BACKGROUND

M/s Bhaijee Portfolio Ltd.a Trading Member of National Stock Exchange of India Ltd. As per the requirement of Exchange & SEBI, Company has designed a "Risk Management Policy" for extending trading facility to its clients and in the respective segments of exchanges.

RMS works on the following concepts

1. Cash: The clear balance available in the customer's ledger account in our books.
2. Margin: The underlying stake provided by the customer in the form of cash, FDR and/or stock to mitigate market (price) or settlement (auction) risk
3. Exposure: The aggregate of the customer's obligations arising out of buy + sell trades awaiting settlement in the cash segment and profit/ loss amounts that are yet to be settled on the closed positions.
4. Exposure multiple: The number of times that exposure is allowed on the underlying margin sales on the cash segment would have to be made either on the availability of cash margin or on the availability of the stocks (which are to be sold) in our margin account, by executing a transfer before the sale order is initiated.
5. Stock qualifying for margin in cash segment transactions: Securities in the approved list of Stock Exchange as per SEBI guidelines.
6. Total Deposit: The aggregate of client deposit available with us in the form of cash, Shares (After Applicable Hair Cut) and FDR.


POLICIES & PROCEDURES UNDER RMS

1. Policy for Penny Stock: The stocks, which are appearing in the list of illiquid securities issued by the Exchanges every month. These stocks are generally considered to be highly speculative and high risk because of their lack of liquidity, large bi-ask spreads, small capitalization and limited following and disclosure. Depend on the market condition and RMS Policy of the company RMS reserve the right to refuse to provide the limit in Penny stocks and losses if any on account of such refusal shall be borne by client only.

2. Setting up client's exposure limits: The 'Bhaijee Portfolio' may from time to time impose and vary limits on the orders that the client can place through the our trading system (including exposure limits, turnover limits, limits as to the number, value and/or kind of securities in respect of which orders can be placed etc.). The client is aware and Bhaijee Portfolio Limited agrees that the 'Bhaijee Portfolio' may need to vary or reduce the limits or impose new limits urgently on the basis of the 'Bhaijee Portfolio' risk perception and other factors considered relevant by to us including but not limited to limits on account of exchange/SEBI directions/limits (such as broker level/market level limits in security specific/volume specific exposures etc.), and the 'Bhaijee Portfolio' may be unable to inform the client of such variation reduction or imposition in advance. The client agrees that the 'Bhaijee Portfolio' shall not be responsible for such variation, reduction or imposition or the client's inability or route any order through the 'Bhaijee Portfolio' trading system on account of any such variation, reduction or imposition of limits. The Client further agrees that the 'Bhaijee Portfolio' may at any time, at its sole discretion and without prior notice, prohibit or restrict the client's ability to place orders or trade in securities through the 'Bhaijee Portfolio', or it may subject any order place by the client to review before its entry into the trading systems any my refuse to execute/allow execution of orders due to but not limited to the reason of lack of margin/securities or the order being outside the limits set by us/exchange/SEBI and any other reasons which the 'Bhaijee Portfolio' may deem appropriate in the circumstances. The client agrees that the losses, if any on account of such refusal or due to delay caused by such review, shall be borne exclusively by the client alone. We have margin based RMS System, Total deposits of the clients are uploaded in the system and client may take exposure on the basis of margin applicable for respective security as per VAR based margining system of the stock exchange and/or margin defined by RMS based on their Risk Perception. Client may take benefit of "credit for sale" i.e. benefit of share held as margin by selling the same by selection Delivery option through order entry window on the trading platform, the value of share sold will be added with the value of deposit and on the basis of that client may take fresh exposure.

3. Applicable Brokerage Rate: Exclusive of Stamp duty, Service tax, STT (Securities Transaction Tax) and any other statutory levies Brokerage will be charged within the limits prescribed by SEBI/Exchange. It is hereby further, clarified that brokerage on option contract shall be charged on the premium amount at which the option contract was bought or sold, not on the strike price of the option contract. Subject to revision at our sole discretion and as informed by a circular sent by ordinary post/courier services/email. It would be the duty of client to note the said charges regularly and periodically and shall not raise any dispute or claim in respect to said charges at any later stage. Further it is clarified that the above mentioned charges could vary from client to client at the sole discretion of SIL and No client would have any right to compare or claim charges charged from other client by SIL

4. Imposition of penalty charges: The Client agrees that the 'Bhaijee Portfolio' may impose fines / penalties for any orders / trades / deals / actions of the client which are contrary to this agreement / rules / regulations / bye laws of the exchange or any other Bhaijee Portfolio Limited law for the time being in force, at such rates and in such form as it my deem fit. Further where the 'Bhaijee Portfolio' has to pay any fine or bear any punishment from any authority in connection with / as a consequence of /in relation to any of the orders / trades / deals actions of the client, the same shall borne by the client.

