Rights & Obligations of Stock Brokers & Clients for Margin Trading Facility (MTF)

Client shall receive all communications in a mode mutually agreed between the broker and the client regarding confirmation of orders/trades, margin calls, decision to liquidate the position/security.

Client shall be free to take the delivery of the securities at any time by repaying the amounts that was paid by the Stock Broker to the Exchange towards securities after paying all dues.

Client has a right to change the securities collateral offered for Margin Trading Facility at any time so long as the securities so offered are approved for margin trading facility.

Client may close / terminate the Margin Trading Account at any time after paying the dues.

Client shall, in writing in his own hand or in any irrefutable electronic method, agree to avail of Margin Trading Facility in accordance with the terms and conditions of Margin Trading Facility offered by the broker, method of communication for confirmation of orders/trades, margin calls and calls for liquidation of collateral/security/position.

Client shall inform the broker of its intent to shift the identified transaction under Margin Trading Facility within the time lines specified by the broker failing which the transaction will be treated under the normal trading facility

Client shall place the margin amounts as the Stock Broker may specify to the client from time to time.

On receipt of ‘margin call’, the client shall make good such deficiency in the amount of margin placed with the Stock Broker within such time as the Stock Broker may specify..

By agreeing to avail Margin Trading Facility with the broker, client is deemed to have authorized the broker to retain and/or pledge the securities provided as collateral or purchased under the Margin Trading Facility till the amount due in respect of the said transaction including the dues to the broker is paid in full by the client

Client shall lodge protest or disagreement with any transaction done under the margin trading facility within the timelines as may be agreed between the client and broker.

Stock Broker and client may agree between themselves the terms and condition including commercial terms if any before commencement of MTF.

Stock broker may set up its own risk management policy that will be applicable to the transactions done under the Margin Trading Facility. Stock broker may make amendments there to at any time but give effect to such policy after the amendments are duly communicated to the clients registered under the Margin Trading Facility.

The broker has a right to retain and/or pledge the securities provided as collateral or the securities bought by the client under the Margin Trading Facility.

The broker may liquidate the securities if the client fails to meet the margin call made by the broker as mutually agreed of liquidation terms but not exceeding 5 working days from the day of margin call.

Stock broker shall agree with the client the terms and condition before extending Margin Trading Facility to such client. However, for clients who already have existing trading relationship and want to avail of Margin Trading Facility, stock broker may take consent in writing in his own hand or in any irrefutable electronic method after stock broker has communicated the terms and conditions of Margin Trading Facility to such existing clients.

The terms and conditions of Margin Trading Facility shall be identified separately, in a distinct section if given as a part of account opening agreement.

The mode of communication of order confirmation, margin calls or liquidation of position/security shall be as agreed between the broker and the client and shall be in writing in his own hand or in any irrefutable electronic method. Stock broker shall prescribe and communicate its margin policies on haircuts/ VAR margins subject to minimum requirements specified by SEBI and exchanges from time to time.

The Stock Broker shall monitor and review on a continuous basis the client’s positions with regard to MTF. It is desirable that appropriate alert mechanism is set up through which clients are alerted on possible breach of margin requirements.

Any transaction to be considered for exposure to MTF shall be determined as per the policy of the broker provided that such determination shall happen not later than T + 1 day.

If the transaction is entered under margin trading account, there will not be any further confirmation that it is margin trading transaction other than contract note.

In case the determination happens after the issuance of contract, the broker shall issue appropriate records to communicate to Client the change in status of transaction from Normal to Margin trading and should include information like the original contract number and the margin statement and the changed data.

The Stock Broker shall make a ‘margin call’ requiring the client to place such margin; any such call shall clearly indicate the additional/deficient margin to be made good.

Time period for liquidation of position/security shall be in accordance declared policy of the broker as applicable to all MTF clients consistently. However, the same should not be later than 5 working (trading) days from the day of ‘margin call’. If securities are liquidated, the contract note issued for such margin call related transactions shall carry an asterisk or identifier that the transaction has arisen out of margin call.

The daily margin statements sent by broker to the client shall identify the margin/collateral for Margin Trading separately.

Margin Trading Accounts where there was no transaction for 90 days shall be settled immediately.

The stocks deposited as collateral with the stock broker for availing margin trading facility (Collaterals) and the stocks purchased under the margin trading facility (Funded stocks) shall be identifiable separately and there shall not be any comingling for the purpose of computing funding amount;

Stock Broker shall close/terminate the account of the client forthwith upon receipt of such request from the client subject to the condition that the client has paid dues under Margin Trading Facility.

