RISK MANAGEMENT AND SURVELLANCE POLICY

• Introduction

  To manage the risk in the security Market for the better survival of clients as well as company, we present our RMS Policy which also plays important roles for better and effective Compliance and Comprehensive Management of risk and effective branding of the company in the Market.
   

• About Risk (What is Risk)

  To understand risk management, you must become familiar with the term “risk.”

  Risk is defined as anything which poses a threat to an organization. Risk management is the process of dealing with these threats.

  Talking about the Risk is basically variability in possible outcomes, usually in reference to the possibility of negative results.

  One thing that all organizations must understand is that every one of them will face risks in one way or another. Whenever an organization or individual has objectives to meet, they will risk their resources when trying to reach these objectives. This is especially true when it comes to commercial organizations, and risk management is a tool which will allow these risks to be managed in an environment which is uncertain.
   

• About Risk Management

  Risk management is an important concept that many employees, managers, and stakeholders refer to when they are concerned about the effects of a certain move on reaching key objectives.

  Risk management is important because it gives the ability to figure out methods for which events can be managed, especially those events that may have an adverse impact on the financial or human capital of the organization. By being able to assess and identify risk, it becomes easier for one to prevent it from occurring, or to quickly address adverse events if and when they do occur.
   

• Classification of Risk

  We hereby classify the risk as under:

  1. Credit Risk: Credit risk, also called default risk, is the risk associated with a person going into default (not making payments as promised).

  2. Market Risk: The possibility that the value of financial markets rise or fall.

  3. Business Risk: The risk that a company will not have adequate cash flow to meet its operating expenses it would be susceptible to business risk or changes in the overall economic climate.

  4. Compliance Risk: Compliance risk is the current and prospective risk to earnings or capital arising from violations of, or nonconformance with, laws, rules, regulations, prescribed practices, internal policies, and procedures, or ethical standards.

  5. Systemic risk: Systemic Risk is the risk of collapse of an entire financial system or entire market, as opposed to risk associated with any one individual entity, group or component of a system.
   

• Limit Settings:

  Exposure Limits

  The client agrees and confirms to abide by the exposure limits, if any, set by Shreni Shares Pvt. Ltd., or by the Exchange or Clearing Corporation or SEBI from time to time.

  The Stock Broker/ Trading Member may from time to time, at its sole discretion, impose and vary limits on the orders that the client place (including but not limited to exposure limits, turnover limits, limits as to number, value and / or kind of securities / contracts in respect of which buy or sell orders can be placed etc.) The client is aware and agree that the stock broker/ trading Member may need to vary or reduce the limits or impose new limits urgently on the basis of Member’s risk perception and other factors considered relevant by Member and Stock Broker/ Trading Member may be unable to inform to the client of such variation, reduction, imposition in advance. The client agrees that the Shreni Shares Pvt. Ltd. shall not be responsible for such variation, reduction and imposition of limits.

• Credit and Settlement

  Trading and Exposure Limit if any set for the client is based on the Funds/Securities lying in the client’s account from time to time. In case any position taken in F&O segment it is necessary to maintain adequate upfront initial Margin in the client account. In case of non fulfillment of margin obligations/settlement bligation, Shreni Shares Pvt. Ltd. may squared off whole or part of the positions at its discretion. In case of any outstanding dues arising out of square off of open positions/settlement obligation, Shreni Shares Pvt. Ltd. may initiate legal proceedings.

• We may transfer unpaid client securities from pool/unpaid securities demat account to clients demat account.

• In case of partial payment, we can retain full value of securities till the 5 th day from the pay-out date. We shall however, within such 5 days, transfer the unpaid client’s securities to client’s demat account or dispose-off the securities in proportion to the amount not received.

• Notwithstanding the above and without prejudice to any other rights available to Shreni Shares Pvt. Ltd., Shreni Shares Pvt. Ltd. shall liquidate the securities in the market if the client fails to meet his/her/its funds pay-in obligation within five trading days from pay- out day. Profit/loss on the sale transaction of the unpaid securities, if any, shall be transferred to/adjusted from the respective client account.

• Margin Requirement:

  We hereby classify the risk as under:

  1. In Cash Segment

  Margin Requirement in cash segment is at the sole discretion of the Shreni Shares Pvt. Ltd. Further, Shreni Shares Pvt. Ltd. may grant limit in cash segment on a case to case basis. Also Dealer is in direct touch with the client and he is well versed with the client’s Financial Position and hence Shreni Shares Pvt. Ltd. may or may not rely upon the Dealer’s decision on limit setting in Cash Segment.

  2. In F & O and CD Segment

  In F&O/CD segment, Margin is required on upfront basis. Client is allowed to take positions on fulfilling the upfront margin requirement. In F&O segment, only Initial Margin is required on upfront basis and in CD segment, Initial Margin and Extreme Loss Margin is required to be collected on upfront basis. Further, Shreni Shares Pvt. Ltd. may demand any additional margin considering market conditions, client’s risk profile etc.

• Refusal of Order:

  Shreni Shares Pvt. Ltd. shall have the absolute discretion to accept, refuse or partially accept any buy or sell order for execution from a client.

  In respect of penny stocks, illiquid stocks, stocks having low liquidity, illiquid “options”, far month “options”, writing of “options”, stocks in S, Z and B2, T and TS category and any other contacts which as per the perception of Shreni Shares Pvt. Ltd. are extremely volatile or subject to market manipulation.

