Policies & Procedures Of Pentad Securities Private Limited
1. Refusal Of Order(S) From The Clients Including For Penny Stocks & Illiquid Commodities:
Pentad Securities Private Limited (“PSP”) offers trading in most of the liquid stocks/commodities traded on the stock exchanges. Some of the stocks, such as penny stocks, i.e., stocks whose market price is less than their face value, scrips traded in physical mode, or scrips that do not meet PSPL’s internal criteria may not be allowed by PSPL for trading. "Penny Stocks'' also include scrips with wide bid-ask spreads and low market capitalization due to poor fundamentals, "T," "TS," "Z," and "BE" category stocks or stocks with a high risk of manipulation or that follow regulatory directions or guidelines.
Further, PSPL may also, at any time, at its sole discretion, as a risk containment or surveillance measure and without prior notice to the client, restrict the client’s ability to trade in any specific security/commodity through PSPL. Such restrictions could apply only to purchasing or selling, or both.
It is also provided further that PSPL may ask for compulsory settlement/advance payment of expected settlement value/delivery of commodities for settlement prior to acceptance / placement of order(s) as well. Losses, if any, on account of such refusal by PSPL or due to delay caused by such limits, shall be borne exclusively by the client alone. PSPL shall not be responsible for any financial or other implications due to the execution, delay in execution, or non-execution of any such orders.
2. Client’s Exposure Limits: (Minor changes in punctuations have been included)
PSPL from time to time may impose quantity and/or value limits on the orders that a client can place through its system (including exposure limits, turnover limits, and limits as to the number, value, and/or kind of securities commodities in respect of which orders can be placed, etc.). PSPL may need to vary or reduce the limits or impose new limits urgently on the basis of risk perception and other factors considered relevant, including but not limited to restrictions on limits on account of exchange or SEBI directions or limits (such as broker-level or market-level limits, security-specific or volume-specific exposures, etc.). PSPL may be unable to inform the client of such a variation, reduction, or imposition in advance. PSPL shall not be responsible for the consequences of such variation, reduction, or imposition, or the client’s inability to route any order through PSPL on account of any such variation, reduction, or imposition of limits. Such exposure limits may be set up to a predetermined number of times (the "Multiple"), and the quantum of the Multiple shall be decided at the sole option or discretion of PSPL. Such multiples may be changed at the discretion of PSPL from client to client depending on various factors, which inter alia include factors like market conditions, client profile, financial status, regulatory interventions, etc. The client shall abide by the exposure limits, if any, set by PSPL or by the exchanges, the Clearing Corporation, or SEBI from time to time. The exposure limits set by PSPL do not create any rights in favour of the client and are liable to be withdrawn at any time without notice, and the client shall bear the loss on account of the withdrawal of such limits. PSPL 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 or commodities through PSPL, or it may subject any order placed by the client to a review before its entry into the trading systems and may refuse to execute or allow execution of orders due to various factors, including but not limited to the reason of a lack of margin or securities or commodities, the order being outside the limits set by PSPL, the exchange, or SEBI, or being under alert due to surveillance or RMS, and/or any other reasons which PSPL may deem appropriate in the circumstances. Limits/exposure provided shall vary based on the intraday profit/loss made by the client. Exposure limits against collateral and stocks shall be given only against approved securities as decided by the Exchanges/PSPL from time to time and subject to such haircuts and valuations as may be decided by PSPL from time to time. PSPL from time to time may change the applicable haircut or apply a haircut higher than that specified by the exchanges. In the case of derivatives, clients shall be allowed to trade only up to the applicable client-wise position limits set by the exchanges and regulators from time to time, along with the added margin levied in addition to exchange margins. PSPL shall have the prerogative to allow differential buy and sell limits for its clients depending upon the credit worthiness, integrity, and past conduct of each client.
3. Brokerage Rate:
The slab rate of a brokerage shall be changed as per specified in AOF but may be reviewed by PSPL from time to time and changed in such a manner as PSPL may deem fit, provided that the same would not contradict the regulatory provisions.
