Branch Process Manual-Feb09

Version 4.0 February, 2009

BRANCH PROCESS MANUAL

Compiled by : Q A Team __________ Date: 10th Feb,2009

Reviewed by : Mr. Sanjay Ghosh (V P – Quality Assurance) __________ Date: 10th Feb,2009

Approved by : Mr. Amit Majumdar (Exec. Director – Ops & Alt Business) ___________ Date: 10th Feb,2009

Effective Date: 10th Feb,2009

Revision Date: ______________

Reason for Revisions: __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________

Foreword

People, Process and Technology are the three most important verticals in today’s business. In pursuit of providing service truly personalized it’s very important for all Angelites to have a clear understanding of the processes. However, I also firmly believe that any process is as effective as it’s understood and more importantly, it’s accepted to be important. Therefore, unless there is an acceptance of a need to have processes in the first place and then to also have a clear understanding of those processes, our services cannot be effective. You will appreciate that in business and especially the one that we pursue ever so passionately, it’s the operational efficiency that retains customers and we all know the exponential costs saving in retaining a customer than getting a new one! Every successful corporate enterprise has a core strength, an intrinsic cutting edge that keeps it rising up the value chain and brings it closer to customers. We should never lose sight of this.

Branch Process Manual (BPM Ver 4.0) is designed in such a manner, which practically covers a broad‐based idea of all existing processes and changes that had taken place in past one year. An intent reading of this document will help you achieve efficiency and in return, achieve customer delight!

A strict adherence of BPM 4.0 is highly recommended for all branch employees. Employees are requested to sit for On‐Line Evaluation Tests once the learning is complete.

For any clarifications or suggestions, please feel free to write to the process owners as mentioned in the manual.

It may please be noted that this manual, contents and processes outlined therein are proprietary information of Angel. Nobody is permitted to utilize or copy the same for any use other than for using the same for carrying out the operational process at Angel.

Regards

Amit Majumdar (Executive Director – Operations & Alt Business)

INDEX

Sr. No Particulars Page No.

I About Angel 12‐18

1 Investment Committee 14

2 About Angel 15

3 Our Vision 16

4 Our Business Philosophy 17

5 CRM Policy 18

II Compliance 19‐38

1 Marketing 21

2 Accounts Opening 21

3 Risk & Dealing 21

4 Issue of Contract Notes / Bills 22

5 Collection 23

6 Pay ‐ out Systems 24

7 Other Matters 24

8 General Check List on BSE & NSE Compliances 26

9 Guidelines to deal cases of Clients defaults 27

10 Annexures 30‐37

III Sub‐Broker Registration 39‐53

1 Guidelines for registration as a remisier for individual 41

2 Guidelines for registration as a sub‐broker for individual in BSE

43

3 Guidelines for registration as a sub‐broker for individual in NSE and

NSE F&O

47

4 Remisier and Sub Broker Registration Checklist 52

IV KYC 54‐78

1 Introduction 56

2 KYC First point of contact for customer delight 56

3 KYC processes at Angel (CSO) 57

4 Documents required 57

5 Important points to be remembered? 62

6 Important links used for KYC 64

7 Checklist of Documents Required for Opening Trading Account 73

8 Checklist of Documents Required for Opening Commodities Account

74

9 KYC Checklist 75

V Dealing 79‐114

1 Introduction 81

2 Risk & Dealing 81

3 Dealer: Pre‐Market Activity 82

4 Dealer‐ Market Activity 87

5 Dealer‐ Post Market Activity 87

6 Other activities 88

7 Dealers Call Evaluation Process 89

8 Basics of Stock Market 90

9 Securities : a) Regulator

b) Participants

91‐94

10 Secondary Market : a) Stock Exchange

b) Stock Trading

95‐99

11 Products in Secondary Markets 99

12 Products and Services we offer at Angel 100

13 Derivatives 103

14 Miscellaneous: a) Corporate actions

b) Index

c) Clearing & Settlement and Redressal

d) Auction procedure.

