FUTURES & OPTIONS OPERATIONS

 

CIRCULAR

 

Circular No.: NSE/F&O/057/2008                                                     Date:  May 09, 2008

Download No. NSE/FAOP/10680

 

 

DIRECT MARKET ACCESS FACILITY

 

In continuation to Circular nos. NSE/F&O/044/2008 dated April 03, 2008 & NSE/F&O/045/2008 dated April 04, 2008 regarding ‘Direct Market Access (DMA)’ trading facility, please note that the existing scheme applicable to CTCL / Internet Based Trading facilities has been modified in order to incorporate ‘DMA’ facility. The comprehensive ‘Scheme Governing Use of Facility Relating to CTCL / Internet Based Trading / DMA’ is as per Annexure – I.

 

The model member – client agreement for DMA facility is as per Annexure – II.

 

As informed in the above mentioned circular NSE/F&O/044/2008 dated April 03, 2008, the software and systems proposed for DMA shall be duly certified by the Exchange empanelled System Auditor before grant of permission. The structure of charges is as per Annexure – III.

 

Trading members providing ‘Direct Market Access’ facility are required to populate the following values in the field provided (15–digits) in the order structure for every order emanating from DMA terminals.


 

Digits

Value

Description

1-12 digits

222222222222

DMA order identification

13th digit

 0  OR   1

‘0’ (for Algorithmic order)

‘1’ (for non-algorithmic orders)

14-15 digits

 

00

Vendor code for In-house

 

For further clarification kindly contact Mr. Janardhan Gujaran at 022-2659 8152 / Mr. Pramod Das / Mr. Kapil Jaikalyani at 022-2659 8150.

 

 

For  National Stock Exchange of India Ltd.

 

 

Suprabhat Lala

Asst. Vice President

 


Annexure – I

 

SCHEME GOVERNING USE OF FACILITY RELATING TO CTCL / INTERNET BASED TRADING (IBT) / DIRECT MARKET ACCESS (DMA)

 

With an objective to facilitate orderly use of CTCL / Internet Based Trading / DMA facility and to make various conditions and / or requirements governing the use of CTCL / Internet Based Trading / DMA facility in a transparent manner and to have its due and strict compliance, the scheme containing various conditions and / or requirements is formulated as under:

 

For the purpose of this scheme,

‘CTCL / Internet Based Trading /’ shall mean and include use of software, which has been developed and maintained  by a member / vendor duly empanelled with the Exchange, for the purpose of using CTCL / Internet Based Trading by a member to access the trading system of the Exchange.

‘DMA facility’ shall mean a facility which allows members to provide to clients accessing the market directly and routing the orders through the trading member’s infrastructure without manual intervention by the Member.

 

1)   PRE-REQUISITES FOR OBTAINING PERMISSION FOR CTCL/IBT/ DMA FACILITY

 

1.1         In pursuance to the application made in the form as may be prescribed by the Exchange for CTCL / internet based trading / DMA facility by any member, the member shall deemed to have agreed by the provisions mentioned in the scheme hereunder, and the amendments made thereto by the Exchange from time to time.

 

1.2         A member shall produce the proof, wherever applicable, relating to approval obtained under (1.4) to the Exchange to facilitate the Exchange to extend the CTCL / Internet Based Trading / DMA facility. The member shall also ensure that the activity carried out through use of the CTCL / Internet Based Trading / DMA facility is strictly in accordance with the approved network diagram and the requirements specified by the Exchange / DOT / MTNL and / or other appropriate government / statutory authorities. 

 

1.3         A member who intends to develop and maintain software to support CTCL / Internet Based Trading / DMA facility to be approved by the Exchange shall pay one time fee  towards the receipt of the technical specifications (message formats / protocol etc.) and a recurring annual fee as may be prescribed by the Exchange from time to time.  For the purpose of calculation of recurring charges, the financial year shall be considered as the basis for the year. The recurring charges shall be apportioned on a pro-rata basis for the financial year from the day on which the application is received. 