4. Imposition Of Penalty / Delayed Payment/other Charges:
The client shall pay PSPL settlement dues, brokerage, statutory levies, taxes, etc. as applicable from time to time. If the client fails to make payment of any amount due within the time frame specified by PSPL, it shall be entitled to levy such charges by way of penalty or delayed payment charges not exceeding 24 percent per annum (or other rates as may be decided from time to time by PSPL) on the amount due as PSPL may deem fit. This levy is only a penal measure in case the client defaults in meeting settlement and margin obligations and should not be construed as a funding arrangement by the client; further, the client cannot demand the continuation of service on a permanent basis by citing this levy of delayed payment charges. Further, where PSPL has to pay any fine or bear any punishment from any authority in connection with, as a consequence of, or in relation to any of the orders, trades, deals, or actions of the client, the same shall be recovered from the client. PSPL shall not be liable to make payment of any interest or delayed payment charges on the credit balance, if any, lying in the client’s ledger, margin account, deposit, etc. with PSPL.
5. The Right To Sell Clients’ Securities/commodities Or Close Clients’ Positions, Without Giving Notice To The Client, On Account Of Non-payment Of Client’s Dues:
PSPL shall have the right to square off the position of the client (including the right to refer the matter to arbitration) with no obligation of communicating the same to the Client, for non-payment of margins or other amounts, including the pay in obligations, outstanding debts, and/or there is delay /failure of the client to bring additional margins to cover the increase in risk in dynamic and volatile market conditions, etc. and adjust the proceeds of such liquidation/closeout, if any, against the client’s liabilities/obligations. PSPL reserves the right to decide the Position closing keeping because of the size of the order, the depth of the market and various internal parameters as decided by PSPL from time to time. The following circumstances may trigger the square off/close out under various measures:
- If the client does not square off his open intraday positions before the specified time [currently 3.15 pm. for the equities market and (currently 11.15 pm / 11.40 pm- both normal and US daylight saving time for the commodities market, whichever is applicable) or the client does not convert the open intraday positions to delivery/carry forward, PSPL shall attempt to square off/close out the open positions on the same day before the closure of the market.
- In case wherein mark-to-market losses have reached the stipulated percentage and the client has not any immediate steps to replenish the margin or reduce mark-to-market losses.
- Cases wherein the market or securities placed by the client fall short of requirements or the limits given to the client have been breached.
- A client has defaulted on his existing obligation/failed to make payment or delivery of securities or commodities.
Further, whenever any price of stock or underlying contract breaches the internally prescribed percentage change, PSPL may, at its discretion, square off the existing open positions in the Intraday Margin Segment(s) without giving any prior notice to the customers. However, PSPL does not guarantee the square-off of open positions.
However, in the case of Intraday Derivative positions, PSPL shall attempt to square off/close the open positions on the same day or in case of any difficulties/issues, on the next trading day. PSPL does not guarantee square off of such open positions. Clients are solely responsible for profit/losses arising out of such positions. The Client accepts to comply with PSPL’s requirement of payment of Margin/settlement obligations of the Client, immediately failing which PSPL may sell, dispose of, transfer or deal in any other manner the securities/commodities already placed with it as Margin/lying in the beneficiary account of PSPL and/ or cancel pending orders and/ or square-off all or some of the outstanding margin/ F&O positions of the Client as it deems fit at its sole discretion without further reference to the Client and any resultant or associated losses that may occur due to such square -off/sale shall be borne by the Client.
PSPL shall be fully indemnified and held harmless by the Client on this behalf at all times. In the exercise of PSPL’s right to sell securities/commodities, the choice of specific securities/commodities to be sold and/or orders to be cancelled shall be solely at PSPL’s discretion. Where the margin/security is made available by way of securities/commodities, or any other property, PSPL shall have the discretion to decline its acceptance as a margin/security/commodity and/or to accept it at such a reduced value as PSPL may deem fit by applying haircuts or by valuing it by marking it to market or by any other method as PSPL may deem fit in its absolute discretion. The resultant or associated losses that may occur due to such squaring-off or sale of such securities/commodities shall be borne by the client.
The MTM losses and margin requirement displayed on these web pages will be considered as demand for the additional margin required by PSPL. PSPL may not inform each and every client (one on one), regarding the margin requirements/ additional margin top up calls/margin availability before squaring off the open positions. Clients are responsible/bound to monitor and review their open positions and margin requirements all the time and furnish the additional margin to PSPL before the positions are squared off by PSPL. PSPL reserves the right to set a threshold for liquidation of client securities/commodities, available securities/commodities and collateral being sealed. Where there is breach in shares/ underlying scrips, specific market wide position limit (MWPL) as specified by Exchanges, client will not be permitted to take fresh positions in that share/ underlying but he can square off his existing open positions. In case any of the position limits (client level, Trading Member level, market level) are breached, PSPL may initiate square off. Products specific terms, if any, shall be displayed on the website.