104‐111

15 Dealing BPS Checklist 111

VI Security Of Your Shares DP/DEMAT

115‐141

1 Introduction 117

2 Advantages of having DP a/c with Angel

117

3 Different features of Angel’s DP 118

4 Tracking of transfer of shares 119

5 Charges for Depository Services 120

6 Benefits and connectivity requirements 121

7 Compliance requirement for Branch 121

8 Filling of DIS for different transactions 122

9 Points to be noted for Dematerialization of Shares 123

10 Useful utilities and link for DP services (cross net) 124

11 Pay‐in shortage confirmation 129

12 Pay‐out process and shortage confirmation 130

13 Auction Bills 133

14 Marking of shares for F & O collateral and margin reports 133

15 Corporate actions 135

16 Important notes 136

17 Additional useful utilities/ links for DP & Demat services 137

18 DP/ Demat checklist 137

VII Banking Operations

142‐212

1 Introduction 144

2 Banking operations at branches 144‐159

3 Cheque bouncing procedure 159

4 Essential reports to be viewed by the branches 159

5 Process for requesting for a pay‐out 160‐175

6 The Bank Reconciliation Policy 175

7 The policy for Inter‐ segment fund transfer 177

8 Exhibits related to banking 179‐199

9 Annexures 200

10 Banking Checklist 210

VIII Investment Advisory Desk

213‐221

1 Introduction – Investment Advisory at Angel 215

2 IAD: Pre‐Market Activity 216

3 IAD: Market Time Activity 217

4 Dealer: Post Market Activity 218

5 Other activities 219

6 Certifications 220

7 Reading Research reports, sector reports, event updates 220

8 IAD Checklist

220

IX Portfolio Management Services 222‐230

1 Why should one invest? 224

2 Portfolio Management Services 224

3 Portfolio Management Service (PMS) at Angel 224

4 Key elements of Angel's PMS 225

5 PMS operational process flow and research domain 225

6 Different products in PMS offered by Angel 226‐228

7 Benefits which investors gain from our PMS 228

8 Fee structure 229

9 PMS operational process at CSO 229

10 Documents necessary for PMS 229

X Initial Public Offer (IPO) & Mutual Funds (MF) 231‐282

1 What are Mutual Funds? 233

2 What are the benefits of investing in Mutual funds? 233

3 Types and schemes of Mutual Funds 234

4 Mutual Fund sales process flow 236

5 MF Application form process flow 237

6 Why MF with Angel? 240

7 Back‐end support: Angel Back office (MF) 242

8 What is Initial Public Offer or IPO? 257

9 Hierarchy for an IPO 258

10 About Angel’s IPO Distribution (Pre and post IPO process) 259

11 Annexure 268

XI Trading in the new age E‐Broking Services

283‐290

1 Introduction 285

2 E‐broking products offered by Angel 285

3 USP's of Angel's E‐broking service 288

4 The salient features of Angel's E‐broking Service

289

XII Risk Management

291‐312

1 Introduction 293

2 Importance of Risk Management 293

3 Processes in Risk Management 293

4 How to identify, monitor and control risk ? 293

5 Online Risk System 293

6 Offline Risk System and two major reports in Offline Risk System

294

7 Comprehensive Risk Report 294

8 Pure Risk and Projected Risk .How are they calculated?

297

9 Collection Report 297

10 Benefits of Online and Offline system 299

11 F&O margin violation report 299

12 Case Studies: F&O Margin Violation Report against F&O Ledger balance in Collection Report.

300

13 SB Credit 305

14 Penal Charges 306

15 Risk Management checklist 310

XIII Margin Funding 311‐323

1 Introduction 315

2 Policy 315

3 Account Opening for Margin funding 318

4 Margin Requirements 320

5 Buy 320

6 Sell 322

7 Funds Payout 323

8 Shares Payout 323

9 Risk Management 323

10 Interest Charge 323

11 Repayment 323

XIV Technology At Angel

324‐337

1 How important is IT for angel 326

2 What are the hardware requirements for our clients 326

3 What service standards does angel follow for an ideal IT setup

327

4 Which are the different technologies angel provides for connectivity

328

5 For all exchanges: cash, F&O & commodities 329

6 Processes followed by IT at regional branches 330

7 Annexure.1: ODIN checklist: followed everyday 333

8 Annexure 2: WAN link testing: followed on weekly basis 334

9 Annexure 3: UPS testing: followed fortnightly 335

10 Angel advancing with technology 336

11 New Branch Commissioning 336

XV Commodities Operations

338‐356

1 Introduction 340

2 Essential Reports to be viewed by branches 340

3 Deliveries & Settlement 350

XVI Quality Assurance

357‐390

1 Definition of Quality 359

2 Key Benefits of Quality to an organization 359

3 Angel definition of Quality & QA Policy 360

4 Role of Quality Assurance Cell At Angel 361‐378

5 BPS 379‐389

CHAPTER ‐ I About Angel

1.

2.

3.

4.

5.

CHAPTER COVERAGE

Investment Committee

About Angel

Our Vision

Our Business Philosophy

CRM Policy

CHAPTER ‐ II Compliance

1. Marketing

CHAPTER COVERAGE

2.

3.

4.

5.

6.

7.

Accounts Opening

Risk & Dealing

Issue of Contract Notes / Bills

Collections

Pay‐out Systems

Other Matters

8. General Check List on BSE & NSE Compliances

9.

Guidelines to deal cases of Clients defaults

10. Annexures

1.

2.

3.

MARKETING

Various modes for tapping prospective clients [like personal references, telephone directory, and existing clients] may be used.

Personal meeting with a client while establishing relationships and then periodical meets advocated for feedback.

Due care is required to be exercised to see that whatever we promise , in terms of providing services, is fulfilled and honored. Absolute restraint is advocated in not promising anything which is unfair, unrealistic or not capable of being performed as per rules of the trade [like guaranteed returns, allowing continuous debits etc].

ACCOUNTS OPENING

At the time of accepting the KYC forms, the branch staff should meet the clients and clients should be interviewed to ascertain the background, level of knowledge of the market etc.

While processing new applications, references should be insisted on and verified.

Staff should be provided adequate training to process the account opening procedure.

Original documents for PAN, Residence proof etc should be verified and copies kept. All copies and supporting documents sent to the KYC should be signed by the Client. The Branch should verify the originals and affix a stamp “Verified with Originals” and sign the same.

First two pages of KYC should be kept at the branch level for signature verification, etc in future.

A Database of all Clients should be maintained with all the crucial information in an Excel Sheet for ready reference by the Branch staff.

RISK & DEALING

Branch to continuously monitor the trading account of the client & ascertain risk, and give periodical follow‐up calls for the recovery of dues [including margins, M to M, VaR etc].

4.

While allowing positions/exposure, the deposit, Networth etc must be kept in mind.

Orders for trade should be accepted from clients or authorised persons only. Requisite authority letter for this has to be obtained, in advance.

For illiquid options, dealers & sub brokers to take care & not entertain unrealistic prices.

Before executing any trade, client positions/margins etc need to be checked up.

Caution to be exercised by dealers for any order for illiquid scrips.

Branch should avoid any unfair trade practice as defined in Unfair Trade Practices Regulations.

Upon execution of trades, confirmation to be given to the client immediately after market hours. The tele‐conversations relating to trade confirmations should be recorded and preserved carefully for future reference/use.

Any request for code‐change should be critically examined. To be monitored by branch heads personally. In BSE, the erroneous client codes can be changed at the BOLT itself in the post‐closing session. In NSE, the changes have to be informed to the CSO, latest by 3:45 PM. Any changes made thereafter, have to be made in the back office and if made without the approval of the exchange, they attract penalty.

Any error in punching of orders must be immediately reported at the CSO for insurance claims. All trade details, along with a brief description of the incident, terminal no/ BOLT No, Name of the dealer, NCFM Regn no. Etc have to be furnished immediately to the CSO, which will provide proper guidance in the matter after reviewing the details.

ISSUE OF CONTRACT NOTES / BILLS

Contract notes are to be issued within 24 hours of the trade. Mode of dispatch to the client and documents evidencing dispatch to be carefully monitored & maintained.

Name of the person signing contract notes to be printed on the top. The signatory should be duly authorised by the CSO and his Specimen signature has to be filed with the exchanges in advance. Any changes in

5.

the Authorized Signatory must be intimated to the CSO for necessary actions thereto.

When contract notes are sent by courier, an acknowledgement is to be properly kept. Similarly, acknowledgements are required to be kept properly for all contract notes irrespective of the mode of delivery.

Client daily Margin statement is to be printed on a plain sheet and sent along with the Contract Notes on a daily basis.

If somebody else is collecting /signing the acknowledgement for contract notes on behalf of the client, then the necessary authority letter of the client should be obtained / kept. (Format attached as Annexure ‐ 1)

COLLECTIONS

A continuous process requiring due importance.

Segment‐specific follow‐ up on a continuous basis required.

Proper verification for 3rd party cheques should be done. 3rd party cheques are strictly not allowed and cannot be accepted.

For pay orders, verification required to see if they are made from client’s account only.

For cheque bouncing, the detailed procedure set out by the CSO must be followed. (refer guidelines attached for procedure)

Squaring‐off process, where collections are not coming, must be adhered to with proper procedures and documents.

Client funding should not be done with a view to deliberately getting business.

Where clients are maintaining a running account, it should reach zero level periodically. Monitoring required.

Monthly confirmation of the running account must be obtained from clients.

Inter‐segment funds transfer [equity segment only] must be followed as per the procedure laid down. (refer Annexure ‐ 2 for procedure)

6.

7.

PAYOUT SYSTEMS

Payout is required to be made within 24 hours.

Where bill to bill system of accounting is maintained, payouts are required to be sent within 24 hours after the same has been received from the Exchange.

Before payout, branch should ascertain the client’s risk & position when the payout cheques are to be released.

Securities to the client required to be delivered within 24 hours after the same have been received from the Exchange.

OTHER MATTERS

Board showing the Regd Office of the company should be displayed outside the Branch office.

