Introduction:

Investment in securities is susceptible to market risks that cannot be predicted. While the risk of loss is inherent in the market, it is important to note that the Risk Management Policy is not insurance against losses; these are measures and precautions that are adopted to contain risks to the minimum. The Policy is subject to change according to our risk perceptions of the market and SEBI/Exchange regulations for the time being in force.

Setting up Exposure Limit

Cash Segment:

In the cash segment, clients are assigned margin/ deposit-based limits for trading purposes. The exposure limit of clients would be a multiple of the clear ledger balance in the account of the client. The value of the “multiple” will be decided by S A Artha Securities Private Limited based on market conditions. For the cash segment, the margins are blocked as per the scrip category. The clients' deposits are calculated by netting off the ledger balance in all segments and collaterals pledged with S A Artha Securities Private Limited (after haircut). Additional limits may be assigned on a case-to-case basis after evaluation of the client profile.

Derivative Segment:

In the Derivative segment, margins are blocked as per initial (SPAN) + Gross Margin (as per exchange). The clients' deposits are calculated by netting off the ledger balance in all segments and collaterals pledged with S A Artha Securities Private Limited (after haircut). Additional limits may be assigned on a case-to-case basis after evaluation of the client profile. The exposure limits for each client are based on the amount of margin money deposited by each client, as per Exchange regulations. The upfront margin is collected from the client. As per the exchange, the free balance of the margin pulled is also to be maintained by the client.

Pledge Securities:

The limit for trading on pledge securities will be given to the client only after the creation of the pledge is confirmed in favour of S A Artha Securities Private Limited.

Products

Clients can place orders for delivery and intraday trade across segments, that is, Cash and F&O segments on S A Artha Securities Private Limited. S A Artha Securities Private Limited also allows Bracket Orders (BO) and Cover Orders (CO) as Intraday products.

Cash Segment

In the intraday cash segment, the client has to place orders using the MIS/CO/BO product code. The clientele is provided with a limit which is as per the exchange defined Var + ELM for the respective scrips. Once the trade has been filled, only a portion of the full applicable margin will be blocked as per margin requirements for the stock. S A Artha Securities Private Limited will square off all open positions under the MIS/CO/BO code before the normal market closure timing.

In the cash segment for Delivery trade, the clients are required to have a ledger balance of up to 100% of the gross value of the stock at the time of the transaction, that is, the full amount of margin applicable at the time of order.

Derivative segment

In a derivate segment for intraday, the clients can place orders with the MIS/CO/BO product code. The client has to pay margin as required by S A Artha Securities Private Limited. Once the trade has been filled, only a portion of the full applicable margin will be blocked as per margin requirements for the stock till the position is held. S A Artha Securities Private Limited will square off all open positions under the MIS/CO/BO code anytime during normal market closure timing.

In a derivative segment for Delivery or NRML trade for future products, the client requires 100% of the applicable span and exposure margin. For buying options, the full premium margin amount is required. For selling options, the applicable span, exposure, and additional margin are required.

S A Artha Securities Private Limited allows clients to place BO and CO, which are special intraday products. BO is a type of order where customers can place three types of order simultaneously, namely initial Order, Stop Loss order, and Target Order. A cover order is a type of order where a client needs to place a stop loss order compulsorily with the initial order.

Product Wise Limits

Trading Limit

The client has a trading limit based on their combined ledger across all segments and the value of pledged securities. To avoid incorrect trading, single order limit is given below:

Margin

Margins are collected upfront from the client before the actual trade. The types of margins are cash component (ledger credit, Fixed Deposits, Bank Guarantee) and Non-Cash Component (Approved listed securities after haircut in pledge form, approved mutual funds after haircut, and any other securities accepted by the stock exchange from time to time).

Margins are blocked in each segment, as tabulated below

Restricted Scrips and contracts

In order to exercise additional due diligence while trading in these securities on behalf of their clients S A Artha Securities Private Limited reserves the right to refuse execution of any transaction requests of clients on such restricted securities or to reduce the open market interest of the clients in such securities/ contracts.

S A Artha Securities Private Limited also reserves the right not to allow trades or transactions in respect of certain securities or segments or orders/requests which may be below/ above the certain value/ quantity as may be described by S A Artha Securities Private Limited from time to time.

The stocks that are not traded in high volumes every day, hit very low values regularly, have considerable differences in the bid and ask price, are difficult to trade compared to liquid stocks, lack liquidity, and are classified under the Z or T group by the exchange are considered as illiquid stocks. S A Artha Securities Private Limited may periodically update the list of illiquid stocks.

