A. Refusal of orders/restrictions on trading in penny stocks and illiquid stocks

EDEL Investments Limited (Edelweiss) may at his discretion refuse to execute any buy or sell of any scrip / shares / stock / derivatives contract on behalf of the client including but not restricted to dealings in penny stocks, illiquid stocks, infrequently traded stocks /contract, stocks in Z category, Trade to Trade or any other category etc if Edelweiss / Exchanges / Regulatory Authorities is of the view that such execution would adversely affect market integrity or give rise to regulatory / disciplinary actions / concerns. The restriction on the stock/securities may be as to the price, quantity or mode of placement of orders. Edelweiss reserves the right to disable certain scrips for trading on online trading platform and/or on authorised person’s terminals and/or on terminals at various locations of Edelweiss or put quantity or price restrictions while putting trade orders. The penny stock would mean any stock trading at a price less than Rs. 10 or at a price less than the face value or any other stock specified by the Regulatory Body/Stock Exchange as such or which are appearing in the list of illiquid securities issued by the Exchanges every month. In general terms, it is a low priced, speculative security or a very small company, regardless of market capitalization.

The above referred restrictions are placed on the trading activities of the client as the stock may be exposed to price rigging and other market manipulative activities. Clients may note that for risk mitigation, Edelweiss shall have the right to reject the orders placed by the client and/or put circuit breakers to discourage trades getting executed at unrealistic prices from the current market price of the security or prohibit the client from trading in illiquid securities which creates artificial liquidity or manipulates prices or to discourage client from cross/ synchronized trading and Edelweiss shall not be liable for any loss arising out of non-acceptance or rejection of the client orders for any such reason if the client fails to give sufficient reason for placing such orders.

B. Setting up client s exposure limits

Edelweiss may at its discretion permit/allow such exposure limit for trading by Client as it deems fit (including but not limited to exposure limits, turnover limits, limits as to number, value and/kind of securities/ contracts in respect of which buy or sell orders can be placed) despite the fact that the client may have adequate or more than adequate required margin in place. Such exposure limit may operate specific to a security or contract and/or on an aggregate basis whether on the buy or the sell side, based on Edelweiss assessment of the associated risks having due regard to all relevant factors. Further, Edelweiss may modify, change or alter such limit or the conditions attached thereto from time to time as may be deemed fit on the basis of its risk perception and other relevant factors. Further Edelweiss may as risk containment measure at any time at its sole discretion and without prior notice, prohibit or restrict the client to place the orders or trade in all or some of securities/contracts despite the fact that the client may have adequate or more than adequate required margin in place. At the sole discretion of Edelweiss, the client shall be permitted to trade upto a pre- determined number of times of the margin (the Multiple) and the quantum of the Multiple on the margin

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1. The client shall invest/trade in those securities / contracts / other instruments admitted to dealings on the Exchanges as defined in the Rules, Byelaws and Regulations of Exchanges / Securities and Exchange Board of India (SEBI) and circulars / notices issued there under from time to time.

2. The stock broker, and the client shall be bound by all the Rules, Byelaws and Regulations of the Exchanges and circulars/notices issued there under and Rules and Regulations of SEBI and relevant notifications of Government authorities as may be in force from time to time.

3. The client shall satisfy itself of the capacity of the stock broker to deal in securities and/or deal in derivatives contracts and wishes to execute its orders through the stock broker and the client shall from time to time continue to satisfy itself of such capacity of the stock broker before executing orders through the stock broker.

4. The stock broker shall continuously satisfy itself about the genuineness and financial soundness of the client and investment objectives relevant to the services to be provided.

5. The stock broker shall take steps to make the client aware of the precise nature of the Stock broker's liability for business to be conducted, including any limitations, the liability and the capacity in which the stock broker acts.

6. The Authorised person shall provide necessary assistance and co-operate with the stock broker in all its dealings with the client(s).

   CLIENT INFORMATION

7. The client shall furnish all such details in full as are required by the stock broker in "Account Opening Form" with supporting details, made mandatory by stock exchanges/SEBI from time to time.

8. The client shall familiarize himself with all the mandatory provisions in the Account Opening documents. Any additional clauses or documents specified by the stock broker shall be non-mandatory, as per terms & conditions accepted by the client.

9. The client shall immediately notify the stock broker in writing if there is any change in the information in the 'account opening form' as provided at the time of account opening and thereafter; including the information on winding up petition/insolvency petition or any litigation which may have material bearing on his capacity. The client shall provide/update the financial information to the stock broker on a periodic basis.

10. The stock broker shall maintain all the details of the client as mentioned in the account opening form or any other information pertaining to the client, confidentially and that they shall not disclose the same to any person/authority except as required under any law/regulatory requirements. Provided however that the stock broker may so disclose information about his client to any person or authority with the express permission of the client.