SEBI Registration Certificates & BSE, NSE, MCX & NCDEX are required to be displayed on notice boards at the reception area of the Office.

Name‐board to meet the requirements of the Companies Act [Reg office address must be mentioned in the name board].

Any advertisement to be given by the Branch or its Sub Broker has to be referred to the CSO [for seeking approval of the Stock Exchange].

Registration under Shops and Establishment Act or any other local rules to be arranged.

Municipality permission for putting up Angel’s Sign board to be obtained from the local authorities (if reqd.)

Employee attendances register to be properly maintained. (As per local rules)

Client’s complaints register to be maintained /monitored. Redressal mechanism to be established.

Intimation of changes in contact details of Sub‐broker/ Remisier to be sent to the CSO instantly.

Provisions of Anti Money Laundering Act should be explained to the Branch Staff & Sub brokers. All sub brokers have to appoint a Principal Officer after SEBI registration under the Act and report the appointment

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The details of Rules etc in this regard can be had from the Back office.

Allotment of CTCL terminal to a Sub broker to be done only after the application for registration as a Sub broker has been received at the CSO and has been found complete in all respects. It should continuously be ensured by the branch that the terminal allotted is being used by the rightful user who is NCFM certified, at the location allotted.

Risk & hazards including system failure, connectivity‐related issues etc must be explained to Sub brokers.

Litigations‐related issues to be reported to / referred to CSO.

Branches should ensure that Service Tax registration is immediately obtained by the Sub broker on his registration as a Remisor or Sub – broker in BSE and Authorised Person/Sub broker in NSE. A copy of the Service Tax registration should be sent to the CSO.

8.

GENERAL CHECKLIST ON BSE & NSE COMPLIANCES

Sr No 1

2

3

4

5

6

7

8

9

Particulars Bulk deal reporting(0.50% of the total no. of shares listed on Exchange) Issue of Contract Notes & ensuring the same is signed by the person Authorised by the Company and approved by the Exchange. Client Margin Statement should be sent along with the Contract Notes daily. Reporting of Allotment of CTCL Terminals or IML Advertisement

Appointment of Authorised / Remisor Sub broker Registration

Display of SEBI Regn. certificates and NSE /BSE /MCX / NCDEX on Notice Boards Ensure the NEAT/ BOLT and CTCL terminals are used by Authorised persons. Names of Employees who have left to be removed immediately Back office logins of Employees who have left to be disabled immediately

Due Date Same day evening

Within 24 hrs from the Execution of trade ( POD’s and acknowledgements to be maintained properly) Before allotment of terminal

Approval to be taken at least 7 days in advance before issuing an Advertisement Approval to be taken before appointment of authorised persons Papers to be sent to the CSO immediately on tying up for a Sub broker relationship. At all times

At all times

At all times

Responsibility Branch to report data to CSO

Branch

Branch

Branch to send the matter to the CSO

Branch to send papers to the CSO Branch

Branch

Branch

Branch

10 Review operations of SB – location of CTCL terminal, User of the same, review of trading patterns etc

At all Times Branch

9.

GUIDELINES TO DEAL WITH CASES OF CLIENTS’ DEFAULTS & CHEQUE BOUNCING

Procedure in case of Client defaults:

a) Contract slips/bills must be signed properly by the clients/authorized representatives. Proper authorization letter should be taken in case client sends somebody else for collection. Although signature need not be perfect, but it should be comparable and undisputable.

b) In case of default‐ if the client states that he is unable to pay immediately but promises to pay later, adopt the following procedure:‐ • try to take post‐dated cheque/s for amount due; • get the ledger and contract notes signed by the client; • obtain letter from the client covering the schedule of future payments;

c) Preserve : • signed contract notes / bills ; • proof of sending bills/contracts by courier etc.; and • proof of delivery of bills/contracts by courier etc. • Arrangement for recording of telephone conversations with

defaulting client should be made covering Amount/s, Due Date/s, Date of recording Exchange/s and major scrips.

d) In case of adjustment of payments/shares against accounts of family/friends or third party payments, proper authority letters from all the parties must be obtained.

e) In case of disputes, order file and trade files of relevant day/s should be preserved.

f) Time limit : If hopes of recovery by follow up have faded, inform the Legal department immediately but not later than 15 days in case of cheque bouncing and within 4 months in other cases. Also send original above mentioned documents to Legal department at the CSO. For small amounts i.e. below 50,000/‐ , offer the client the option to settle the payment for lesser amount and close the business with him, since it is not economical to initiate such cases.

g) Major defaults older than 6 months may also be intimated to the Legal department at the CSO for civil recovery.

h) When default has already occurred, do not pass JV for transferring funds. Obtain letters for all the inter‐exchange, inter‐segment, inter‐ family/friend transfers and third party payments should be backed by proper authorisations signed by all the parties.

i) In case of default, do not allow the client to trade further unless the debit is cleared. Instances have been seen when despite cheque bouncing, client was allowed to trade for a long time.

Procedure, in case of Cheque Bouncing

• Legal notice to a client for a cheque bouncing case is sent from the Legal Department at CSO. For a Legal notice to be sent, the following are to be kept in mind:

• The Cheque and the Bank memo in original have to be sent to the Legal Department, CSO.

• If the cheque is already with CSO, proper instructions along with all details of the client and the cheque have to be sent to CSO

• The Legal notice has to be sent within 30 days of Bank memo.

• In case the memo has become more than 30 days old, the cheque has to be presented again in order to get a fresh Bank Memo.

• The branch has to inform CSO about the progress made with the client after issuance of the notice. Also, a legal case will be filed in the courts only after the branch has requested for the same.

Legal / Process for Recoveries: Following is the brief note on the litigation process for initiating legal actions for recoveries of dues from the clients:

a. Branch / Sub‐broker to promptly intimate CSO about Cheque/s bouncing and / or Ledger Debit/s of clients.

b. CSO‐ Legal & Compliance, calls for required papers (returned instruments, banker’s advises, copies of Contract Notes, PODs etc.) from the Branch / sub‐broker.

c. Based on intimation / feedback from Branch / sub‐broker, CSO arranges to issue legal notice (either as required under Negotiable Instrument Act or for civil actions) to the Client – Normally a time period up to 15 days is offered to a client to clear the dues thro’ legal notice.

d. CSO arranges to intimate the Branches / Sub‐brokers of legal actions initiated by release of notice.

e. Based on intimation from CSO, it is expected that Branch / Sub‐brokers would also attempt follow‐up actions with the Client for recoveries. Branch / Sub‐broker are required to arrange follow‐up actions with the

client and obtain DD / PDCs, within 15 days’ time. The outcome should be immediately informed to CSO.

f. Depending upon outstanding debits (Rs. 50,000/‐ and above) and documentation / papers in order (returned instruments, banker’s advises, copies of Contract Notes, PODs etc.) and upon expiry of time limit given in the notice and if the payment has not come, actions initiated to file criminal / civil/ arbitration case in appropriate court / Exchange. Branch / Sub‐broker is expected to provide relevant document in time to the CSO, to initiate the court process. Unless proper back‐up papers are available, it would be difficult to proceed.

