exchange and it remainsan exposure till the client delivers the shares. Exposure will mean the aggregate of theoutstanding purchase and sales.

Exposure limit of the client will be set on the basis of available base capital as defined below.The limits may be allowed on a multiplier basis to the available base capital depending on themarket conditions and the risk perception about the market/client. However in exceptionalsituations STOCKHOME INDIA LIMITEDmay use its own discretion in providing the limits and may change for a clientor for all depending on market conditions.

Base Capital constitutes of Margin Ledger +/- Party Ledger + Collateral Stocks (Stocks given toSTOCKHOME INDIA LIMITEDas Margin) + Debit Stock (Stock withheld by STOCKHOME INDIA LIMITEDagainst ledger debits) +Outstanding Stocks (Stocks yet to receive from exchange) – Shortages (Stock sold but notdelivered to broker for pay in within T+2 days) + Value of stocks held in

# All stocks are valued after hair cut applied by STOCKHOME INDIA LIMITED

The exposure in offline segment will be as under:-

Base Capital
 ( Rs. In Lakhs )
Normal Market Condition
( No.of times )
Panic Market Condition
*( No. of times )
0 – 24 Times 2 Times
2 - 10 5 Times2 Times
10 - 15 6 Times 3 Times
Above 15 8 Times 3 Times

The market would be categorized as Panic Market if the index movement is 6 % in asingle day or a cumulative movement of 10 % ( either side movement ) in consecutivesessions or is declared specifically by STOCKHOME INDIA LIMITEDin case of emergency for the limitedpurpose of this Risk Management Policy.

The exposure in online segment will be as under: -

Product No. of times
Intra Day 5
Delivery Plus 4
Margin Plus Up to 20

Customer can utilize the limit as per his desire for the available product. In case the same is usedfor one product then the limit will be adjusted for other product automatically. Further trading limits are provided only on realized cheques and fund transfer done using payment gateway inboth the segment.

# The above exposure limits can be reduced to one time based on clients profile &STOCKHOME INDIA LIMITED’s riskappetite.

# In addition to above, STOCKHOME INDIA LIMITEDapplies specific scrip wise Margin, hence few scrips can attracthigher Margin than the normal margin available for liquid scrips, this can vary in the range of 50% to 100 %.

In other case the exchange increases the margin requirement in any scrip, STOCKHOME INDIA LIMITEDcan reduce theexposure in that particular scrip as per the exchange margin requirement i.e. say exchange hasincreased the margin in scrip XYZ Ltd. by 100 %, STOCKHOME INDIA LIMITEDmay reduce the exposure to half inXYZ Ltd. apart from this scrip, client will be having normal exposure in total as per aboveguidelines.

F&O Segment:

Derivative segment is a margin driven segment. Margin will be collected as per the requirementof the exchange i.e. SPAN margin + exposure margin + additional margin (as any madeapplicable by the exchange ). In case of panic market additional margin can be collected bySTOCKHOME INDIA LIMITEDlooking at market conditions.

Scrip’s acceptable as collateral – only approval list of stocks as per exchange for F&O marginwill be accepted after a haircut applicable as per exchange. However STOCKHOME INDIA LIMITEDmay accept on itsown discretion, the stocks which are not in the list of exchange defined illiquid scrip.

Scrip wise Exposure Limits:


Cash Segment

To keep in mind the surveillance measures and also to stop unusual activities in illiquid stocks,scrip wise limits will be set on the basis of following parameters at STOCKHOME INDIA LIMITEDlevel.

Scrip Group Available Buying Limit Available Selling Limit
A Group Unlimited Limit Unlimited Limit
All scrips where F&Otrades are allowed Unlimited Limit Unlimited Limit
B + S + T + ST Avg. Volume > = 50001-Unlimited Unlimited Limit
Avg. Volume < 50000 – 30% of average market volume of last 10 days Unlimited Limit
Avg. Volume = < 1000 – No buyinglimitUnlimited Limit
Z Group Zero buying limit There is no restriction on Quantity. However there is a limit on value of sale transaction which is Rs. 24 lacs perscrip at STOCKHOME INDIA LIMITEDlevel( As per the exchangenorms


i) Avg. Volume signifies total of average traded quantity of both the exchange forprevious 10 days
ii) No trades will be allowed in physical scrips


F&O Segment

To bring the control on risk related to trading in illiquid securities in F&O segment we havedecided following parameters:

PARAMETER MODE
Scrip which has open interest and also volume on previous day Open
All scrips where F&Otrades are allowed Unlimited Limit
Scrip ( only future) which has open interest but no volume on previous day Open
Scrip ( other than future) which has open interest but has no volume on Previous Day Square off mode
Scrip which has no open interest but has a volume on previous day Square off mode
Scrip does not have open interest and also no volume on previous day Square off mode
Far month Future stock and Option Contract i.e. 3rd month onwards Square off mode