Securities and Exchange Board of India (SEBI) and Exchanges, in order to enhance market integrity and safeguard the interest of investors, have been introducing various enhanced pre-emptive surveillance measures such as reduction in price band, periodic call auctions, and transfer of securities to Trade for Trade segment from time to time. In continuation to various surveillance measures already implemented, SEBI and Exchanges have decided that along with the aforesaid measures, there shall be Graded Surveillance Measures on securities with price not commensurate with financial health and fundamentals like Earnings, Book value, Fixed assets, Net-worth, P/E multiple, Market Capitalisation etc and Additional Surveillance Measures (ASM) on securities with surveillance concerns based on objective parameters viz. Price / Volume variation, Volatility etc. S A Artha Securities Private Limited, as a risk containment measure, shall allow trading in these shares only on Cash & Carry product (CNC), i.e., 100% margin on the first stages, and trading in the ASM/ GSM stages of 2 and above are blocked and square off allowed. The clients should refer to the updated GSM and ASM Scrips List before the execution of any trade.

S A Artha Securities Private Limited shall not be responsible for non-execution/delay in execution of orders in restricted scrips and contracts and consequential opportunity loss or financial loss to the customer. S A Artha Securities Private Limited shall have the discretion to place such restrictions, notwithstanding the fact that the customer has adequate credit balance or margin available in his account and/or the customer had previously purchased or sold such securities/contracts through S A Artha Securities Private Limited itself. S A Artha Securities Private Limited shall have the right to revise the list of such securities/contracts on a periodic basis.

Square off / Close out of the Positions/ Stocks

The client shall provide funds or securities to S A Artha Securities Private Limited in a timely manner for the purchase or sale of securities to meet his/her obligations to the exchange. It is the client’s obligation to clear his obligation on T+1 days. In case the client falls short of providing funds/ securities, S A Artha Securities Private Limited has the right to close the position or sell the client's securities with or without giving prior notice to the client to the extent of ledger debit and / or to the extent of margin obligations.

The client shall ensure timely availability of funds/securities in form and manner at the designated time and in designated bank and depository account(s) for meeting his/her/Its pay in obligation of funds and securities. S A Artha Securities Private Limited shall not be responsible for any claim/loss/damage arising out of non-availability/short availability of funds/securities by the client in the designated account(s) of the S A Artha Securities Private Limited for meeting the pay in obligation of either funds or securities.

Any and all losses and financial charges on account of such liquidations/ closing out shall be charged to & borne by the client. In cases of securities lying in a margin account/client beneficiary account and having corporate actions like Bonus, Stock split, Right Issue, etc, for margin or other purposes, the benefit of shares due to receive under Bonus, Stock split, Right Issue, etc. will be given when the shares are actually received in the S A Artha Securities Private Limited designated demat account. In case the client makes the payment of the margin/security through a bank instrument, the stock broker shall be at liberty to give the benefit of credit for the same only on the realization of the funds from the said bank Instrument, etc., at the absolute discretion of the S A Artha Securities Private Limited. Where the margin/ security is made available by way of securities or any other property, S A Artha Securities Private Limited is empowered to decline its acceptance as margin/ security and to accept it at such reduced value as the stock broker may deem fit by applying haircuts or by valuing it by marking it to market or by any other method as the stock broker may deem fit in its absolute discretion.

Intraday Square Off: All orders placed in MIS/BO/CO will be squared off from the RMS side before the closing of market hours by 3.20 PM, and fresh orders in intraday will be restricted before square-off. All pending orders / unexecuted/partial orders will be canceled for Cash and F&O segment at the end of the day.

If any intraday position is not squared off on the same day due to any reasons like a link or system failure or any risk associated with internet/wireless-based trading which occurs at the end of the client and stocks at lower or upper circuit, i.e, circumstances beyond control, then it will be treated as a carry forward position, and any loss or penalty due to this will be borne by clients only. S A Artha Securities Private Limited reserves the right to liquidate the same on the next trading day as soon as the market opens in the absence of the required margin.

Mark to Market Square–Off: S A Artha Securities Private Limited reserves the right to square off all intraday positions (cash as well as derivatives) and carry forward derivatives trades, where in MTM (shortage of funds) crosses 80% and above. The Client will be alerted by notification at 60% and 70% on a best-effort basis; however, given the market volatility, sending an alert should not be misconstrued as an obligation for S A Artha Securities Private Limited. The positions will be reduced on the best-effort basis, and the client will be liable for all losses on square-off. All client pending orders will be canceled. If the client is creating a buy position in options, the full payment of the premium shall be blocked. In the case of any MTM calculations or margin requirements, this option premium shall not be considered part of the calculation.