g. For criminal / civil suit/s, after filing the case, the court would list the matter on its convenient date for verification / admission / further direction/s. Then, upon hearing and after verifications, at a separate hearing at a scheduled date, the court may direct the issue of summon/s to the Opposite party for appearance, as may decided by the court. Similar procedure would be adopted by the exchange in Arbitration application/s for fixing the hearing date. Arbitration ref. is required to be commenced within a period of about 6 months from the date of the last trade by which the account of client turned into debit. Therefore Branch / Sub‐broker should, accordingly, arrange to intimate the CSO.. It has been observed that the Exchange’s Arbitration mechanism is a faster process, with an appeal jurisdiction available and hence this mechanism may be preferable in such matters.

h. Once the case is admitted / listed, it would then undergo a process of hearing / verification / examination / cross examination of evidence etc. before a final order / judgment / award is pronounced. Thus, any litigation is a process involving time, money and resources; and hence, due care is required to be exercised in initiating / handling the process.

i. MIS Reports to the Branch:

j. CSO would arrange for an updated status report of litigations initiated thro’ a software module / utility (to be developed), and the Region / Branch would have viewing facility thereto.

Note: This note is a simplicitor, to list down the process in brief. Court procedure, at times, may vary.

10. Annexures:

(Format of Authority letter for executing trades/collecting contract notes by 3rd party)

To, Angel Broking Ltd.

(Annexure – 1)

From:________________________ _____________________________ _____________________________

Date:____________

Angel Capital and Debt Market Ltd. (Cash & F&O Segment) Angel Commodities Broking Pvt. Ltd. (Member of MCX and NCDEX)

Dear Sir,

Authority Letter 1. I/We am/are client/s of the above mentioned companies having Client

code _______. Since it is not possible for me/us to personally manage my/our account / visit your office/Branch from time to time, therefore, I hereby authorize:

Mr/Ms. __________________________who signs as _____________________:

‐ To collect contract notes, bills, ledgers, payments in my name, and other correspondences and to correspond on my behalf;

‐ To place orders on my behalf from time to time;

2.

3.

This authority shall remain in force till I/We inform you of any change/revocation in writing. I undertake to ratify the above acts done by my authorized person and the acts done by him/her shall be binding on me.

Yours truly,

_______________________________ (Signature as per specimen recorded in the KYC form) Name: Client Code:

NOTE: 1) This authorization does not include the authority to receive payments/scrips in the name of the authorized person / or to operate Bank/ Demat account, for which a Power of Attorney is required.

2) Sub brokers shall not be authorized to collect the contract notes on behalf of their clients.

( Format for Intersegment transfer NSE Cash to F&O)

(Annexure –2)

Angel Capital & Debt Market Ltd. G‐1 Akruti Trade Centre, Road No. 7, MIDC, Andheri East, Mumbai 400 093

Sub : Request for Transfer of Funds from Cash Segment to F&O Segment.

Dear Sir,

I/We hereby request you to kindly debit my/our ledger account (client code

__________)by Rs._______________

Rupees_________________________________ ____________ _____________ ) in

the Cash Market segment and credit my ledger account / ledger account of my

Family member

Mr./Mrs/M/s_________________________________________________________

_ (client code___________) by the same amount in the F&O Segment

I/We hereby understand that the said amount would be debited in my /our Ledger account and I/We hereby confirm that we will have no claim whatsoever from the Company as the same has been done only on my/our

express authority.

Thanking you,

Signature: _______________________

Name: __________________________

Client Code: _____________________

Date:

To,

(Format for Intersegment transfer F&O to NSE Cash ) (Annexure – 2... Cont)

Angel Capital & Debt Market Ltd. G‐1 Akruti Trade Centre, Road No. 7, MIDC, Andheri East, Mumbai 400 093

Sub : Request for Transfer of Funds from F&O Segment to Cash Segment

Dear Sir,

I/We hereby request you to kindly debit my/our ledger account (client code __________) by Rs. _______________ Rupees___________________________ __________________ _____________ ) in the F&O Segment and credit my ledger account / ledger account of my Family member Mr./Mrs/M/s_____________________ _____________________________________ (client code___________) by the same amount in the Cash Market segment

I/We hereby understand that the said amount would be debited in my /our Ledger account and I/We hereby confirm that we will have no claim whatsoever from the Company as the same has been done only on my/our express authority.

Thanking you,

Signature: _______________________

Name: __________________________

Client Code: _____________________

Date:

To,

(Format for Intersegment transfer BSE cash to NSE Cash) (Annexure – 2... Cont)

Angel Broking Ltd. G‐1 Akruti Trade Centre, Road No. 7, MIDC, Andheri East, Mumbai 400 093

Sub : Request for Transfer of Funds to Cash Segment of Angel Capital & Debt Market Ltd

Dear Sir,


__________) by Rs. _______________ Rupees______________________________

_______________ _____________ ) and credit my ledger account / ledger

account of my Family member

Mr./Mrs/M/s_________________________________________________________

____ (client code___________) by the same amount in the Cash Market segment

of Angel Capital & Debt Market Ltd.

I/We hereby understand that the said amount would be debited in my /our Ledger account and I/We hereby confirm that we will have no claim whatsoever from Angel Broking Ltd as the same has been done only on my/our express authority.

Thanking you,

Signature: _______________________

Name: __________________________

Client Code: _____________________

Date:

To,

(Format for Intersegment transfer‐BSE Cash to NSE F&O) (Annexure –2... Cont)

Angel Broking Ltd. G‐1 Akruti Trade Centre, Road No. 7, MIDC, Andheri East, Mumbai 400 093

Sub : Request for Transfer of Funds to F&O Segment of Angel Capital & Debt Market Ltd

Dear Sir,


__________) by Rs. _______________ Rupees____________________________

_________________ _____________ ) and credit my ledger account / ledger

account of my Family member

Mr./Mrs/M/s_________________________________________________________

____ (client code___________) by the same amount in the F&O segment of

Angel Capital & Debt Market Ltd.

I/We hereby understand that the said amount would be debited in my /our Ledger account and I/We hereby confirm that we will have no claim whatsoever from Angel Broking Ltd as the same has been done only on my/our express authority.

Thanking you,

Signature: _______________________

Name: __________________________

Client Code: _____________________

Date:

To,

(Format for Intersegment transfer – NSE Cash or F&O to BSE Cash) (Annexure – 2... Cont)

Angel Capital & Debt Market Ltd G‐1 Akruti Trade Centre, Road No. 7, MIDC, Andheri East, Mumbai 400 093

Sub : Request for Transfer of Funds to Angel Broking Ltd

Dear Sir,


__________) by Rs. _______________ Rupees__________________________

___________________ _____________ ) in the Cash Market Segment / F&O

Segment and credit my ledger account / ledger account of my Family member

Mr./Mrs/M/s_________________________________________________________

____ (client code___________) by the same amount in Angel Broking Ltd.

I/We hereby understand that the said amount would be debited in my /our Ledger account and I/We hereby confirm that we will have no claim whatsoever from Angel Capital & Debt Market Ltd as the same has been done only on my/our express authority.