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This document contains important information on trading in Equities/Derivatives Segments of the stock exchanges. All prospective constituents should read this document before trading in Equities/Derivatives Segments of the Exchanges.

Stock exchanges/SEBI does neither singly or jointly and expressly nor impliedly guarantee nor make any representation concerning the completeness, the adequacy or accuracy of this disclosure document nor have Stock exchanges/SEBI endorsed or passed any merits of participating in the trading segments. This brief statement does not disclose all the risks and other significant aspects of trading.

In the light of the risks involved, you should undertake transactions only if you understand the nature of the relationship into which you are entering and the extent of your exposure to risk.

You must know and appreciate that trading in Equity shares, derivatives contracts or other instruments traded on the Stock Exchange, which have varying element of risk, is generally not an appropriate avenue for someone of limited resources/limited investment and/or trading experience and low risk tolerance. You should therefore carefully consider whether such trading is suitable for you in the light of your financial condition. In case you trade on Stock exchanges and suffer adverse consequences or loss, you shall be solely responsible for the same and Stock exchanges/its Clearing Corporation and/or SEBI shall not be responsible, in any manner whatsoever, for the same and it will not be open for you to take a plea that no adequate disclosure regarding the risks involved was made or that you were not explained the full risk involved by the concerned stock broker. The constituent shall be solely responsible for the consequences and no contract can be rescinded on that account. You must acknowledge and accept that there can be no guarantee of profits or no exception from losses while executing orders for purchase and/or sale of a derivative contract being traded on Stock exchanges.
It must be clearly understood by you that your dealings on Stock exchanges through a stock broker shall be subject to your fulfilling certain formalities set out by the stock broker, which may inter alia include your filling the know your client form, reading the rights and obligations, do's and don'ts, etc., and are subject to the Rules, Byelaws and Regulations of relevant Stock exchanges, its Clearing Corporation, guidelines prescribed by SEBI and in force from time to time and Circulars as may be issued by Stock exchanges or its Clearing Corporation and in force from time to time.
Stock exchanges does not provide or purport to provide any advice and shall not be liable to any person who enters into any business relationship with any stock broker of Stock exchanges and/or any third party based on any information contained in this document. Any information contained in this document must not be construed as business advice. No consideration to trade should be made without thoroughly understanding and reviewing the risks involved in such trading. If you are unsure, you must seek professional advice on the same.

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I. TRADING FACILITY

With reference to the SEBI circular dated August 22, 2011, the client has signed the account opening form, read and understood uniform documentation (right and obligations, RDD, guidance note) as prescribed in the circular. Further, these terms and conditions are set herewith between the client and Broker for the purpose of trading in securities on the Exchange.

The Stockbroker is providing the services and/or facilities and proposes to provide certain additional services or facilities subject to certain terms and conditions prescribed by the Stockbroker. The client will be allowed to avail the trading services and facilities offered by the Stockbroker subject to compliance with all the terms and conditions set forth facilities subject to such terms and conditions as herein and any proposed additional services or may be prescribed and notified by the Stock Broker to the Client electronically or otherwise. The Client shall be bound by any other relevant and addition of terms and conditions prescribed by the Stockbroker in relation to day trading, buy today sell tomorrow, internet-based trading, funds transfer, SMS alert facility, or any other services offered by the Stockbroker if the Client avails the trading facility

1. All trades, transactions, and contracts are subject to the Rules and Regulations of the Exchange(s).

2. The Stockbroker is entitled to demand from the Client Payment of Margin in the form of cash or securities or any other form as prescribed by Exchange from time to time, as it may deem fit. The Client hereby shall make all margin payments as demanded by the Stockbroker in time, and if the Margin payment is in the form of Cash and Securities, it should be in the proportion as defined by the Stockbroker or Exchange from time to time without prior notice thereof. In case where payment is received by way of cheque, the Stockbroker would have the discretion to execute the orders only upon the realization of the funds of the said cheque.

3. The Stockbroker is entitled to withhold transfer of shares or pay out of funds of the Client, in case the Client fails to furnish margin cheques as demanded by the Stock Broker and hold the same towards margin required. The Stock Broker may execute the any order only after the fulfillment of the margin obligations.

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For Stock Exchange

1. Stock Exchanges may confirm the details by way of sending SMS or E-mail or letter directly to the Client. Only upon receipt of confirmation from the Client, the Stock Exchanges shall commence sending the transaction details directly to Client.

2. In case of non-individual accounts the service will be available only to one mobile number as provided to Stock Exchanges as provided in the above details.

3. Client acknowledges that the service provided to him is an additional facility provided for his convenience and is susceptible to error, omission and/ or inaccuracy. In case the client observes any error in the information provided in the alert, the client shall inform the Stock Exchange immediately in writing and the Stock Exchange will make best possible efforts to rectify the error as early as possible.