6. Shortages In Obligations Arising Out Of Internal Netting Of Trades:
The treatment of shortages shall be as below: a) Short Delivery to the Exchange for scrip at the broker level: In case of short delivery to the exchange, the settlement happens as per the auction/close-out mechanism of Exchange and auction/close-out debit received shall be passed to the defaulting client who did not fulfil his selling obligation. b) Short delivery of pay-out to internal clients who bought the scrip on that day due to internal shortage (Client to Client shortage): All positions will be closed out at the valuation rate defined by PSPL. The defaulting client on the sell side will be charged the amount equivalent to the quantity short delivered multiplied by the valuation price. The client on the buy side will be credited by the same amount debited to the defaulting client on sell date as computed above. All losses to the client on account of the above shall be borne solely by the client, and PSPL shall not be responsible for the same. In case of any claim against PSPL, the Client shall indemnify PSPL in this regard. Valuation- Highest price from trading to settlement day (i.e. on T, T+1, T+2 days) or 120% of the trading day’s closing price.
7. Conditions Under Which Client Is Not Allowed To Take Further Positions Or Broker May Close The Existing Positions Of The Client:
PSPL has margin based Risk Management System (RMS) policy. Clients may take exposure up to the amount of margin available with PSPL. The client may not be allowed to take positions in cases of non-availability/ shortage of margin as per the RMS policy of the Company, securities breaching the limits specified by the Exchanges/regulators from time to time, regulatory restrictions/directives, and other conditions as may be specified by PSPL from time to time in view of market conditions, etc. The existing positions of the client are also liable to square off/close out without giving notice due to shortage of margin/nonmaking of payment for their pay in obligation/outstanding debts etc. Client has to meet his pay-in obligations in cash by the scheduled date of pay-in for purchases done in the Commodity segment. In the event of liquidation/square off of the open positions, the client shall be liable to pay for any resultant losses and all associated costs incurred by PSPL. PSPL, at any point in time and at its sole discretion and without prior notice to the client may prohibit or restrict client’s access to trade in all securities/commodities or in any specific security/commodity either buy or sell or both. In case of securities/commodities underlying in the ban period, PSPL may not accept further orders in contracts for such securities/commodities underlying.
The following few situations may be a precondition for limit for taking further position or square off: a) Technical failure. b) Securities/commodities breaching any limits specified by the Exchanges/regulators/Pentad from time to time. c) The client is dealing in illiquid contracts. d) Cheque submitted by the client has bounced or clear funds not received with the Broker for the cheque submitted by the client. e) If in the opinion of PSPL, the client has committed a fraud, crime, or acted in contravention to the agreement. f) Non-payment of mark-to-market loss in cash. g) Open positions in a contract exceed or are close to market wide cut-off limits. h) The client’s position is close to client-wise permissible “open” positions. i) Intraday orders after the cut-off time would not be allowed. j) Wherein risk perception shows that it is the interest of client/market, securities/commodities submitted in physical form for settlement of the legal dispute with members. k) Disciplinary action by Government of India, Government agencies, regulatory bodies, regulatory restrictions/directives etc. l) Violation of the terms and conditions of KYC. m) Liquidation of client’s positions, available securities/commodities. n) Such Shortfall/breach of threshold limits as per Risk Policy prevalent from time to time. o) Any suspicious trading patterns observed by Risk/ Surveillance Dept. p) Other conditions as specified by Pentad from time to time.
8.A - TEMPORARILY SUSPENDING OR CLOSING OF CLIENT'S ACCOUNT AT THE CLIENT'S REQUEST:
Not Contrary to any point in KYC, the client may request PSPL by giving 7 days prior notice in writing, to suspend his account temporarily for any reason, not limited to the gravity of the grievances raised against the client. Trade in a suspended account shall not be permitted; however, the settlement will be active. The account can be reactivated on the submission of the written request of the client subject to the account being settled and there are no dues receivable with the complete discretion of PSPL. PSPL may suspend/close the client account if PSPL observes any abnormal or suspicious activity in the client account through its monitoring and surveillance of the client account or in case of default. PSPL may also, at any time, suspend or close the client account due to any action from SEBI (e.g. SEBI orders) or Exchanges/ Circulars or other regulatory/judicial orders, etc. Further, PSPL may also temporarily suspend/close the client account if there is no activity in the client account for 12 months, as deemed fit by PSPL and/ or as prescribed by SEBI/Exchanges from time to time. All losses to the client on account of the above shall be borne solely by the client, and PSPL shall not be responsible for the same. In case of any claim against PSPL, the client shall indemnify PSPL in this regard.