 

1.4         A member shall, at its own expense and except VSATs, provide all lines, cabling, hardware, equipment and other communication facility required for transmission of the data between the receiving premises and the server installed at the member’s office/s and also obtain the necessary approval in writing from relevant authorities.

 

1.5         A member shall pay license fee / charges / royalty as may be levied by DOT / MTNL / Exchange / any other government / statutory authorities from time to time. 

 

1.6         A member shall ensure that the telecommunication network used by the member shall be as per the requirements specified by the Exchange / DOT / MTNL / any other government / statutory authorities from time to time. 

 

1.7         A member shall submit an acceptance certificate in the form as may be specified by the Exchange from time to time as the condition precedent  for the purpose of permitting  use of CTCL / Internet Based Trading / DMA facility by the Exchange, after completing necessary test and fully satisfying the Exchange that the CTCL / Internet Based Trading / DMA facility is fault-free. The Member shall enter into a specific agreement with the Clients whom Member permit IBT / DMA facility as per the format provided by the Exchange.

 

2)            CONTINUED PERMISSION REQUIREMENTS

 

2.1         A member shall make the CTCL / Internet Based Trading / DMA facility available to any approved person, as the case may be, only after obtaining prior written permission of the Exchange and such permission shall be subject to such conditions and / or requirements as may be stipulated by the Exchange from time to time.

 

2.2         A member shall ensure that no CTCL facility is extended to any user / person unless such user / person has passed a NCFM and / or equivalent certification program of the appropriate modules.

 

2.3         A member shall upload the details relating to the approved persons in the format prescribed by the Exchange from time to time before extending facility of use of CTCL to any approved person.  The member shall also upload details of any change in any of the details relating to use of the CTCL facility and / or the approved person.

 

2.4         A member shall ensure that directly and / or indirectly ‘no view only terminal’ and / or trading terminal is provided to any other person / office / premises / address in contravention with any of the provisions contained in the Bye-laws, Rules, Regulations, and Circulars relating to requirements concerning location of CTCL / Internet Based Trading / DMA terminals and usage thereof and also as specified by the Securities Exchange Board of India.

 

2.5         A member shall take all necessary steps to ensure that branches and / or their sub-brokers have not provided any extension of CTCL facility connected through VSAT / Leased Line with the Exchange by means of any connectivity viz. dial up / Leased Line / ISDN / Wireless media / other mode without prior uploading of the user details with location.

 

2.6         A member shall be responsible and shall take all such steps / actions and put in place requisite mechanism to ensure and keep ensuring that no approved person, in any way, is able to make the CTCL facility further available to any other person nor shall the CTCL facility is extended outside the premises for which details are uploaded to the Exchange.  In case any member fails to strictly adhere to these requirements, the Exchange may, at its discretion, take such action as it may deem fit, which may include immediate withdrawal of the CTCL facility either in part or in full, without any notice / reference to the member, and such disciplinary action against the member.

 

2.7         A member shall use the physical connection / link provided for the purpose of having simultaneous access to CTCL / Internet Based Trading / DMA facility and the NEAT trading system.

 

2.8         A member and their branches and / or their sub-brokers shall execute any of the orders received from any of their constituents only in the respective name / client code of the constituent and no order received from any of the constituents shall be executed under PRO code and / or under other client code.

 

2.9         A member shall not, under any circumstances, either through the software or otherwise, match any of the orders entered by his / its approved persons from the terminals extended by such member and that the member shall ensure to route all the orders, entered by his / its approved persons, to the trading system of the Exchange where such orders can be matched by the centralized computer trading system of the Exchange.

 

2.10        A member shall ensure to put in place a system based control on the trading limits / position limit and / or exposure taken in respect of all his / its clients and adequate system control for setting pre-defined limits on the exposure and turnover for each of the clients. The system should also be capable of assessing risk of a client as soon as any order is received by the system for processing it for execution.   Acceptance / rejection of any order shall be intimated to the respective clients within a reasonable period. Reports relating to margin requirement, payment and delivery obligations, etc. shall be informed or made available to the clients through the system. 