3.Right to sell clients securities ( RMS Selling ) or close clients positions onaccount of non- payment of clients dues :

It is client’s obligation to clear his obligations on T+2 days ( T indicates Trading day ). Theclient shall timely provide funds/securities to STOCKHOME INDIA LIMITEDfor the purchase/sale of securities formeeting his obligations to the exchange. In case of client falling short of providingfund/securities, STOCKHOME INDIA LIMITED has the right to close the positions/ sell the clients securities with orwithout giving prior notice to client to the extent of ledger debit and/or to the extent of marginobligation STOCKHOME INDIA LIMITEDcan liquidate the securities bought or collaterals given or any other securitiesgiven by client in any other form for clearing the clients obligation.

RMS Selling criteria in Cash Segment

RMS selling in clients account will be done on T+5 days ( T indicates Trading day) for the ledgerdebit on due basis. For example, if the position has been taken on Monday then the fundspayment is due on Wednesday (T+2 day). Shares so bought on Monday will be withheld by STOCKHOME INDIA LIMITED till the debit is cleared. If the funds are not received by Friday, shares will be sold onfollowing Monday.

Incase stock valuation falls below 20% of the total ledger debit, square off can be done evenbefore T+5 days.

RMS Selling criteria in F&O Segment :

In case of F&O segment, RMS selling will be done on T+2 basis for the Mark to Market ( MTM)debit/Margin Shortfall.

If MTM reaches 80% of the deposit RMS selling can be done even before above stipulates days.

In case of panic market conditions, RMS selling will be done on T+1 basis.

Selling sequence when STOCKHOME INDIA LIMITEDdoes RMS selling.

i)The open position in F&O segment will be squared off towards margin shortage.

ii)In case there is ledger debit in client’s accounts, collateral stocks to the extent of ledgerdebit (including MTM) will be sold off.

Further client will be suspended from Trading on RMS selling day and suspension would beremoved after selling.

4.Surveillance Policy and Procedures

Surveillance and monitoring is very crucial part of today’s trading system. Effective surveillance can achieve investor protection, market integrity and safeguard or capital market. The main objective of surveillance is to stop suspicious and manipulated trading activity by individual or group of individuals on the exchange platform.

(i)Receipt of Alerts from Exchange: As per the circulars issued by the exchanges the trading member will receive certain alerts from the exchange on daily/monthly basis as mentioned below:

Sr. No Transactional Alerts Segment
1. Increase in client trading activity from previous month Cash
2. Significantly increase in client activity Cash
3. Sudden trading activity in dormant account Cahs
4. Clients/Group of Client(s) deal in common scrip’s Cash
5. Client(s)/Group of Client(s) is concentrated in a few illiquid scrips Cash
6. Client(s)/Group of Client(s) dealing in scrip in minimum lot size Cash
7. Client/Group of Client(s) concentration in a scrip Cash
9. Pump and Dump Cash
10. Wash sales Cash &Derivatives
11. Reversal of Trades Cash & Derivatives
12. From Running Cash
13. Concentrated position in the Open Interest/ High Turnover concentration Derivatives
14. Order book spoofing i.e large orders away from the market Cash


(ii) Analysis of Client(s) transaction(s)/alert(s):

On receiving the said alerts from the exchange we shall analyze each and every alerts with the information available with us. In order to analyze/verify such alert we shall examine trading activity of the Client(s)/Group of Client(s) or scrip's identified based on above alerts.

(a) We may seek written explanation/undertaking from such identified client(s)/Group of client(s) for entering into such transactions. (b) We also ask for documentary evidences such as Bank statement / Demat transactions or holding statement within the period of such transactions or more than that. We may also ask for financial details of the client such as income tax return, salary slip, annual returns etc.

After analyzing the documentary evidences, such as the bank / demat statement or any other documents relevant to the said alert / transaction, we shall record its observation for such identified transactions or Client(s) / Group of Clients(s). In case any adverse observations are recorded, we shall report all such instances to the exchange.

(iii)Frame for disposition of alerts:

In case adverse observations/alerts are recorded, we shall report such instances to the exchanges within 45 days of alert generation. In case there is delay, we shall seek extension of the time period from the exchange after giving proper reason for delay.

(iv)Suspicious/Manipulative activity identification and reporting process:

After analysis of the transaction/alerts, documentary evidences and information available with us, we shall identify the suspicious/manipulative transactions of any of the client/group of clients, if any and shall report the same to the exchange within the prescribed time limit. Further we may stop/banned client for doing further trading at our end.