8.B - FACILITY OF VOLUNTARY FREEZING / BLOCKING THE ONLINE ACCESS OF THE TRADING ACCOUNT
Accordingly to the NSE Circular : NSE/INSP/61529 DATED 8th April 2024, facility of voluntary freezing /blocking the online access of the trading account has been facilitated to the clients by dropping email to stoptrade@pentad.in or mobile : +918080626415
9. DEREGISTRATION OF A CLIENT:
Not contrary to any point in KYC, PSPL shall also be entitled to deregister/terminate the client with/without mutual consent by giving notice as per mandatory policies. Pentad may, at any point in time, at its sole discretion and without prior notice, prohibit/restrict/block the client’s access to the website or related services including offline trading rights, due to regulatory requirements, PMLA regulations, market conditions, and other internal policies, Further PSPL may freeze client account in following scenario: 1. If the client breaches any terms, conditions or covenants of the Standard Set of documents; 2. Upon the death, winding up, bankruptcy, liquidation, or being designated as a defaulter by any credit rating agency or if there is any legal /regulatory proceeding against the client under any law in force; 3. The client has misrepresented facts at the time of giving instructions or otherwise; 4. Any proceedings or investigations that involve the client or his/her properties have been initiated or are ongoing; 5. The client has violated the applicable law, particularly the securities & commodities law and Bye-laws, Rules and Regulations of SEBI/ respective Stock Exchanges on which the client trades; 6. The client account figures in the list of debarred entities published by SEBI; 7. If the actions of the client are prima facie illegal/improper or such as to manipulate the price of any securities/commodities or disturb the normal/proper trading in securities/commodities or disturb the normal/proper functioning of the market, either alone or in conjunction with others; 8.On receipt of the order from the Regulatory authorities/SEBI/Police Authorities/Court/Others; 9. Where the client has not cleared debits in his/her account in prescribed time, 10. Irregular trading patterns from a surveillance /Money Laundering perspective 11. Where the client is categorized as ineligible due to being non- traceable, pending disputes, and any other circumstances leading to raising non confidence in client including return of undelivered couriers citing reason of no such person / addressee left /refusal to accept mails/ PODs signed by the third persons or Digital Contract Notes (DCN) failed (Bounced email) on more than 3 instances or non-updating of financial and other details viz email id, mobile no., landline, details or it is found to be belonging to a third person; 12. Under such other circumstances as PSPL might think just and proper on a case-to-case basis; 13. If the client is found to be KYC non-compliant or non-submission/wrong/false/incomplete submission of important documents.
PSPL shall have the right to close out the existing positions and sell the collaterals to recover any dues with or without the consent of the client before the de-registration of the client.
10. INACTIVE/DORMANT CLIENT ACCOUNT:
A client account will be considered inactive if the client account does not record any trades or does not register any financial transactions across exchanges for a period of 2 year or such other period as may be prescribed by SEBI/Exchange/s. If the account is marked as a dormant/inactive then the surplus Funds/Securities/commodities lying with PSPL shall be refunded/returned to clients at his/her last known Bank Account/DP account or at such other separate single bank/demat account created for keeping funds/ securities of such inactive and untraceable clients.
REACTIVATION: The client can reactivate his/her trading account by calling the call centre/customer care (after due authentication) or by sending a request email from his/her registered email id or by submitting a physical letter duly signed. Pentad shall also have the discretion to reactivate a trading account, after doing adequate due diligence, as the company may consider fit and proper. The detailed Policy in this regard is available on the website of the company, www.pentadsecurities.com
11. DISCLOSURE AS TO PROPRIETARY TRADES BY PSPL:
PSPL may carry out proprietary trades in addition to trades on behalf of its clients.
12. AMENDMENTS TO THE TERMS AND CONDITIONS:
These policies and procedures may be amended/changed unilaterally by PSPL, provided the change is informed to the client through any one of the means or methods like posting on the website of PSPL, or sending by speed post/courier/registered AD/email, SMS or displays on the notice boards of branch/main office, or by a newspaper or by any other suitable means, and the same shall be binding on the client.