 

2.11       A member shall not advertise or use any software / program which may directly or indirectly facilitate matching of orders between or among two or more clients by way of grouping or otherwise. The CTCL / Internet Based Trading / DMA facility being used by a member shall have inbuilt feature of pushing in all the orders, entered by any of the approved persons only through the server of the member, which in turn will push such orders to the trading system of the Exchange for the purpose of execution.

 

2.12       A member shall not develop and / or use any software / program which shall either directly or indirectly facilitate automated trading without prior written permission of the Exchange. The term “Automated Trading” shall mean and include any software or facility by the use of which, upon the fulfillment of certain specified parameters, without the necessity of manual entry of orders, buy/sell orders are automatically generated and pushed into the trading system of the Exchange for the purpose of matching.

 

2.13       A member shall be responsible to settle all the trades executed by any approved person through the use of the CTCL / Internet Based Trading / DMA facility, whether such trades were executed with or without the knowledge of the member and that the member shall be bound to honour / comply / fulfill all the obligations / liabilities / commitments arising out of and / or in connection with the trades executed by the approved person/s as if such trades were done by the member and / or permitted by the member. 

 

2.14       A member shall maintain all systems logs and make the same available for inspection at the discretion of, and demand by, the Exchange / SEBI at any time.

 

2.15       A member shall ensure to undertake periodic audit of their CTCL / Internet based trading / DMA facility at such time intervals and from such qualified persons as may be directed by the Exchange from time to time and submit a certificate duly issued by such qualified person to the Exchange within the time as may be stipulated by the Exchange.

 

2.16       A member shall ensure to carry out necessary changes in the CTCL / Internet Based Trading / DMA facility used for accessing the trading system of the Exchange, within such time as may be intimated by the Exchange, from time to time.  No modification of any part of the software has been / will be effected without prior written permission of the Exchange.

 

2.17       A member shall not develop / use any software for accessing the trading system of the Exchange, whether through the CTCL / Internet Based Trading / DMA facility  or otherwise, which software, in the opinion of the Exchange, may resemble and / or result and / or may give appearance of NEAT software in any manner.

 

2.18       A member shall not assign and / or otherwise transfer any one or more rights and / or obligations relating to the use of the CTCL / Internet Based Trading / DMA facility, without prior written permission of the Exchange.

 

2.19       A member shall not use, without prior written permission of the Exchange, the name of the Exchange to directly and / or indirectly promote his / it’s business. 

 

2.20       A member shall ensure that the CTCL / Internet Based Trading / DMA facility is flexible for effecting any changes at a short notice and has inbuilt functionalities / features in respect of online surveillance, trade by trade position monitoring and other risk management aspects.

 

2.21       A member shall treat, as confidential, all information obtained from the Exchange pursuant to this scheme and shall not divulge such information to any person (except employees of the member who need to know such information) without prior written permission from the Exchange and that the member shall ensure that all his / its employees are aware by and strictly comply with this requirement without exception. It is clearly understood that the forgoing obligation as to confidentially shall survive any termination of the availability of use of the CTCL / Internet Based Trading / DMA facility envisaged under this scheme.  

 

2.22       A member shall not, either by himself / itself and / or through any person acting on his / its behalf issue / release / publish any advertisement, brochure / pamphlet / booklet, notice or any other promotional material on any aspect relating to the use of the CTCL / Internet Based Trading / DMA facility, in any form, whether written or otherwise, except in accordance with the code of advertisement as may be prescribed by the Exchange from time to time and after prior written permission of the Exchange.

 

2.23       Any declaration and / or notice required to be given by any member to the Exchange shall be sent by registered letter or facsimile transmission or at e-mail address specifically provided by the Exchange for this purpose.

 

2.24       Besides the conditions and / or requirements as may be stipulated under clause (2.1) by the Exchange, all the provisions contained in the Bye-laws, Rules, Regulations and  Circulars relating to use and operation of the NEAT trading system shall mutatis mutandis be applicable to the use and operation of the CTCL / Internet Based Trading / DMA  facility.