(v) Record maintenance:

We shall maintain and keep all such records and documentary evidences that has been analyzed/taken by us either in soft copy or in hard copy for the time period as prescribed by the regulatory authority. We shall produce such records as and when asked by exchanges or by the regulatory authority.

5.Other Surveillance Actions:

i)Refusal of order for penny stocks/ illiquid contracts:

STOCKHOME INDIA LIMITEDmay refuse or restrict a client in placing the order in certain securitiesdepending on various conditions like volume/value/part of illiquid scrip’s/ Zgroup of securities although a client may have credit balance or sufficient margin in the trading account. List of such scrip’s will be reviewed on a periodical basisand will be updated on STOCKHOME INDIA LIMITEDwebsite. However STOCKHOME INDIA LIMITEDunder exceptionalcircumstances may execute clientele order STOCKHOME INDIA LIMITEDhas the discretion to rejectexecution of such orders based on its risk perception.

In case of F&O segment, all the far Month Option contracts and third MonthOption Contract (Except Nifty) will not have buy and sell limit due to its illiquidnature. However in all above cases if client still wish to trade then the clientneeds to coordinate with the respective branch and the limit will be set by HeadOffice after analyzing the requirement.

ii) Regulatory conditions under which a client may not be allowed to take furtherposition or STOCKHOME INDIA LIMITED, may close the existing position of the client.

In case overall position is a scrip/derivatives contract has reached the Regulatorsprescribed exchange limit/ Market wide open interest limit/ client level limit, thenclient may not be allowed to take further position, till such time Regulatorsprescribed limit comes down to create a new position.

Further STOCKHOME INDIA LIMITEDmay close the existing position of a client to the extent of debitbalances to release the margin from the exchange. In case if STOCKHOME INDIA LIMITEDhassufficient margin cover on behalf of its clients, it may still decide based on themarket conditions and risk perception not to allow further position or may closethe existing position of a client.

iii) PMLA Guidelines:

Client will be categorized as High, Medium and Law risk customer as per theirrisk appetite and their current profile as mentioned in Know your client from(KYC). The same will be reviewed at regular intervals.

Client will be categorized as High, Medium and Law risk customer as per theirrisk appetite and their current profile as mentioned in Know your client from(KYC). The same will be reviewed at regular intervals.

Exposure to client may also be governed by customer profiling mentioned aboveas well as clients financial income made available to STOCKHOME INDIA LIMITEDfrom time to time.Client needs to furnish their income details on yearly basis. Following documentswill be accepted as a income proof

• Copy of ITR Acknowledgement
• Copy of Annual Accounts
• Copy of Form 16 in case of salary income
• Net Worth Certificate
• Salary Slip
• Bank account statement for last 6 months
• Copy of demat account Holding statement
• Any other relevant documents substantiating ownership of assets.

If there is a major disparity between financial details and tradingvolumes, client will be asked to furnish suitable explanation andbased on the same further trading limits will be sanctioned.

iv) Suspension of Clients:

STOCKHOME INDIA LIMITEDmay withhold the payout of client and suspend his trading accountdue to any internal surveillance ( if client indulges into manipulative tradepractice)/ regulatory orders (debarring orders)/ if the client is dormant (nottraded > 6 months).

6.Communication

Client can view details of his ledger, margin, shortfall etc through his secured login onSTOCKHOME INDIA LIMITEDwebsite. The client has to be aware about his position, outstanding balance andRisk. STOCKHOME INDIA LIMITEDis under no legal obligation to send any separate communication but as acustomer centric company we may take extra efforts generally to ensure that client is wellinformed about the Risk and the possible actions, which may follow. Thecommunication would generally be through SMS/Email on registered contact details withSTOCKHOME INDIA LIMITED.

7.Disclaimer

STOCKHOME INDIA LIMITEDmanagement will have a discretion to alter/change any of exposure limit,selling parameter defined in this policy on the basis of prevailing marketconditions with or without prior intimation and can use their discretion to grantanykind of exemption/permission in case they deem fit on case to case basis.

Our Commitment - Stockhome India  Ltd. is strongly committed to every individual's right to privacy and to keeping personal and financial information secure. As part of the effort to earn your trust and confidence in our commitment, we are fully disclosing our privacy practices. We therefore encourage you to read our privacy statement to familiarize and understand the types of personally identifiable information we collect and how we use this information.

CIN No. : U67120DL1996PLC081165     |     FOR SUGGESTION & INVESTOR GREIVENCES EMAIL US AT : investorgrievance@stockhomeindia.com 
SEBI Regn. No NSE CM: INB231168031, SEBI Regn. No NSE F&O: INF231168031, NSE Member ID: 11680, 
SEBI Regn. No BSE CM: INB 011168037, BSE Member ID: 6503

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