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1. Policy For Pre- Funded Instruments / Electronic Fund Transfers:

Date of Policy : 10th June , 2011.

The stock brokers, at times, have to accept Demand Drafts from their clients to meet payin obligations or margin requirements.

The stock brokers were not able to maintain an documentation of the details of funds so received, such as the details of the name of the client and bank account-number from which this instrument was made as these details were not mentioned on such instruments. This gave rise to a possibility of flow of third party funds / unidentified money, which was not in accordance with the provisions of the SEBI Act. It would also have affected the integrity of the securities market.

So to consolidate these practices, on June 9, 2011, SEBI vide Circular No. CIR/MIRSD/03/2011 clarified the procedure by which any pre-funded instruments, such as, Pay Order, Demand Draft, Banker’s cheque, etc., can be accepted.

This is an clarification to the earlier circular of SEBI (Circular No. SEBI / MRD / SE / Cir-33 / 2003 / 27 / 08 dated August 27, 2003), that has permitted Demand drafts as an valid mode of receipt and payment of funds.

In view of the above, the following procedures are to be followed and documented in our office when funds are received from the clients through pre-funded instruments, such as, Pay Order, Demand Draft, Banker’s cheque, etc.:

1. If the aggregate value of pre-funded instruments is 50,000/- or more, per day per client, accept the instruments only if the same is accompanied by the name of the bank account holder and number of the bank account from which this instrument is made, duly certified by the issuing bank. The certificate has to be retained and produced for audit/inspection purposes. Any of the document mentioned below would amount to a valid certificate for the above purposes:
   1. Certificate from the issuing bank on its letterhead or on a plain paper with the seal of the issuing bank.
   2. Certified copy of the requisition slip (portion which is retained by the bank) to issue the instrument.
   3. Certified copy of the passbook/bank statement for the account debited to issue the instrument.
   4. Authentication of the bank account-number debited and name of the account holder by the issuing bank on the reverse of the instrument.
2. Pay Order, Demand Draft, Banker’s cheque will be accepted in the organization only after it is approved by the Compliance Officer.
3. It will remain the primary responsibility of the compliance officer to maintain an audit trail of the funds received to ensure that the funds are received from our clients only.

2. Policy On Unauthentic News Circulation

Date of Policy: 25th March, 2011.

In view of SEBI circular No. Cir/ISD/1/2011 dated 23/03/2011 dealing with circulation of unauthenticated news, the following practices and procedures will be followed by all the Employees/temporary staff/ dealers working at various offices of the company.

Background :

The SEBI is of the view that Broking houses are the organisation dealing with many people in various capacities i.e. clients, employees, dealers etc. So the volume of exchange of information and views between them is also high that spreads like fire.

Many times information related to various scrip’s are circulated in blogs, chat forums/e-mail etc. by employees of broking houses without adequate caution. This may be against the code of conduct as mandated for stock brokers. Market rumours can do considerable damage to the functioning and behaviour of the market and distort the price discovery mechanisms.

Steps to be taken :

Considering the above factors, the following practices will be followed immediately in our office.

• Any information, query or rumour received through any client, industry or trade sources should be first shared/discussed/informed to the compliance officer/Director of the company. Only after the news will be verified by the authorised personnel the same will be let out.
• In view of the above requirement, access to blogs, chat forums, messenger sites will be by default denied to all the employees of the company.
• Only the compliance officer and the director/s have the authority to decide which persons will have access to which sites.
• All the logs for any usage of such blogs/ chat forums / messenger sites will be maintained for future reference.
• Market related news received by any employees in their official mail/ personal mail / blog or any other manner, shall be first directed to the directors/ compliance officer or the authorised personnel of the company. Only after the same is approved by the director/ compliance officer or the authorised personnel, only then it will be allowed to be forwarded further.