 

2.25       A member shall ensure that the guidelines issued by SEBI in relation to internet based securities trading and services are strictly adhered to, more particularly relating to 

2.25.1       Any system used by a member shall have necessary provision for security, reliability and confidentiality of data through the use of suitable encryption technology;

2.25.2       Maintaining adequate backup systems and data storage capacity by a member besides putting in place alternative means of communication in case of failure in internet connectivity / link;

2.25.3       Sending order / trade confirmation to the investor through email at client’s discretion at the time period specified by the clients in addition to the other mode of display of such confirmation on real time basis on the website of the member.  The investor shall be allowed to specify the time interval on the website within which the investor would like to receive the confirmation through email. Facility of reconfirmation of orders which are larger than that specified by the member’s risk management system shall be provided on the internet based system.

 

2.26       A member shall ensure that the guidelines issued by SEBI and Exchange in relation to DMA facility are strictly adhered to, more particularly relating to:

2.26.1       Adequate provisions for maintaining backup systems and data storage capacity

2.26.2       System provides for appropriate validations for quantity limits, price range checks, order value and credit checks before the orders are released to the Exchange

2.26.3       System provides for Net position that can be outstanding so as to fully cover the risk emanating from the trades with the available margins of the specific client

2.26.4       System provides for appropriate limits for securities which are subject to FII limits as specified by RBI

2.26.5       System provides DMA facility to clients only to execute his own trades and shall not use it for transactions on behalf of any other person (s) / entity and / or any other purposes.

2.26.6       Member shall specifically authorize clients for providing DMA facility after fulfilling Know Your Client requirements and carrying out due diligence regarding client’s credit worthiness, risk taking ability, track record of compliance and financial soundness. Member shall ensure that only those clients who are deemed fit and proper for DMA facility are allowed access to the DMA facility. Member shall maintain proper records of such due diligence. Individual users at the client end shall also be authorsied by the Member based on minimum criteria. The records of user details, user ID and such authorization shall be maintained by the Member. Details of all user IDs activated shall be provided by the Member to the Exchange.

2.26.7       The Member shall ensure sound audit trail for all DMA orders and trades, and be able to provide identification of actual user-id for all such orders and trades. The audit trail data should available for at least 5 years.

2.26.8       Member shall also ensure that in case of DMA limits are set based on risk assessment, credit quality and available margin of the client and member shall have appropriate authority levels to ensure that the limits can be set up only by persons authorised by risk/compliance manager.

2.26.9      The DMA facility provided by the Member shall have sufficient features including password protection for the user ID, automatic expiry of passwords at the end of a reasonable duration.

2.26.10    Members using DMA facility for routing approved persons orders shall not be allowed to cross trades of their approved persons with each other. All orders must be offered to the market for matching.

 

2.27       A member shall ensure that the following security measures are inbuilt in the CTCL / Internet Based Trading / DMA system as the case may be :

2.27.1    User Id.

2.27.2    First level password (Private code).

2.27.3    Automatic expiry of passwords at the end of reasonable duration.  Reinitialise access on entering fresh password.

2.27.4    All transaction logs with proper audit facilities to be maintained in the system with unique numbering for orders and trades.

2.27.5    Secured Socket Level Security for server access through internet.

2.27.6    Suitable Firewalls between trading set-up directly connected to an Exchange trading system and the member’s trading set up.

2.27.7    Integrating any advanced level security as specified by NSE / SEBI from time to time.

2.27.8    Adherence to the following systems operations procedure :

2.27.8.1      Follow identical logic / priorities used by the Exchange to treat client orders.

2.27.8.2      Maintain all activities / alerts log with audit trail facility.

2.28       The member shall follow and comply with such orders or instructions including any such order or instruction, as may be issued by the Exchange or any committee of the Exchange duly constituted for the purpose, in the event of the member committing any violation of any Rules, Bye Laws, Regulation, CTCL / Internet Based Trading / DMA scheme or practice or code of conduct prescribed by the Exchange in respect of the conduct of the business in the Exchange and those maybe in force from time to time.