The margin trading arrangement between the stock broker and the client shall be terminated; if the Stock Exchange, for any reason, withdraws the margin trading facility provided to the Stock Broker or the Stock Broker surrenders the facility or the Stock Broker ceases to be a member of the stock exchange.

The MTF facility may be withdrawn by the broker, in the event of client committing any breach of any terms or conditions therein or at anytime after due intimation to client allowing such time to liquidate the MTF position as per the agreed liquidation terms without assigning any reason. Similarly, client may opt to terminate the margin trading facility in the event of broker committing any breach of any terms or conditions therein or for any other reason.

In the event of termination of this arrangement, the client shall forthwith settle the dues of the Stock Broker. The Stock Broker shall be entitled to immediately adjust the Margin Amount against the dues of the client, and the client hereby authorizes the Stock Broker to make such adjustment.

After such adjustment, if any further amount is due from the client to the Stock Broker, the client shall settle the same forthwith. Upon full settlement of all the dues of the client to the Stock Broker, the Stock Broker shall release the balance amount to the client.

If the client opts to terminate the margin trading facility, broker shall forthwith return to the client all the collaterals provided and funded securities retained on payment of all the dues by clients.

Stock Broker/ Trading Member is eligible to provide Margin Trading Facility (MTF) in accordance with SEBI & Exchange Guidelines as specified from time to time.

Stock Broker/ Trading Member desirous of extending MTF to their clients is required to obtain prior permission of BSE. Stock Broker/ Trading Member may note that BSE has the right to withdraw the permission at anytime.

Stock Broker/ Trading Member shall extend the MTF to the client, on such terms and conditions as specified by the Stock Exchange / SEBI from time to time. Stock Broker/ Trading Member and the client shall abide by the requirements of the margin trading framework, including rights and obligations, as prescribed by Stock Exchange/ SEBI/ Stock Broker/ Trading Member.

Stock Broker/ Trading Member shall intimate all the terms and conditions, including maximum allowable exposure, specific stock exposures etc., as well as the rights and obligations to the client desirous of availing MTF.

Stock Broker/ Trading Member may, at its sole and absolute discretion, increase the limit of initial and/or maintenance margin, from time to time. The Client shall abide by such revision, and where there is an upward revision of such margin amount, he agrees to make up the shortfall within such time as the Stock Broker/ Trading Member may permit. It may however, be noted that the initial/ maintenance margins shall never be lower than that prescribed by Stock Exchange/ SEBI.

Stock Broker/ Trading Member shall provide MTF only in respect of such shares, as may be permitted by Stock Exchange/ SEBI.

Stock Broker/ Trading Member shall liquidate the securities and other collateral, if the client fails to meet the margin call to comply with the margin requirement as specified by Stock Exchange/SEBI/ Stock Broker/ Trading Member. In this regard, Stock Broker/ Trading Member shall also list down situations/ conditions in the which the securities may be liquidated (Stock Broker/ Trading Member to list down situations/ conditions):

Stock Broker/ Trading Member shall not use the funds of one client to provide MTF to another client, even if the same is authorized by the first client.

IPF shall not be available for transactions done on the Stock Exchange, through MTF, in case of any losses suffered in connection with the MTF availed by the client.

Initial margins to be provided by the clients will be decided by the company management as per its Risk Management Policy from time to time and same can be higher than the margins prescribed by regulator/exchanges. The client agrees to pay such applicable initial margins or such other margins as are considered necessary by the stock broker or the Exchange or as may be directed by SEBI from time to time as applicable to Margin Trading segment in which the client trades.

The client will pay the initial margin to the Stock Broker in form of cash, cash equivalent or Group I equity shares (via pledging of securities), on which appropriate hair cut will be applicable. RBL reserves the right to refuse acceptance of any share or cash equivalent towards Initial margin at any point of time.

The Margin Trading facility is applicable to Group I scrips or as specified by SEBI / Stock Exchange(s) from time to time. RBL may choose to not to provide Margin Trading facility on certain eligible scrips at its discretion as per its risk management policy.

The client understands that it is his obligation to identify orders/trades to be shifted under MTF at the time of placement of order

The initial margin required shall be determined by RBL at its sole discretion depending upon the security and the market conditions. In case of any further requirement of margin due to any reason in existing positions, the client undertakes to pay the same on immediate basis

Notwithstanding availability of margin in the client account, RBL reserve the right to revoke facility and square off open position in the event i) of corporate actions like demergers, stock splits, bonus shares, mergers, or buybacks etc ii) category/price band of a security being reduced by exchanges

RBL reserves the right to square-off open MTF positions of client or convert the same to normal trades regardless of the availability of required margin in the client’s MTF ledger in case of client’s failure to approve margin pledge request, if any, raised by RBL on behalf of the client for pledging of securities purchased under MTF in favour of RBL on an immediate basis and maximum by T+1 day or in period as may be extended by RBL. Client will be solely responsible for losses, if any, arising due to the action of RBL.