5. The right to sell client's securities or close client's positions, without giving notice to the client, on account of non payment of client's due: Without prejudice to the our other rights (Including the right to refer the matter to arbitration), the 'Bhaijee Portfolio' shall be entitled to liquidate /close out all or any of the clients position without giving notice to the client for non payment of margins or other amounts including the pay in obligation, outstanding debts etc and adjust the proceeds of such liquidation/close out, if any, against the clients liabilities / obligation. The client shall ensure timely availability of funds/securities in form and manner at designated time and in designated bank and depository account(s), for meeting his/her/its pay in obligation of funds and securities. Any and all losses and financial charges on account of such liquidations/closing out shall be charged to& born by the client. In case of securities lying in margin account/client beneficiary account and having corporate actions like Bonus, Stock split, Right issue etc, for margin or other purpose the benefit of shares due to received under Bonus, Stock split, Right issue etc. will be given when the shares is actually received in the 'Bhaijee Portfolio' designated demat account. In case the payment of the margin/securities is made by the client through a bank instrument, the 'Bhaijee Portfolio' shall be at liberty to give the benefit/credit for the same only on the realization of the funds from the said bank instruments etc, at the absolute discretion of the 'Bhaijee Portfolio'. Where the margin/security is made available by way of securities or any other property, 'Bhaijee Portfolio' has empowered to decline its acceptance as margin/security &/or to accept it at such reduced value as the 'Bhaijee Portfolio' may deem fit by applying haircuts or by valuing it by marking it to market or by any other method as the 'Bhaijee Portfolio' may deem fit in its absolute discretion. The 'Bhaijee Portfolio' has the right but not the obligation, to cancel all pending orders and to sell/close/liquidate all open positions/securities/shares at the pre-defined square off time or when Mark to Market (M-T-M) percentage reaches or crosses stipulated margin percentage, whichever is earlier, The 'Bhaijee Portfolio' will have sole discretion to decide referred stipulated margin percentage depending upon the market condition. In the event of such square off, the client agrees to bear all the losses based on actual executed prices, the client shall also be solely liable for all and any penalties and charges levied by the exchange(s).

6. Shortages in obligations arising out of internal netting of traders: 'Bhaijee Portfolio' shall not be obliged to deliver and securities or pay any money to the client unless and unit the same has been received by the 'Bhaijee Portfolio' from the exchange, Bhaijee Portfolio Limited the clearing corporation/clearing house or other company or entity liable to make the payment and the client has fulfilled his/her/its obligations first. The policy any procedure for settlement of shortage in obligations arising out of internal netting of the traders is as under: o The Short delivering client is debited by an amount equivalent to 20% above of closing rate of day prior to pay in/Payout Day. The securities delivered short are purchased from market on T+2 day and the purchase consideration (inclusive of all statutory taxes & levies) is debited to the short delivering seller client along with reversal entry of provisionally amount debited earlier. o If securities cannot be purchased from market due to any force majeure condition, the short delivering seller is debited at the closing rate on T+2 day or Auction day on Exchange +10% where the delivery is matched partially or fully at the Exchange Clearing, the delivery and debits/credits shall be as per Exchange Debits and Credits. o In cases of securities having corporate actions all cases of short delivery of cum transactions which cannot be auctioned on cum basis or where the cum basis auctioned on cum basis or where the cum basis auction payout is after the book closure/record date, would be compulsory closed out at higher of 10% above the official closing price from first trading day of the settlement till the auction day. o Conditions under which a client may not be allowed to take further position or the broker may close the existing position of a client. o We have margin based RMS system. Client may take exposure up to the amount of margin available with us. Client may not be allowed to take position in case of non-availability/shortage of margin as per our RMS policy of the company. The existing position of the client is also liable to square off/close out without giving notice due to shortage or margin/non making of payment for their paying obligation/outstanding debts.

7. Temporarily suspending or closing a client's account at the client's request: On the request of the client in writing, the client account can be suspended temporarily and same can be activated on the written request of the client only. During the period client account is suspended, the market transaction in the client account will be prohibited. However client shares/ledger balance settlement can take place. On the request of the client in writing, the client account can be closed provided the client account is settled. If the client wants to reopen the account in the case client has to again complete the KYC requirement.