 

3)           RIGHTS OF THE EXCHANGE

3.1         The Exchange may, at its discretion, provide access to  the CTCL / Internet Based Trading / DMA facility provided by the Member  from any location, as may be notified by the Exchange from time to time (hereinafter referred to as the “receiving premises”), to a member, and the member shall be responsible and required to establish connectivity with such receiving premises at his cost.

 

3.2         The Exchange may, at its discretion, make the CTCL / Internet Based Trading / DMA facility available to the member upto such time as the Exchange may deem fit and that the CTCL / Internet Based Trading / DMA facility may, at any time, be withdrawn, at its discretion by the Exchange, without giving any notice / reference to the member and / or reasons whatsoever.

 

3.3         The Exchange shall, at its discretion, have an absolute right to inspect the software used by any member either in his / its own office and / or extended such facility at any other location, at any time and without prior notice.

 

3.4         A member shall render and / or shall cause to  render all possible assistance and cooperation to the official of the Exchange by providing access to any kind of information in any form as such official may require at any location whether details of such location are uploaded or not, and shall produce such documents, records, accounts, books, data etc, howsoever stored, including data stored in magnetic tapes, floppy diskettes etc., and provide any other information as may be required by the Exchange.

 

3.5         Without prejudice to any other right under any law for the time being in force or which may become applicable at any time, the Exchange shall have the exclusive right to take, at its discretion, such actions, steps, measures, proceedings, decisions within such period of time and upon such conditions and / or requirements as the Exchange may deem fit upon any member non-complying and / or delaying  in compliance and / or failing to comply with any of the conditions and / or requirements contained in this scheme and / or amendments thereto or upon suspension or termination of any member on any account whatsoever. It is understood that such actions, steps, proceedings, decisions may interalia include immediate withdrawal of use of CTCL / Internet Based Trading / DMA facility accessing the trading system of the Exchange, without notice / reference to the member and / or such disciplinary action as the Exchange may deem fit and that the member shall abide by and be bound by such actions, steps, measures, proceedings, decisions as may be initiated by the Exchange from time to time.

 

3.6         No forbearance, delay or indulgence by the Exchange in enforcing any of the conditions and / or requirements contained in this scheme and / or amendments thereto and / or under the Bye-laws, Rules, Regulations and Circulars, shall prejudice and / or restrict the rights of the Exchange nor shall any waiver of the right of the Exchange operate as a waiver of any subsequent breach. No right, power or remedy herein conferred upon or reserved for the Exchange is exclusive of any other right, power or remedy available to the Exchange and that each such right, power or remedy shall be cumulative.

 

3.7         The Exchange has and shall have an absolute right to add, modify, amend and / or delete any of the conditions and / or requirements contained in this scheme and such additions, modifications, amendments and / or deletions shall be applicable and come into force as may be notified by the Exchange from time to time and that every member and / or every approved person associated with the member shall abide and / or be bound by such additions, modifications, amendments and / or deletions as if such additions, modifications, amendments and / or deletions are part of this scheme.

 

4.       GENERAL

4.1         Non-Exclusivity

The CTCL / Internet Based Trading / DMA facility made available to any member by the Exchange shall be on a non-exclusive basis and shall be available only at the discretion of the Exchange.

 

4.2         Notice of withdrawal by member

4.2.1     A member may be entitled, by giving one month’s written notice, to request the Exchange to withdraw the CTCL / Internet Based Trading / DMA facility.  Such withdrawal shall be subject to such conditions and / or requirements as may be stipulated by the Exchange, including payment of such amount to and / or by the Exchange, as may be decided by the Exchange at its discretion.

4.2.2     A member is aware that the Exchange is the absolute owner of the proprietary rights in respect of the APIs entrusted to the member for the purpose of developing the software and that he shall not duplicate, sell, assign, license or part in any other mode and / or method for consideration or otherwise and / or transfer the APIs to any third party any time.

4.2.3     A member is aware that in case the Exchange rejects the application for developing software for availing the CTCL / Internet Based Trading / DMA facility or the member withdraws the application for developing the software, the member shall return immediately, without any demur, the APIs to the Exchange.