  Shreni Shares Pvt. Ltd. may permit restrictive acceptance of orders in such scrips / contacts in controlled environments like orders received from clients being forwarded by branches to centralized desk at HO instead of allowing trading in such scrips / contracts at branch level or through Online trading platform. Shreni Shares Pvt. Ltd. shall not be responsible for delay in execution of such orders and consequential opportunity loss or financial loss to client.

  Shreni Shares Pvt. Ltd. may cancel orders in such scrips received from clients before execution or after partial execution without assigning.

  • Systemic Management

    We ensure to provide uninterrupted trading to the client though in case of any technical fault, there is back up line and further we are also having Branch Network and Sub-Broker Network through which transaction can be routed. We have transparent dealing mechanism for the trades done by the clients are confirmed through voice recoding lines, SMS in addition to sending Contract Notes and Quarterly Ledger confirmation.

  • Role of Risk Manager

    For the better survival of organization as well as clients, the Risk Manager plays important roles and provides co- operation for better Risk Management and Surveillance so as to provide maximum transparency while dealing with the client.

    In brief The Risk Manager has to perform following functions:

    1. Identify Risk

    2. Analyzing Risk

    3. Verify the Limit Setting and Exposure Limit

    4. Monitoring Member Wise Margin Limit

    5. Generating Alert on reaching 75% of Margin Limit

    6. Co-ordinate with other Department for Collection/Recovery

  • Conclusion

    The above RMS Policy is designed for better function which intelligently helps to take decision based on various logics and parameters whether the company is exposed to Risk or not. You may also find the same on our Web Portal www.shreni.in
    
     

Risk Management Policy

RMS Selling and Recovery Policy

Version 1
 

Client’s Obligation:

It is client’s obligation to clear his obligations on T+2 days (T indicates Trading day). The clientshall timely provide funds / securities to Shreni Shares Pvt. Ltd. for the purchase / sale of securities for meeting his obligations to the Exchange. In case of client falling short of providing fund / securities, Shreni Shares Pvt. Ltd. has the right to close the positions / sell the clients securities with or without giving prior notice to client to the extent of ledger debit and / or to the extent of margin obligations. Shreni Shares Pvt. Ltd. can liquidate the securities bought or collaterals given or any other securities given by client in any other form for clearing the clients obligations.

 

RMS CM Selling Policy:

This is with reference to SEBI circular reference no.CIR/HO/MIRSD/DOP/CIR/P/2019/75 dated 20 th  June 2019 and further NSE circular reference no. NSE/INSP/42052 dated 04 th September 2019 and BSE circular reference no, 20190904-38 dated 04 th September 2019 regarding the captioned subject which is effective from 1st  October 2019, accordingly RMS selling policy is revised as under:

1. As per SEBI guidelines, it has been clarified that the securities received in pay-out against which payment has been made by clients, securities shall be transferred to the respective demat account within one working day of the pay-out and the securities for which payment has not been paid in full or has been made in partial by the clients (unpaid securities), such securities shall be kept in the Client Unpaid Securities Account. (CUSA) by the Stock Broker.

2. The client who has not cleared his ledger debit, dues before 4 th trading days from pay-in date i.e. T+2+4 shares will be compulsorily squared off by RMS to the extent of his ledger debit.

a. RMS will sell stocks lying in CUSA on T+2+4 day @ 11.15 am on daily basis to the extent of debit balance.

b. Selling of stocks will be done on FIFO basis i.e. First in First out on T+2+4 th trading day.

c. Clear credit is required before 10.00 am on selling day in the clients ledger account. Any provisional receipt will not be considered while calculating ageing balance on the day of selling. Only on receipt of clear credit, trading/buying will be allowed on selling day in scrips other than which RMS selling has been done.

d. Selling will be done for ageing balance more than Re.1 and code will be blocked for trading on the selling day. No buying will be allowed for ageing codes.

e. Selling will be done for all category of clients except Institution.

3. If the client has sold shares from his DP/Collateral before RMS selling day (i.e.selling upto T+2+3rd day) and early pay-in has been successfully done against the said transaction to exchange such unsettled credit balance will be considered while calculating the ageing balance on the RMS selling day.

4. If debit still remains, the shares lying in CUSA account will be sold by RMS on RMS selling day to the extent of ageing balance even client can sell stock from CUSA on FIFO basis only before 10.30 am. On recovery of ageing debits, part quantity of shares, if any lying in CUSA will be transferred to the clients demat account on FIFO basis.

5. In case any security is lying in the CUSA beyond 7 days after the pay out i.e. T+2+7 th day, Depositories shall be levying the penalty.

6. The ageing balance is calculated by considering NSE, BSE Exchanges and CAPITAL MARKET, DERIVATIVES, SLB and CURRENCY Segments ledger Balance.
 

Please note that

1. Shreni Shares Pvt. Ltd. management will have a discretion to alter/change any of selling parameter defined in this policy on the basis of prevailing market conditions with or without prior intimation and can use their discretion to grant any kind of exemption/permission in case theydeem fit on case to case basis.

2. In case of any disagreement and/or ambiguity, Management reserves the right to make the decision, which shall be final and binding.

3. Any loss/ damage arising out of compulsory square-off of trades towards outstanding debits from clients, the same will be debited to the clients account for which the clients will have to make the full payments. Please note that further exposure will not be allowed in case of any outstanding debits in the clients account.