8. Deregistering a client : Not with standing anything to the contrary stated in the agreement, the 'Bhaijee Portfolio' shall be entitled to terminate the agreement with immediate effect in any of the following circumstances: o If the action of the client are prima facie illegal/improper or such as to manipulate the prices of any securities or disturb the normal/proper functioning of securities or disturb the normal/proper functioning of the marketing, either alone or in conjunction with others. o If there is any commencement of a legal process against the client under any law in force; o On the death/lunacy or other disability of the Client; o If the client being a partnership firm, has any steps taken by the Client and/or its partners for dissolution of the partnership; o If the Client suffers any adverse material change in his/her/its financial position or default in any other agreement with the 'Bhaijee Portfolio'; o If there is reasonable apprehension that the Client unable to pay its debts or the Client has admitted its inability to pay its debts, as they become payable; o If the Client is in breach of any term, condition or covenant of this Agreement; o If the Client has made any material misrepresentation of facts, including (without limitation) in relation to the Security o If a receiver, administrator or liquidator has been appointed or allowed to be appointed of all or any part of the undertaking of the Client; o If the Client have taken or suffered to be taken any action for its reorganization, liquidation or dissolution; oIf the Client has voluntarily or compulsorily become the subject of proceedings under any bankruptcy or insolvency law or being a company, goes into liquidation or has a receiver appointed in respect of its assets or refers itself to the Board for Industrial and Financial Reconstruction or under any other law providing protection as a relief undertaking: o If any covenant or warranty of the Client is incorrect or untrue in any material respect

9. Inactive Client account: -Client account will be considered as inactive if the client does not trade for period of six month. Calculation will be done at the beginning of every month and those clients who have not traded even a single time will be considered as inactive, the shares/credit ledger balance if any will be transferred to the client within one week of the identifying the client as inactive. The client has to make written request for reactivation of their account. Trading in Exchange is in Electronic Mode, based on VSAT, leased line, ISDN, Modern and VPN, combination of the technologies and computer systems to place and route orders. I/we understand that there exists a possibility of communication failure or system problems or slow or delayed response from system or trading halt or any break down in our back office/front end system, or any such other problems/glitch whereby not being able to establish access to the trading system/network, which may be beyond your control and may result in delay in processing or not processing buy or sell Orders either in part or in full. I/We shall be fully liable and responsible for any such problem/fault.

10. Client Acceptance of Policies and Procedures stated here in above: I/We have fully understood the same and do hereby sign the same and agree not to call into question the validity, enforceability and applicability of any provision/clauses this documents any circumstances what so ever. These Policies and Procedures may be amended/changed unilaterally by the broker, provided the change is informed to me/us with through any one or more means or methods, I/we agree never to challenge the same on any grounds including delayed receipt/ non receipt or any other reasons whatsoever. These Policies and Procedures shall always be read always be read along with the agreement and shall be compulsorily referred to while deciding any dispute/difference or claim between me/us and "Bhaijee Portfolio Ltd." before any court of law/judicial/adjudicating authority including arbitrator/mediator etc.


PMLA Policy


Accordingly the Company has laid down following policy guidelines: Principal Officer: Mr. Anil Sharma is appointed as the Principal Officer. He will be responsible for implementation of internal controls & procedures for identifying and reporting any suspicious transaction or activity to the concerned authorities. Principle officer has the right of timely access to customer illegal but anti-national as well. As a market participant it is evident that strict and vigilant tracking of all The Government of India has serious concerns over money laundering activities which are not only identification data, other CDD information and is able to report the same to senior management or the board of directors.