4. The Client authorizes the Stock Exchange to send any message such as promotional, greeting or any other messages that the Stock Exchange may consider appropriate to the client. The Client agrees to receive above information and also gives an ongoing confirmation for use of name, email address and mobile number for marketing offers between group companies and gives the consent to receive any messages/mails.

5. The information sent as an alert on the mobile phone number / Email ID shall be deemed to have been received by the Client and the Stock Exchanges shall not be under any obligation to confirm the authenticity of the person(s) receiving the alert.

6. The Stock Exchanges will make best efforts to provide the service. The Client cannot hold the Stock Exchanges liable for non-availability of the service in any manner or for any non-delivery, delayed delivery or distortion of the alert in anyway whatsoever.

7. Stock Exchanges reserves the right to charge such fees from time to time as it deems fit for providing this service to the Client as governed by the regulatory authorities.

8. I/We agree that the member will not be responsible for non-receipt of documents sent via electronic delivery due to change in email address or for any other reason which inter alia include my/our email/inbox running out of capacity, malfunction of my/ our computer system/ server/ internet connection etc.

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BEFORE YOU BEGIN TO TRADE

1. Ensure that you deal with and through only SEBI registered intermediaries. You may check their SEBI registration certificate number from the list available on the Stock exchanges www.nseindia.com / w w w.bseindia.com and SEBI website www.sebi.gov.in.

2. Ensure that you fill the KYC form completely and strike off the blank fields in the KYC form.

3. Ensure that you have read all the mandatory documents viz. Rights and Obligations, Risk Disclosure Document, Policy and Procedure document of the stock broker.

4. Ensure to read, understand and then sign the voluntary clauses, if any, agreed between you and the stock broker. Note that the clauses as agreed between you and the stock broker cannot be changed without your consent.

5. Get a clear idea about all brokerage, commissions, fees and other charges levied by the broker on you for trading and the relevant provisions/ guidelines specified by SEBI/Stock exchanges.

6. Obtain a copy of all the documents executed by you from the stock broker free of charge.

7. In case you wish to execute Power of Attorney (POA) in favour of the Stock broker, authorizing it to operate your bank and demat account, please refer to the guidelines issued by SEBI/Exchanges in this regard.

   TRANSACTIONS AND SETTLEMENTS

8. The stock broker may issue electronic contract notes (ECN) if specifically authorized by you in writing. You should provide your email id to the stock broker for the same. Don't opt for ECN if you are not familiar with computers.

9. Don't share your internet trading account's password with anyone.

10. Don't make any payment in cash to the stock broker.

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Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) – An Investor Awareness Initiative

This is a must-read/understood and to be complied by everybody dealing/ desirous in dealing in Capital and/or Derivatives (including Currency Derivative).

1. What is money laundering?

   The goal of a large number of criminal acts is to generate a profit for the individual or group that carries out the act. Money laundering is the processing of these criminal proceeds to disguise their illegal origin. This process is of critical importance, as it enables the criminal to enjoy these profits without jeopardizing their source.

   Illegal arms sales, smuggling, and the activities of organized crime, including for example drug trafficking and prostitution rings, can generate huge amounts of proceeds. Embezzlement, insider trading, bribery, and computer fraud schemes can also produce large profits and create the incentive to “legitimize” the ill-gotten gains through money laundering.

   When a criminal activity generates substantial profits, the individual or group involved must find a way to control the funds without attracting attention to the underlying activity or the persons involved. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention.

2. What is Terrorist Financing?

   Financial Terrorism means financial support for any form of terrorism or to those who encourage, plan or engage in terrorist activities. Money launderers send illicit funds through legal channels in order to conceal their criminal origin while those who finance terrorism transfer funds that may be legal or illicit in original in such a way as to conceal their source and ultimate use, which is to support Financial Terrorism.

3. How does money laundering work?

   In the initial - or placement - stage of money laundering, the launderer introduces his illegal profits into the financial system. This might be done by breaking up large amounts of cash into less conspicuous smaller sums that are then deposited directly into a bank account, or by purchasing a series of monetary instruments (cheques, money orders, etc.) that are then collected and deposited into accounts at another location.

   After the funds have entered the financial system, the second – or layering – stage takes place. In this phase, the launderer engages in a series of conversions or movements of the funds to distance them from their source. The funds might be channelled through the purchase and sales of investment instruments, or the launderer might simply wire the funds through a series of accounts at various banks across the globe. This use of widely scattered accounts for laundering is especially prevalent in those jurisdictions that do not co-operate in anti-money laundering investigations. In some instances, the launderer might disguise the transfers as payments for goods or services, thus giving them a legitimate appearance.

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KYC document in vernacular languages
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