4.2.4     The member shall forthwith inform the Exchange in writing as and when any notice is received by the member in connection with any institution of winding up proceedings against the member and that the member shall inform the Exchange in writing before the member initiates any winding up proceedings to be wound up. The member further undertakes, that it shall inform the Exchange in writing on the onset of any circumstance which is likely to or may render the member to be wound up or which is likely to or may render the member liable to be subject to winding up proceedings.

 

4.3         Indemnifying the Exchange

A member shall be deemed to have indemnified and keep indemnified the Exchange harmless against every and all claims, demand, damages, liabilities, losses and / or expenses suffered by such member directly by reason of the use and / or non-use of the CTCL / Internet Based Trading / DMA facility by any member / approved person and / or by reason of any member / approved person not complying with and / or delaying in compliance with and / or failure in compliance with and / or contravening with any of the conditions and / or requirements contained in this scheme and / or amendments thereto, including in relation to the proprietary rights of API vested in the Exchange. The Member shall be fully responsible and liable for all the orders emanating through their DMA system.

 

4.4    No warranty by the Exchange

A member agrees and is fully aware that the Exchange does not, in any manner, warrant that the use of the CTCL / Internet Based Trading / DMA facility, accessing the trading system of the Exchange, will be error-free and / or uninterrupted.

 

4.5         No liability to the Exchange

The Exchange shall not, in any way, be responsible for development, maintenance, updates, upgrades, error fixes or any other support to the software being used for CTCL / Internet Based Trading / DMA facility by any member and shall not be liable for any loss suffered by any member due to the use of software for extending the CTCL / Internet Based Trading / DMA facility.

 

Also, the Exchange shall, in no way, be liable for any direct and / or indirect damage, costs, claims and / or expenses whatsoever, in connection with

 

4.5.1     Mechanical or electrical or telephone or network breakdown or power failure or malfunction of any of the servers or auxiliary equipment used by a member and / or any other cause beyond the reasonable control of the Exchange.

4.5.2     Special direct / indirect economic or consequential loss or damage including, but not limited to loss of profit, business revenue, opportunity costs, goodwill or anticipated saving.

4.5.3     Any event of a force majeure.

For the purpose of this clause, “Force Majeure” means and includes wars, insurrections, revolution, fires, floods, epidemic quarantine restrictions, declared general strikes in relevant industries, Act of God, Act of the Government of India and / or any concerned State Government and any such other acts or events beyond the control of the Exchange.  Further, this will not be prejudicial to the rights already accrued to the Exchange due to failure by any member to perform either in full or in part any of the obligations  prior to the occurrence of the event of Force Majeure.

 

4.6         No guarantee

It is clearly understood that neither the Exchange nor the directors, managers, officers, employees or agents of the Exchange guarantee the functioning of the CTCL / Internet Based Trading / DMA facility nor uninterrupted connectivity to the trading system of the Exchange. The Exchange and the directors, managers, officers, employees and agents of the Exchange shall not be, in any way, liable to any member and / or his / its approved person or to any other person for any problem in performance or interruption of CTCL / Internet Based Trading / DMA facility or for any damages, consequential or otherwise, arising therefrom or occasioned thereby.  No proceedings shall be issued by any member / approved person / third party against the Exchange or against any of the directors, managers, officers or employees of the Exchange for any act of commission or omission done in discharge of official functions.

 

4.7         Applicability of this  scheme

                   This scheme shall be applicable not only to the information services and terminal equipment already offered by any member to any approved person but shall also be applicable to any information services and terminal equipment that may be developed by any member in future, even if any member has either altered and / or intends to alter mode of supplying information to any approved person, except where the member has obtained permission, in writing, for such alteration with complete details, from the Exchange.

 

Annexure – II

 

MODEL DMA MEMBER-CLIENT AGREEMENT

 

This agreement is made at ___________ this ______ day of  __________ between _________ (member of  National Stock Exchange of India Ltd. with SEBI Registration No.:________),  having his /her / its office /  registered office at _________, hereinafter referred to as “MEMBER” (which expression shall, unless  repugnant to the context or meaning thereof, be deemed to mean and include his/her heirs, executors and  administrators / the partners of the said firm for the time being, the survivor or survivors of them and the  heirs, executors and administrators of such last survivor / its successors and legal representatives, as the case may be) of the One Part.