Thanking you,

Signature: _______________________

Name: __________________________

Client Code: _____________________

Date:

To,

(Format for sending Intersegment Transfer by branch for multiple clients or below Rs.3,00,000) (Annexure – 2.. Cont)

Angel Broking CSO, Mumbai

Dear Sir,

Sub: Inter segment funds transfers

Please transfer the following amounts:

Sr Client

From

To

No Code Name of client Segment Segment Amount

We are sending separately the authority letters received from Clients for amounts over Rs.3,00,000/‐.

Thanking You For Angel Broking,

______________ Branch

________________ ______________ Prepared By Approved By

Branch Head

Helplines

Contact Person

Designation

Location Tel no ‐ Extn

Mr. Manish Khandelwal AVP – Ops & Compliance Akruti (022) 2835 8800 ‐ 592

Mr. Tarang Mehta

VP – Legal & Compliance Akruti (022) 2835 8800 ‐ 551

CHAPTER – III Sub – Broker Registration

1.

2.

3.

4.

CHAPTER COVERAGE

Guidelines for registration as a remisier for individuals

Guidelines for registration as a sub‐broker for individuals with BSE

Guidelines for registration as a sub‐broker for individuals with NSE and NSE F&O

Remisier & Sub Broker Registration Checklist

1.

Guidelines for registration as a remisier for individuals

Remisier: A person who is engaged by a member primarily to solicit commission business in securities shall be called a Remisier.

Registration of Remisier is with Bombay Stock Exchange Limited only (Under Rule ‐ 216 to Rule 235 of Rules, Bye Laws & Regulations of the Exchange).

Documents required for Remisier Registration are: • Form B (Form for Approval of Appointment of Remisier) (Name, Trade Name, Residence address, Office address along with

telephone numbers, Signature across the photo, Sex, DOB, Present Occupation to be mentioned as investment consultant, Bank A/c details, PAN No. (PAN is mandatory).

• Certified True Copy of PAN Card required. • Minimum age requirement of the Applicant should be 21 years. Age Proof & Address Proof (duly certified – by a C.A/ Notary).

Passport, Driving License, Ration Card, Voters Identity Card, Copy of Income Tax Return.

• Qualification Proof (duly certified – by a C.A/ Notary)

Minimum Qualification HSC

SSC + Experience of Minimum 2 years in Capital market

Proof Required HSC Mark sheet

SSC Mark sheet + Experience Letter from Broker / Any of his Sub‐brokers (ref note )

Undertaking B (On the Applicant’s letterhead– Remisier Application) duly signed by the applicant.

• Annexure A (On the Applicant’s letterhead– Remisier is not connected with any other kind of forward business) duly signed by the applicant.

• Undertaking (On the Applicant’s letterhead– declaration for Remisier cancellation on receipt of sub‐broker registration certificate from SEBI – BSE) duly signed by the applicant.

• If the applicant was affiliated with any other Trading Member, then Discharge certificate from the previous member is compulsory.

• Signature is required wherever applicable

For a Sole Proprietorship Firm, the Firm Stamp is required on all the documents and the proprietory rubber stamp and signature is required across the photo.

• Additional Requirements for Partnership Firms are:

• Form for approval of appointment as remisior ‐ Form C is required

(name of the firm, address telephone number of the firm, copy of

partnership deed along with ROF status to be attached, Separate Annexures for Partner to be attached. Bank details should be completely

filled in along with the date of opening of account for the partnership

firm

• Signature of partners required along with partnership rubber‐stamp,

wherever applicable.

• Annexure (separate annexures required for each partner, along with separate photos on each annexure, stamp and signature across photo

required. In annexures, the following details need to be mentioned i.e.

name of the partner, residential address along with telephone numbers/education qualifications, present occupation to be mentioned

as “Investment consultant”, Pan number, Bank details should be filled in

along with date of opening of account.

• Certified True Copy of PAN Card of all the Partners & the Partnership

Firm required by the CA/Notary along with membership or notary

number.

• Qualification proof of all the Partners required duly certified by C. A. /

Notary along with membership or notary number.

• Certified True copy of Partnership Deed/ registration certificate attested by Chartered Accountant/ / Notary along with membership or notary

number.

• Undertaking B (On the Applicant’s letterhead– Remisier Application) duly signed by all the partners along with the firm stamp.

• Annexure A (On the Applicant’s letterhead– Remisier is not connected

with any other kind of forward business) duly signed by all the partners along with the firm stamp.

• Undertaking (without any date) (On the Applicant’s letterhead–

declaration for Remisier cancellation on receipt of sub‐broker registration certificate from SEBI – BSE) duly signed by all the partners along with the firm stamp.

Note:

• All proof submitted should be duly attested by a C.A or a Notary along

with their membership/registration number.

• Kindly fill in the details of date/place/pan number wherever applicable

• Kindly mention applicant name on Form B/ Form C/Annexure

/Undertaking where it is printed as “ NAME OF THE APPLICANT”

• Signatures are required, wherever applicable

• Telephone number should be specified /Bank account opening date

should be mentioned along with the address and account number

• Kindly check that the date of birth is same in all the documents

submitted, in case there is a difference; submit affidavit for the same.

• If Mark‐sheet is submitted as qualification proof, kindly check whether a passing mark‐sheet is provided (FAIL /EXEMPTION should not be

mentioned)

• All forms to be completely filled in. Wherever clause is not applicable, please put N.A

Important Points:

• Sub‐ Broker registered with SEBI, Member of Other Exchange, cannot become a Remisier.

• Only Individual /Proprietary Firm and Partnership Firm can become Remisier. (A Corporate is not allowed to become a Remisier).

• It may be noted that the applicant can be a Remisier to only One Member at a time. (Under Rule‐ 221 of Rules, Bye Laws & Regulations of the Exchange).

• Member/applicant is required to read the form carefully and also to go through Rules, Regulation and Bye‐laws of the Exchange related to Remisier before appointing /applying for Remisier registration.

2. Guidelines for registration as a sub‐broker with BSE

Documents required for Sub‐broker registration with BSE are:

Certified True Copy of PAN Card required. Two Demand Draft/Pay order of Rs.10,000/‐ drawn in favor of “Securities and Exchange Board of India‐SEBI. & Rs. 1,000/‐ in favor of Angel Broking Ltd.” Payable at Mumbai (being processing fees of BSE).

Member Sub‐broker Agreement (Name, Trade name and address of applicant should be filled in wherever applicable (Refer note 1 & 2).

Application form for Obtaining Recognition as Sub‐broker (Application should be completely filled in, whichever clause is not applicable ‐ please put N.A.

Form B (Application to SEBI for Registration). (Application should be completely filled in, whichever clause is not applicable ‐ please put N.A)

Annexure A (Reference letter from the Bank ‐ Current or Saving A/c– as per format enclosed).(Should be on Bank letterhead along with the bank seal, duly signed by banker and the applicant) Annexure B (reference letter from the Chartered Accountant– as per format enclosed) (should be on letterhead of C.A. along with C.A. Seal, signature & Membership number).