RBL may close the existing / partial positions of a client if the margin cover falls below minimum prescribed margin limits as specified by SEBI / Exchange(s) / RBL guidelines. If debit / margin shortfall still exist after closing the client’s positions, collaterals provided by client may also be liquidated to recover the debits / margin shortfalls. Similarly RBL may choose not to allow further positions in MTF or may close the existing MTF position of a client, in case there are outstanding debits in client’s normal trading account.

The client agrees that he will keep himself updated with regards to changes in the eligible stocks / collaterals that can be purchased / furnished for the Margin Trading Facility by visiting Exchange websites. The client further agrees that he will take necessary action to replenish the margins (Cash/stocks as collaterals) in case of any margin shortfall to avoid any RMC Actions.

In addition to what the client has agreed in the agreement, RBL may choose to terminate a client’s account with immediate effect, but not limited to the following reasons –

• If the client is debarred by SEBI or any other regulatory authority.

• As a part of surveillance measure, if a client appears to be indulging in manipulative practices.

• Under the circumstances when there is a reasonable ground to believe that the client is unable to clear its dues or has admitted its inability to pay its debt.

• If the client violates any of the terms of the agreement.

Interest will be charged on the funded amount at rate of 0.0575% per day or at rates as intimated by RBL and RBL in its sole discretion may allow the benefit from the funded amount for (i) applicable cash margin for MTF transaction provided by the client until the pay-in timing or (ii) applicable cash margin for MTF transaction provided by the client after the Pay-in timing. Publishing the rate of interest at RBL website shall constitute as proper intimation to the Client.

In case client is already availing Margin Trading Facility with other stock broker, client needs to inform RBL before availing this facility with RBL.

Collateral/Securities provided/pledged by client towards Margin should be totally unencumbered.

Any disputes arising between the client and RBL in connection with the margin trading facility shall have the same treatment as normal trades and will be covered under the investor grievance redressal mechanism, arbitration mechanism of the stock exchange.

The client confirms that client is neither the promoter nor is associated with the promoters of the security in which the client is creating a position. The client undertakes to inform RBL prior to creating any position in security in case the client is either promoter or part of promoter group of the same security.

The client must ensure that delivery of shares sold under the facility is available in the account. Any sale of security basis expected delivery from exchanges against prior trades shall be at the risk of the client. If Exchange delivers shares through a market auction or closes out the prior buy transaction of the client, all costs and consequences of the auction or closeout of sale transaction of the client are to be fully borne by the client.

RBL would not allow client to take further positions and/or existing positions may be squared off at its discretion on occurrence of any of the following events:

• If at any point of time total exposure across all stocks of all the Clients of RBL taken together under this facility exceeds the SEBI / Stock Exchange prescribed maximum allowable exposure limit specified for a stock broker. The client agrees that RBL may set this limit at its discretion which can be lower than the limits prescribed by SEBI as part of its risk management process.

• If the client exceeds or is about to exceed the maximum allowable exposure for a single Client. The client understands that SEBI has prescribed a maximum limit for allowing exposure to a single client. The client agrees that RBL may set this single client exposure limit at its discretion which can be lower than the limits prescribed by SEBI as part of its risk management process.

• If the total exposure in a particular stock of all the clients of RBL taken together under this facility reaches the maximum allowable limit for that stock as defined by RBL.

• If the exposure in a particular stock by a single client under this facility reaches the maximum allowable limit for that stock for a single client as defined by RBL

• If the stock moves out from the list of eligible stocks under MTF and becomes ineligible for offering under MTF product

• Any other circumstances due to change in regulatory requirements from time to time or risk management process due to changing market conditions.

The action of liquidation of client’s position / collateral may be carried out by RBL at any point of time once the cause for the same has arisen. Even though RBL would endeavor to give prior notice of the same to the client, however, the notice may not be possible under certain situation. The client agrees to continuously monitor his positions and clear the shortfall on immediate basis.

The client agrees that method of communication which RBL may use to inform/contact/give notice/trade confirmations etc to the client can be any one or combination of any these methods i.e. email, sms, whatsapp messages/calls, telephonic calls, flashes on trading window.