 

And

 

Mr./Ms./M/s. ______________________, an individual / a proprietary concern / a partnership firm / a body corporate, registered / incorporated under the provisions of the Indian Partnership Act, 1932 / Companies Act, 1956, having his /her / its  Permanent Account Number _____ (“PAN”)  and his / her / its residence / registered office at ___________________, hereinafter referred to as “CLIENT” (which expression shall, unless repugnant to the context or meaning thereof, be deemed to mean and include his /her heirs, executors and  administrators /the partners for the time being of the said firm, the survivor or survivors of them and the heirs, executors and administrators  of such last survivor / its successors and legal representatives, as the case may be) of the Other Part.

 

WITNESSTH:

 

Whereas, MEMBER is permitted by the National Stock Exchange of India Limited (hereinafter called as “NSEIL”) to provide  Direct Market Access (hereinafter referred to as the “DMA facility”) to its CLIENT to access the trading system of MEMBER.

 

Whereas the CLIENT is desirous of availing the DMA facility for the purpose of accessing the NSEIL trading system through the Member’s infrastructure.

 

Whereas the CLIENT has satisfied itself of the capability of the MEMBER offering DMA facility and wishes to execute his orders through him and the CLIENT shall continue to satisfy itself of such capability of the MEMBER before executing orders through him.

 

Whereas the MEMBER has satisfied and shall continuously satisfy himself about the genuineness and financial soundness of the CLIENT and investment objectives relevant to the services to be provided as specified by NSEIL or other relevant authority from time to time.

 

Whereas the MEMBER has taken steps and shall take steps to make the CLIENT aware of the precise nature of the MEMBER's liability for business to be conducted, including any limitations on that liability and the capacity in which it acts.

 

In consideration of the mutual understanding as set forth in this agreement, the parties thereto have agreed to the following terms and conditions:

 

1.            The CLIENT agrees that the trading facility under Direct Market Access (DMA) is used only to execute own trades and shall not use it for transactions on behalf of any other person/entity and/or for any other purpose/s.

 

2.            The CLIENT shall not provide, directly or indirectly, the facility or any portion of the facility to any third party.

 

3.            The CLIENT shall supply all information which MEMBER may reasonably request in writing concerning CLIENT and use of the Services including Know Your Client requirements.  MEMBER may report this information to the NSEIL wherever the same is sought by the NSEIL.

 

4.            The MEMBER shall authorize individual users at the CLIENT end.

 

5.            The CLIENT shall ensure that only persons Authorised by CLIENT access and use the systems and all orders are authorised by the CLIENT.

 

6.            The CLIENT shall access each DMA facility only through the use of password specified by MEMBER. The CLIENT is solely responsible for ensuring that the passwords are known to and used only by those users authorized by CLIENT(‘Authorised Users’).  Unless the CLIENT has received the Member’s approval, any use of the DMA facility by Authorized Users who are located outside of the jurisdiction of country of domicile of the CLIENT is strictly prohibited.

 

7.            The CLIENT agrees to be bound by the various risk management requirements that the MEMBER shall impose for the usage of DMA facility.

 

8.            The CLIENT agrees that the MEMBER has right to withdraw the DMA facility -

 

i)             in case of any breach of the limits imposed by the MEMBER or any regulatory authority.

ii)            on account of any misuse or on instructions from SEBI/NSEIL.

 

9.            The CLIENT shall be solely responsible for all acts or omissions of any person using a DMA facility provided by MEMBER and bound by the terms of all transactions executed through DMA facility.  All transactions /messages generated by use of DMA facility  shall be deemed to be authorized by CLIENT.

 

10.         The CLIENT shall notify MEMBER in the event of DMA facility being compromised. Upon receipt of this notice, Client’s DMA facility shall be promptly cancelled but CLIENT shall be responsible for any actions taken through the use of such DMA facility before they are cancelled. 