Purpose & Scope:
As a Financial Market Intermediary (which includes a stock-broker, sub-broker) we need to maintain a record of all the transactions; the nature and value of which has been prescribed in the Rules under the PMLA. Accordingly all the back office and trading staff is instructed is instructed to observe the following safeguards:
1 No Cash transactions for trading in securities shall be allowed from any client in the normal course of business.
2 Maintain a record of all the transactions; the nature and value of which has been prescribed in the Rules notified under the PMLA.such transactions include:
Cash transactions of the value of more than Rs 10 lakhs or its equivalent in foreign currency.
All series of cash transactions integrally connected to each other which have been valued below Rs 10 lakhs or its equivalent in foreign currency where such series of transactions take place within one calendar month.
All suspicious transactions whether or not made in cash.
3
Frequent off Market transfers from one BO account to another shall be scrutinized and asked for. In absence of valid reason case or found suspicious, it shall be brought to the notice of Principal Officer.
4 Trading beyond ones declared income: The turnover of the clients should be according to their declared means of income. Any abnormal increase in client's turnover shall be reported to Principal Officer. The Back Office staff should take due care in updating the clients' financial details and shall periodically review the same.
Policies & Procedures:
A) Client identification procedure:
The 'Know your Client' (KYC) Policy:
a) While establishing the intermediary - client relationship -No account shall be opened unless all the KYC Norms as prescribed from time to time by the SEBI / Exchanges are duly complied with, all the information as required to be filled in the KYC form (including financial information, occupation details and employment details) is actually filled in and the documentary evidence in support of the same is made available by the client. Moreover all the supporting documents should be verified with originals and client should sign the KYC & MCA in presence of our own staff and the client should be introduced by an existing clients or the known reference.
-The information provided by the client should be checked though independent source namely.
-Pan No must be verified from Income Tax We Site
-Address must be verified by sending Welcome Letter / Qtly Statement of Account, and in case any document returned undelivered the client should be asked to provide his new address proof before doing any further transaction.
-We must exercise additional due diligence in case of the Clients of Special Category which include but not limited to :
i. Non resident clients
ii.High networth clients ( i.e the clients having networth exceeding 20 Lakhs and doing the intra day trading volume of more than 2 Crore and daily delivery volume more than Rs 20 Lakhs)
iii. Trust, Charities, NGOs and organizations receiving donations
iv. Companies having close family shareholdings or beneficial ownership
v. Politically exposed persons (PEP) of foreign origin
vi.Current / Former Head of State, Current or Former Senior High profile politicians and connected persons (immediate family, Close advisors and companies in which such individuals have interest or significant influence)
vii. Companies offering foreign exchange offerings
viii. Clients in high risk countries (where existence / effectiveness of money laundering controls is suspect, where there is unusual banking secrecy, Countries active in narcotics production, Countries where corruption (as per Transparency International Corruption Perception Index) is highly prevalent, Countries against which government sanctions are applied, Countries reputed to be any of the following - Havens / sponsors of international terrorism, offshore financial centres, tax havens, countries where fraud is highly prevalent.
ix. Non face to face clients ?
x. Clients with dubious reputation as per public information available etc.
xi.Such Other persons who as per our independent judgment may be classified as CSC. -In case we have reasons to believe that any of our existing / potential customer is a politically exposed person (PEP) we must exercise due diligence, to ascertain weather the customer is a politically exposed person (PEP), which would include seeking additional information from clients and accessing publicly available

