RISK MANAGEMENT POLICY

RISK MANAGEMENT POLICY

M/s RS Wealth Management Private Limited a Trading Member of NSE/BSE/MCX 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: Provided by the customer in the form of cash, FDR, Securities, other collaterals (accepted by the exchange for margin purpose).
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 in our margin account.
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.

Risk based approach:-
Classification of both the new and existing clients into high, medium or low risk category depending on
parameters such as the customer’s background, type of business relationship, transactions etc.
Application of each of the client’s due diligence measures on a risk sensitive basis and adoption of an
enhanced customer due diligence process for high risk categories of customers and vice-á-versa.

Limit Setting:- Limits shall be monitored on daily basis, taking following criteria’s: Turnover, Exposure, past trends, Location, Deposit/Collateral.
Margins:- Margin must be collected on all derivative trades. Client level margin will be at management discretion in cash segment. Criteria to collect margin will be on the basis of volume of client and Past history of clients. Same client should not figure in default list in more than 5 days in a month.
Trading:- Trading in illiquid scrip shall not be permitted. On detection of such trading, the risk manager shall use
his discretion to shutdown the terminal after intimating branch manager and sub broker
Pay-in of Fund & Stock:- Third party pay-in of securities & fund will not be accepted. Same way pay out of shares and fund will be directly done to client account only. No securities belonging to one client be used/transferred for Own purpose or for other client.                                                                                                                                                            Further in addition to above as per SEBI circular no. CIR/HO/MRDSD/DOP/CIR/P/2019/75 dated June 20, 2019 related to Handling of Clients’ Securities by Trading Members/Clearing Members, following important changes included w.e.f October 01, 2019:                                                                                                                                              Securities purchased by client shall be transferred to client’s demat account within one working day of the pay-out subject to clear credit balance in clients’ trading account (Capital Segment).   With regard to securities that have not been paid for in full by client (unpaid securities), full/partial securities shall be transferred to a separate client account titled as “Client Unpaid Securities Account”.   The securities kept in the “Client Unpaid Securities Account” shall  be transferred to client’s demat account upon fulfilment of funds obligation within five trading days from the pay-out date otherwise the same will be disposed off in the market by Globe. However, Globe may at its sole discretion, transfer all or part of the securities from Pool/Client Unpaid Securities Account to client’s demat account even there is a debit balance in client account subject to availability of sufficient collaterals.   If unpaid securities of the client are disposed off by Globe as  per SEBI circular, then the client  is not allowed to purchase the same securities on the same day unless the debit balance is cleared by the client.

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