Annexure C (On the Applicants’ letterhead – Applicant is not involved in any past offence).

Undertaking (On the Applicant’s letterhead – declaration for Remisier cancellation on receipt of his Sub‐broker registration certificate from SEBI).

Undertaking from the applicant that SEBI has not taken any action like cancellation of registration /debarred or prohibited – on the applicant’s letter head.

Undertaking for Angel from the Applicant (On letterhead of the applicant & Duly signed)

Minimum age of the applicant should be 21 years. Age Proof (duly certified – by a C.A/Notary).

PAN Card, (Certified true copy by C A or notary along with their membership / Registration number)

Residential address proof ‐ (Birth Certificate, School‐Leaving Certificate, Election Card, Passport, Driving License.)

Qualification Proof (duly certified – by a C.A/ Notary)

Minimum Qualification

HSC

SSC + Experience of Minimum 2 years in Capital market

Proof Required

HSC Marksheet

SSC Marksheet + Experience Letter from Broker / Any of his Sub‐brokers (ref note below )

In case of Name Change ‐ Marriage Certificate/Affidavit is to be submitted (even if name or Spelling of the applicant differs on sub‐ broker application ‐ name‐change proof is a must). In case the Applicant is affiliated to any TM of another exchange – SEBI Registration Certificate & SEBI fees payment proofs to be submitted (duly attested by C. A) For a Sole Proprietorship Firm, the Firm Stamp is required on all the documents signed by the Applicant. Additional Requirements for a Partnership Firm are:

• Certified True Copy of PAN Card of all the Partners & Partnership Firm required. (certified by CA /Notary along with their membership number/registration number)

Undertaking for Angel from the Applicant (On the letterhead of the applicant & Duly signed by partners along with the seal.)

• Age Proof for all the partners (duly certified – by a C.A/ Notary). • Qualification Proof for all the partners (duly certified – by a C.A/

Notary). • A Copy of Partnership Deed Duly Certified by a C. A. / Notary. • Certificate from Registrar of Firms (ROF) duly certified by C. A. • All Partners’ Names & Firm Name should be mentioned in the C. A.

Reference Letter, Annexure C & Undertakings. • Registered Partnership Deed truly certified by CA/Notary along with

registration number (Highlight the clause of Dealing in shares & Securities in the partnership Deed)

• All Partners’ Signatures (with Stamp) required on Application for Recognition as Sub Broker, Form B, Annexure C, Undertaking, Bank letter and Agreement

Additional Requirements for Corporates are:

• Certified True Copy of PAN Card of all the Directors & the Company required.

• Age proof of all the directors (duly certified – by a C.A/ Notary). • A copy MOA & AOA/ Form 32 (any change in Director’s list/Sharing

pattern) should be submitted duly certified by a C.A or notary with registration number (Highlight the point where the clause to deal in capital market is mentioned.)

• Certificate of incorporation should be submitted duly certified by a C.A/Notary.

• Annexure E (On the Applicant’s letterhead – Board resolution signed by all the directors duly certified by a C.A)

• Undertaking from the applicant that SEBI has not taken any action like cancellation of registration /debarred or prohibited – on the applicant’s letter head

• All Directors’ Names & Company Name should be mentioned in C. A. Reference Letter & Annexure ‘C’ & Undertakings.

• All Directors’ signature (with stamp) required on Application for Recognition as Sub Broker Form B, Annexure C, Annexure E and Agreement.

Undertaking for Angel from the Applicant (On the letterhead of the applicant & Duly signed by directors along with seal.)

Note:

• Franking of the Member ‐ sub‐broker agreement will be done by the CSO.

• Signatures are required on all the pages of the Agreement at the end of the page along with rubberstamp, in case of Sole proprietorship / Partnership & Corporate firm stamp is required).

• All proof submitted should be duly attested by a C.A or a Notary. It should consist of their signature, stamp & membership number / Registration number)

• In case the Sub‐broker is registered as a Sub broker with any other recognized stock exchange, then a certified copy of the SEBI registration certificate is to be attached

• Name (SECURITIES & EXCHANGE BOARD OF INDIA OR SEBI) is to be spelled correctly in demand drafts submitted/Kindly mention name of the applicant on the reverse side of the demand draft. DD should be valid for six months and should be of current date (not more than 15 days old).

• Kindly fill in the details of Date/Place/Pan No wherever applicable.

• Kindly mention status in form B as individual/Sole Proprietor / Partner / Director as per the constitution

• Kindly check date of birth is same on all the documents submitted; in case there is difference, submit affidavit for the same

• If Marksheet is submitted for qualification proof, kindly check whether passing marksheet is provided (FAIL /EXEMPTION should not be there)

3.

• All forms to be completely filled in. Wherever clause is not applicable, please put N.A

Guidelines for registration as a sub‐broker for individuals with NSE and NSE F&O

Documents required for Sub‐broker registration in NSE are:

Certified True Copy of PAN Card required.

Demand Draft/Pay order ‐ of Rs.10, 000/‐ drawn in favor of “Angel Capital & Debt Market Limited”).

Member‐Sub‐broker Agreement (Refer note 1 & 2) (Name, Trade Name & Address of applicant should be filled in wherever applicable).

Form B (Application to SEBI for Registration)( Application should be completely filled in; whichever clause is not applicable, please put N.A)

Annexure A (Reference letter from the Bank – as per format enclosed) (Should be on Bank letter head along with bank seal duly by banker and the applicant)

Annexure B (reference letter from the Chartered Accountant– as per format enclosed) (should be on letterhead of C.A. along with C.A. Seal, signature & Membership number).

Annexure C (On the Applicant’s letterhead – Applicant is not involved in any past offence).

Annexure O (On the Applicant’s letterhead ‐ Applicant should not be having an equity holding of 10% in another trading member).

Undertaking for Angel from applicant (on letter head of applicant)

Minimum age requirement of the Applicant is 21 years.

Trade Address Proof i.e. Office address proof certified by CA /Notary along with membership/Registration number

Age Proof (duly certified – by a C.A/ Notary), PAN Card

Qualification Proof (duly certified – by a C.A/ Notary)

Minimum Qualification

HSC

SSC + Experience of 2 years in Capital

market prior to 1992

Proof Required

HSC Marksheet

SSC Marksheet + Experience Letter from Broker / Any of his Sub‐broker (ref note 5)

In case of Name Change ‐ Marriage Certificate/Affidavit is to be submitted (even if the name or Spelling of the applicant differs on sub‐ broker application, change name proof is a must).

In case the Applicant is affiliated to any Trading Member of another exchange – SEBI Registration Certificate & SEBI fees payment proofs to be submitted (duly attested by C. A or notary.))

For Sole Proprietorship Firm, Firm Stamp required on all the documents signed by the Applicant.

Additional requirements for Partnership Firm are:

• Certified True Copy of PAN Card of all the Partners & Partnership Firm required.

• Age proof for all the partners (duly certified – by a C.A/ Notary). • Qualification Proof for all the partners (duly certified – by a C.A/

Notary). • A copy of Partnership Deed duly certified by a C. A. / Notary.