-The dealing staff must obtain senior management`s prior approval for establishing business relationships with Politically Exposed Persons. In case an existing customer is subsequently found to be, or subsequently becomes a PEP, dealing staff must obtain senior management`s approval to continue the business relationship.
-We must take reasonable measures to verify source of funds of clients identified as PEP.
-The client should be identified by using reliable sources including documents / information and we should obtain adequate information to satisfactorily establish the identity of each new client and the purpose of the intended nature of the relationship.
-The information should be adequate enough to satisfy competent authorities (regulatory / enforcement authorities) in respect of statutory and regulatory requirement in future that due diligence was observed by the intermediary in compliance with the Guidelines. Each original document should be seen prior to acceptance of a copy.
-Failure by prospective client to provide satisfactory evidence of identity should be noted and reported to the higher authority.
-While accepting a client the underlying objective should be to follow the requirements enshrined in the PML Act, 2002 SEBI Act, 1992 and Regulations, directives and circulars issued there under so that we are aware of the clients on whose behalf we are dealing.
b) While carrying out transactions for the client -RMS department should monitor the trading activity of the client and exercise due diligence to ensure that the trading activity of the client is not disproportionate to the financial status and the track record of the client.
Payments department should ensure that payment received form the client is being received in time and through the bank account the details of which are given by the client in KYC form and the payment through cash / bearer demand drafts should not be entertained.
B) Policy for acceptance of clients:
The following safeguards are to be followed while accepting the clients:
a) No account is opened in a fictitious / benami name or on an anonymous basis. To ensure this we must insist the client to fill up all the necessary details in the KYC form in our presence and obtain all the necessary documentary evidence in support of the information filled in KYC. We must verify all the documents submitted in support of information filled in the KYC form with the originals and in-person verification should be done by our own staff. Moreover new client should either be introduced by an existing customer or by the senior official of the company. In case we have any doubt that in-complete / fictitious information is submitted by the client, we must ask for such additional information so as to satisfy ourselves about the genuineness of the client and the information of the client before accepting his registration. We have maintained a updated list of individuals / entities which are subject to various sanctions / measures pursuant to United Nations Security Council Resolutions (UNSCR), available from the URL names of customers in such list of individuals and entities subject to various sanction measures of UN Security council Committee, other publicly available information and complying with Government order UAPA. and verify the http://www.un.org/sc/committees/1267/consolist.shtml
b) Factors of risk perception of the client :
Risk
Particulars
Perception
Factors of Risk Perception having regard to : Client`s Location ( Registered / Correspondence/ other address )
-Face to Face clients within city
Low Risk
-Face to Face clients of other than city Low Risk
-Client Introduced by existing Face to Face Clients Low Risk
-Client Introduced by other Existing Clients Medium Risk -
Direct Clients of city
Medium Risk
-Direct Clients of other than city High Risk
-Non resident Clients
High Risk
Nature of Business Activity, Trading Turnover etc
-Retail clients ( average daily turnover < Rs 10 Lakhs or net settlement obligation < Rs 2 Lakhs ) Low Risk
-Retail clients ( average daily turnover < Rs 25 Lakhs or net settlement obligation < Rs 5 Lakhs ) Medium Risk
-HNI Clients ( average daily turnover > Rs 25 Lakhs or net settlement obligation > Rs 5 Lakhs ) High Risk
Manner of Making Payment
-Regular payment through A/c payee cheque from the Bank A/c already mapped with us
Low Risk
-Payment through A/c payee cheque from the Bank A/c other than one already mapped with us Medium Risk
-Payment through Banker`s Cheque / Demand Draft / Cash High Risk Client of Special Categories as defined under Para A (a) of these Guidelines Very High
Risk
c) Ensure that no account is opened where we unable to apply appropriate clients due diligence measures / KYC policies. This shall be applicable in cases where it is not possible to ascertain the identity of the client or information provided by the client is suspected to be non genuine or perceived non co-operation of the client in providing full and complete information. We should not continue to do business with such a person and file a suspicious activity report. We should also evaluate whether there is suspicious trading in the account and whether there is a need to freeze or close the account.
C) Policy for Recruitment of personnel
The HR Department is instructed to cross check all the references and should take adequate safeguards to establish the authenticity and genuineness of the persons before recruiting. The department should obtain the following documents:

1 Photographs
2 Proof of address
3 Identity proof
4 Proof of Educational Qualification
5 References
D) Retention of records
Records pertaining to active clients and staff details collected for recruitment shall be kept safely. Further company has a policy to retain all records relating to PMLA provision for at least a period of 10 years. We have also retained the statutory and regulatory compliance relating records and co-operate with law enforcement authorities with timely disclosure of information.
E) Information to be maintained
Company will maintain and preserve the following information in respect of transactions referred to in Rule 3 of PMLA Rules for the period of 10 years.
I. Client Registration Forms
II. Contract Note
III. the nature of the transactions;
IV. the amount of the transaction and the currency in which it denominated;
V. the date on which the transaction was conducted; and
VI. the parties to the transaction. Employees' Training
F) Company adopted an ongoing employee training program so that the members of the staff are adequately trained in AML and CFT procedures. Training requirements have specific focuses for frontline staff, back office staff, compliance staff, risk management staff and staff dealing with new customers. It is crucial that all those concerned fully understand the rationale behind these guidelines, obligations and requirements, implement them consistently and are sensitive to the risks of their systems being misused by unscrupulous elements.
G) Investors Education Implementation of AML/CFT measures requires back office and trading staff to demand certain information from investors which may be of personal nature or which have hitherto never been called for. Such information can include documents evidencing source of funds/income tax returns/bank records etc. This can sometimes lead to raising of questions by the customer with ? regard to the motive and purpose of collecting such information. There is, therefore, a need for the back office and trading staff to sensitize their customers about these requirements as the ones emanating from AML and CFT framework. The back office and trading staff should prepare specific literature/ pamphlets etc. so as to educate the customer of the objectives of the AML/CFT programme.
H) Reporting to FIU As per our observations if any transaction of suspicious nature is identified it must be brought to the notice of the Principal Officer who will submit Suspicious Transaction Reporting (STR) to the FIU if required.
Above said policies are reviewed by us on regular basis to keep it updated as per the various amendments in the PMLA rules.

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