Ageing based Square-off: It is the client's obligation to clear ledger debit balances in T+1 day ( i.e. on settlement day) where in T is the transaction/trading day. If there is a failure on part of the client to clear the ledger debit then S A Artha Securities Private Limited reserves the right to liquidate the stock upon ageing of the ledger debit beyond T+4 days. The stock will be sold from clients' accounts on T+5 days after the ledger debit.

Further holding of clients' securities, in case of Debit balance in the client ledger account, S A Artha Securities Private Limited reserves rights to transfer securities to the Client's unpaid securities Account (CUSA) from the pool account. In case of non-payment, S A Artha Securities Private Limited reserves the right to sell securities from CUSA. Further, S A Artha Securities Private Limited also reserves the right to transfer unpaid Securities to the client account directly from the pool / CUSA account. In case the client is providing collateral in the form of approved securities as a margin, a margin pledge shall be initiated by the client in favor of S A Artha Securities Private Limited through physical or electronic instruction mechanism provided by the Depository.

In case of non-payment of purchased securities or towards margin obligation of the client, where the client has given Power of Attorney in favor of S A Artha Securities Private Limited, the margin pledge shall be initiated by S A Artha Securities Private Limited on behalf of the client. The margin pledge will be initiated as per the process defined by the Depositories / SEBI / Exchanges. In case the client defaults, S A Artha Securities Private Limited and/or the Clearing Corporations shall be entitled to invoke securities pledged by the client.

S A Artha Securities Private Limited reserves the right to sell the collaterals pledge by the client towards margins and/or paid securities purchased by the client in earlier settlements where the sale proceeds of unpaid securities are inadequate to cover the payin obligations and/where the unpaid securities appear to be comparatively illiquid and cannot be sold at reasonable rates to the extent required.

Margin shortfall based square-off: The client needs to maintain the defined margin to retain position in the derivative segment, S A Artha Securities Private Limited reserves the right to initiate liquidation of position up to the required margin at any point of time. If the defined margin or exchange margin is short, any position can be squared off at the S A Artha Securities Private Limited's discretion. There may or may not be margin calls or intimations from RMS team

RMS liquidation will be done on a T+1 basis for the MTM debit/margin shortfall. Even due to sudden scrip volatility during the day, if a shortfall arises during the day due to MTM loss or margin increase, RMS liquidation will be done on the same day. On T+1 day, the required margin needs to be maintained before 9:00 AM in order to continue holding the position.

S A Artha Securities Private Limited provides a limit as per Exchange norms only, but a Margin shortfall (End of day Margin or Peak Margin) penalty can be imposed in case of sudden volatility in the market and margin increase by the exchange.

Physical settlement of F&O

In case of stock future contracts on expiry day, only intraday trading will be allowed. No fresh carry-forward position will be allowed & no fresh position will be allowed in the Stock Option contract on day of Expiry in any product type. For the carry forward position, if the customer wishes to take or give physical settlement of Stock Future /Stock Options contracts, they would be required to maintain a margin, which is to 100% of the contract value before 9:00 am on expiry day (Thursday).

If, for any reason, in case there is a margin short-fall (i.e., less than 100% of the contract value), S A Artha Securities Private Limited reserves the right to square off the position. In case the position does not get squared off for reasons such as liquidity constraints, option contract getting converted to ‘In The Money’ during market hours, etc, the costs (penalties/losses) of physical delivery will be applicable to the client. On Expiry Day, the delivery margin will be blocked for all long stock option positions (ITM, ATM, OTM) and will be calculated as per exchange-defined norms of VAR+ELM % of underline stock or 20%, whichever is higher.

Delayed Payment Charges

If the client does not clear the debit balance by settlement day, S A Artha Securities Private Limited will charge delay payment charges at 0.05% per day. As per exchange norms, in order to trade in derivatives, the margin needed to be 50% cash or cash equivalent and only 50 % non-cash. Any short fall in cash or cash equivalent will be leaved at the rate of 0.05% per day.

For the equity and derivative segment in the delivery/intraday position, 50% of the margin should be from cash or cash equivalent collateral, and the remaining 50% can be from the non-cash collateral margin. Delayed payment charges of 0.05% per day will be levied if there is a cash margin shortfall on delivery position. The client must always maintain 50% cash equivalent in their trading balance in order to avoid delayed payment charges.