(Highlight the clause of Dealing in shares & Securities in the Partnership Deed)

• Certificate from Registrar of Firms (ROF) duly certified by C. A. • Annexure `L1’ (Sharing Pattern) on the letterhead of Firm (duly certified

by C. A.). • All Partners’ Name & Firm Name should be mentioned in C. A.

Reference Letter & Annexure ‘C’. • All Partners’ Signature (with Stamp) required on Form B, Annexure C,

and Annexure O & L1 and on agreement.

Additional requirements for Corporate are:

• Certified True Copy of PAN Card of all the Directors & Company required.

• Age proof of all the directors (duly certified – by a C.A/ Notary). • A copy MOA & AOA/ Form 32 with ROC For any resignation or

appointment (any change in Director’s list/Sharing pattern) should be

submitted duly certified by a C.A. Highlight the point where the clause to deal in capital market is mentioned. (in Memorandum clause, the clause of dealing in capital market should be mentioned in main clause)

• Certificate of incorporation should be submitted duly certified by a C.A/ Notary.

• Annexure E (On the Applicant’s letterhead – Board resolution signed by all the directors duly certified by a C.A).

• Annexure `L1’ (Shareholding Pattern) on the letterhead of Company (duly certified by C. A.).

• Annexure “O” – Certificate from sub‐broker relating to shareholding pattern (Should on letterhead of the applicant)

• All Directors’ Names & Company Name should be mentioned in C. A. Reference Letter & Annexure ‘C’.

All Directors’ signature (with Stamp) required on Form B, Annexure C, and Annexure O & L1 and on Agreement.

Note:

• Franking of the member sub‐broker agreement will be done by the CSO. • Name (Angel Capital & Debt Market Limited) is spelled correctly in

demand drafts submitted/Kindly mention name of the applicant on reverse side of demand draft. DD should be valid for six months.

• Kindly fill in details of date in form B as per proof given • kindly mention status in form B as individual/Sole Proprietor / Partner

/ Director as per constitution • Kindly mention correct qualification details in Form B as per proof given

(Eg if HSC marksheet is given, mention HSC on Form B). • Kindly mention applicant’s name on annexure/undertaking where it is

printed as name of the applicant • Signatures are required on all the pages of the Agreement. • On Annexure O ‐ Sharing pattern as on date should be same as that on

Annexure L1. • In marksheet proof submitted for qualification ‐ kindly check whether

passing marksheet is provided (FAIL /EXEMPTION should not be mentioned)

• In case of Corporates, in Memorandum clause, the clause for dealing in capital market should be mentioned in main clauses.

• All proof submitted should be duly attested by a C.A or a Notary. It should consist of their signature, stamp & membership number/Registration number)

• In case Sub‐broker is registered as a Sub broker in any other any recognized stock exchange, then a certified copy of the SEBI registration certificate is to be attached.

• All certification by a C.A should consist of his signature, stamp & membership no.

• All forms to be completely filled in; whichever clause is not applicable, please put NA

For F&O Application:

New application form for application of Authorised person in Future & Options Segment of NSEIL (Annexure D) (In Annexure D following details need to be filled in i.e. Office address should match with address given in NSE Cash Application. The applicant’s signature should be at the end of the application)

In addition to above following, Documents required for Individual firms are:

Annexure III – Details of individual as on date of the application (Kindly fill in all the documents submitted by applicant along with individual signature.)

In Case of Sole Proprietorship Firms, following are required:

In addition to the above requirements for Individuals, Proprietary stamp required on all the documents submitted by the applicant.

These Documents also required for Partnership Firms:

A Copy of Partnership Deed Duly Certified by a C. A. / Notary along with membership/Notary Registration number.

Certificate from Registrar of Firms (ROF) duly certified by C. A / Notary along with membership/Notary Registration number.

Certified True Copy of Firm PAN Card required / Notary along with membership/Notary Registration number.

Annexure II (Sharing Pattern should be signed by all the Partners along with rubber stamp of that firm & duly certified by C. A / along with membership number.

Annexure III details of Partners as on (Kindly fill in all the details as required /duly certified by CA along with stamp and membership number, along with partnership firm stamp and signature of all the partners.

In addition to the above, following Documents also required for corporates:

A copy of MOA & AOA/ Form 32 (any change in Director’s list/Sharing pattern) should be submitted duly certified by a C.A/notary along with their Membership / Registration number. Certificate of incorporation should be submitted duly certified by a C.A / notary along with their Membership /Registration number.

Annexure E (On the Applicant’s letterhead – Board resolution signed by all the directors along with firm’s stamp duly certified by C. A along with the firm stamp.

Certified True Copy of Company PAN Card required by a C.A/notary along with their Membership /Registration number.

Annexure II (Sharing Pattern should be signed by all the Directors along with rubber stamp & duly certified by C. A / with membership number.

Annexure III details of directors as on (Kindly fill in all the details as required /duly certified by CA, along with stamp and membership number, along with partnership firm stamp and signature of all the partners.

Please refer all the Annexures mentioned above in the Back Office accordingly. Also the Sub‐broker registration checklist for Exchanges (MCX & NCDEX) is available in BO, i.e.

Back O ffice –‐‐‐‐‐‐ Utilities ‐‐‐‐‐‐‐‐‐ Research Report (Angel Research) ‐‐ ‐ Miscellaneous (Circulars) ‐‐‐ Sub‐broker Registration Folder ‐‐‐ BSE, NSE, MCX & NCDEX folders.

Sr.

Activity

Remisier and Sub‐Broker Registration

Purpose Status

Remarks

Scores

1

Maintain adequate stock of application forms depending upon past consumption/queries for given period, and intimate requisition of application forms to CSO well in advance.

2 Documentation:‐

a. Assist Client in filling up the registration form.

Ensure Clients have submitted all required Documentary evidences. b. (As per Annexure)

c. All the Proofs should be attested by CA/Notary.

d. CA signature should be always with his seal and Membership number.

Bank letter should be signed by the respective Branch Manager and e.

f.

g.

h.

i.

the applicant. CA Letter should be attested with his seal and his Membership number. All the minor details has to be filled up (e.g. signature of the applicant and date). MOU should be properly read by the SB and should be explained on each and every minor detail. All the check list has to be attached and constitution(individual/partnership/corporate) has to be mentioned.

j. Qualification proof has to be mentioned and proper proof is required.

Ensure relevant Branch Tag (hand written /rubber stamp) is on the 3

4

application form. Re‐check Doc to Ensure that application form is complete in all aspects before dispatching to CSO. In addition also ensure that the mandatory fields viz: 'Telephone Number', 'E‐mail Address', 'Pin Code', Residence & Office address, Trade name, Name of the applicant along with the date and 'Witness Details' have been filled up.

5 Follow up on CSO raised issues relating to customer documentation

On receipt of intimation from CSO of discrepancies/deficiencies in SB

or Remiser, obtain necessary documents/details from Client, promptly a.

b.

resolve and forward it to CSO. Maintain proper record for Objection case in Remiser or Sub‐Broker Registration. Follow up and clear objections in 5 calendar days for Remiser and in 15 calender days for Sub‐Broker.