 

11.         The provisions of this agreement shall always be subject to the Byelaws, Rules, Regulations and Circulars issued by NSEIL from time to time and the rules, regulations and guidelines issued by SEBI /applicable regulatory bodies that may be in force from time to time.

 

12.         The agreement entered into between the MEMBER and the CLIENT shall stand terminated by mutual consent of the parties by giving at least one month written notice. Such cancellation or termination shall not have any effect on transaction executed before the date of such notice of termination and the parties shall enjoy the same rights and shall have same obligations in respect of such transactions.

 

13.         The instructions issued by an authorized representative of the CLIENT shall be binding on the CLIENT in accordance with the letter authorizing the said representative to deal on behalf of the CLIENT.

 

14.         In the event of death or insolvency of the CLIENT or his otherwise becoming incapable of honoring obligation, MEMBER may close out the transaction of the CLIENT and the CLIENT or his legal representative shall be liable for any losses, costs and be entitled to any surplus which may result there from.

 

15.         Regardless of any other provision of the Agreement, MEMBER have the right to terminate (temporarily or permanently and at any time, with or without cause or prior notice) all or any part of any facility, or access to any facility, or to change the nature, composition or availability of any facility.

 

16.         The CLIENT    is aware that authentication technologies and strict security measures are required for routing orders through DMA facility and undertakes to ensure that the password of the CLIENT and/or his authorized representative are not revealed to any third party.

 

17.         The CLIENT agrees that the MEMBER shall not be liable or responsible for non-execution of the orders of the CLIENT due to any link/system failure at the CLIENT/ MEMBER/ NSEIL end. MEMBER shall make no warranty, express or implied, to CLIENT concerning the DMA facility. CLIENT expressly acknowledges and agrees that the DMA facility provided by MEMBER is on an “as is” basis, at CLIENT’s sole risk.

 

18.         CLIENT shall undertakes not to use or allow the use of DMA  facility to engage in any form of market misconduct including insider trading and market manipulation or conduct that is otherwise in breach of applicable laws, including the applicable rules and regulations of the relevant authority.

 

19.         CLIENT shall undertake to ensure no person authorized to place orders via DMA facility has been involved in any action by any of the regulatory authorities and convicted in any jurisdiction of any offence in relation to securities or fraud.

 

20.         This agreement shall not be altered, amended and /or modified by the parties in a manner that shall be in contravention of any other provisions of this agreement.

 

21.         The MEMBER and the CLIENT are aware of the provisions of Bye-Laws, Rules and Regulations of NSEIL relating to resolution of disputes/differences through the mechanism of arbitration provided by the NSEIL and agree to abide by the said provisions.

 

22.         All trades, transactions and contracts are subject to the Bye-Laws, Rules and Regulations of the NSEIL and shall be deemed to be and shall take effect as wholly made, entered into and to be performed in the city of Mumbai and the parties to such trade shall be deemed to have submitted to the jurisdiction of the Courts in Mumbai for the purpose of giving effect to the provisions of the Byelaws, Rules and Regulations of the NSEIL.

 

IN WITNESS THEREOF, the parties to agreement have caused these presents to be executed as of the day and year first above written.

 

 

The Client’s Signature /                           The Member’s Signature /

Authorized Signatory                              Authorized Signatory

 

Signed by:                                           Signed by:

 

Title:                                                   Title:

 

Name of the CLIENT:                             Name of the MEMBER:

 

Witness:                                              Witness:

 

1.                                                       1.

 

2.                                                       2.

 

 

Annexure – III

 

Structure of Charges

 

 

Members already having procured APIs from the Exchange for their current in-house NNF setup and are being charged annually

API Charges for Members NOT having procured APIs from Exchange

One Time Charge

Rs. 1,50,000/-

Annual Charges

Rs.    50,000/-

Application processing charges for DMA facility

Rs. 100,000/- * ( for each set up separately)

Rs. 100,000/- * ( for each set up separately)

 

* Charges will be directly debited from ‘Exchange Dues Account’ of the member.