6 On receipt of documents assist to understand the MOU & Tag Sheet.

Proper information has to be given to the Remiser/SB about the a. charges (VSAT and ODIN charges).

b. Brokerage Structure has to be cleared to all. In case client wants to submit the application to reclaim the ST assist them to fill up and ensure about the TAX claculation. All the Segment should be filled up separately. Chalan Copy, Name of the Applicant

c. and signature of the authorized person from Branch is required.

7 Sub‐ broker tags

Encourage Sub‐brokers tagged under the Branch, to deal with the

b. 8

Branch for any issues and not directly with the CSO.

On receipt of intimation that the Sub‐Broker has been registered, Check that SB details are correct and informed accordingly.

Walk‐ins

To

give

9 10

Walk in Client’s (new) Desk/Conf. Room

SB Registration Forms Dispatching Forms & Documents for Sub‐Broker/Remisier registration to CSO

presentation s to new clients Completely filled & Documents verified

11

Sub‐Broker Registration Forms

Information

Print outs of the formats of Sub‐Broker Registration

Information about the Documents to the new clients

Walk in Clients

Dispatch

Log to be maintained for all printed stationery, the requisition for the same should be placed well in advance.

For In‐house clients A proper Excel sheet should be maintained for the

12 POD’s for the documents 13 Branch Process Manual/Sub‐Broker Manual

14 Sub‐Broker/Remiser in Circulars/Websites and CSO Circulars

Welcome Letter/Tag Approval Sheet needs to be sent to all the Sub‐

Entries of sent or dispatched dcocuments & POD’s received.

SB Registration In Back

Office Daily Basis

Happening/ 15

16

Brokers

CSO Assigned Person/E‐Mail Id for the queries to CSO

([email protected])/E‐Mail Id for the queries to CSO for billing related ([email protected])

Not CSO

Person/E‐ mail

Confirmation Separate

and Relevant

17 Check List for all the segments

Process Training/ Test/Test Score/Induction/Test/NCFM Certified/Back

Check List CSO/RO

and Name of 18 Up of the Process the Person

Happening/ 19 Scanning of all the proofs/forms

20 Chalan Sheet with Service Tax reclaim sheet/Tax Sheet Calculation

Helplines:

Not

Aware/Not

Contact Person

Designation Location

Tel no – Extn

Pushpa Kotian

Sameer Kadam

Executive

Executive

Premier House

Premier House

40353100 ext 141

40353100 ext 142

Mr. Sounak Banerjee Manager‐QA PremierHouse 02240358600 – 288

CHAPTER – IV KYC

1.

Introduction

CHAPTER COVERAGE

2.

3.

4.

5.

6.

7.

8.

9.

KYC – First point of contact for customer delight.

KYC processes at Angel (CSO)

Documents required

Important points to be remembered ?

Important links used for KYC

Checklist of Documents Required for Opening Demat Account

Checklist of Documents Required for Opening Trading Account

Checklist of Documents Required for Opening Commodities Account

10. KYC checklist

1. Introduction

Know Your Client, popularly known as KYC, is a process mandated by SEBI

which basically relates to carrying out due diligence by the Stock/Commodity

brokers and/or DP participants, while opening up any new account.

Whenever any entity wants to open a new account, various details like name, address, financial details, bank account details etc. are required to be furnished and the documentary proof in respect of such details is also required.

2. KYC – First point of contact for customer delight

With the main focus on Quality Assurance at Angel, and in the quest to provide

Service Truly Personalized leading to Customer Delight for all clients and the

investors, this Branch Manual includes brief details of KYC and requirements

of documentation for the same, and is designed to help all our Branches.

It is expected that this content, besides providing preliminary guidelines, would reduce the objections in the KYC applications at CSO. Thus, it would lead to administrative convenience and faster service to the clients associated with Angel, which in turn will result in Customer Delight at from the first point of contact.

3. KYC processes at Angel (CSO):

Receipt of the KYC given to branches: On an average, 750 forms are received every day

by the KYC department. Here the name of client, branch and sub‐broker information is first

entered in the server from branch end and after the approval of CSO checker the same data

would be approved by CSO, so that the branches (at their end) can check that the forms are

received by the KYC department and approval of the inward entry done at CSO level.

Verification of Documents: The proofs submitted are matched with the information given by the client on the forms. If the information does not match, the registration form is put in objection.

Allotment of code: A specific and unique client code is selected according to norms of Angel and is written on the form. Here, the client can also mention any specific numbers he wants in his code.

Checking of the PAN number: The client code is generated on the server and

again the client information is verified. The PAN number is also checked with

the income‐tax site. If the details match, then the form is forwarded; otherwise it is put in objection.

Back Office Software: The client details are entered in the back office software.

Verification in back office: The back office data entry is again verified and approved to ensure if everything is correct.

Uploading on server: The client information is uploaded on the server and again an

approval is given only after the information is cross checked on the server. Here the information can be edited. Once the approval is given, no information can be edited after that.

Franking: The client’s form is then franked and details are filled in the form and checked. The franking charges (Rs100) are debited to the client’s account.

Scanning: Scanning and filling of all the documents and forms of the client is done and then kept in folders, which are arranged serial wise.

Documents required:

Note: Having a pan card is mandatory for all the a/c opening entities.

4.1. Checklist for individual clients – KYC

Permanent Address: (Note: Proof submitted by client must contain residential portion & the same should be legible & reflected on the form).

Valid Passport. Voter ID.

Valid Driving License. Bank Pass Book (with bank attestation & seal or on a bank letter head). Ration Card. Latest (two month) Telephone Bill. Latest (two month) Electricity Bill. Note: Letterhead of Employer

Address proof on employer’s letterhead is not a valid address proof.

In case of married women, Marriage Certificate & Old permanent address & Document in name of Husband (Driving License, Passport copy, previous year’s I.T return).

Correspondence address: (Note: Only correspondence address is not valid / permanent address should also be there) All the proofs mentioned in permanent address proofs are valid as correspondence address. Rent agreement ‐ Notarised Copy only for Correspondence.

Note: The above Proof of Address should be in the name of CLIENT ONLY

Bank proof:

Passbook should be printed with bank logo on it. If hand written, then bank stamp is required on it or /and cancel cheque with printed name & account number on it.

Demat proof: Client should be first holder in Demat a/c. Client Name, DP id & client id should be printed and visible with DP logo on it.

Important for DP KYC The DP KYC form should be filled up in CAPITAL letters only.

PAN Card must be compulsorily obtained for all categories of BO Accounts.

The account‐holder name should be same as in the PAN card. Please ensure that information like Telephone no, Pin code, Occupation, Category,

residential status, income details, date of birth, other broker details, e‐mail address

etc. are properly mentioned.

All the holders should sign across the photograph.

If there is any correction in the form, all holders should sign it.

Ensure all the holders sign in all the relevant places.

For details which are not relevant to a client, “N.A.” should be mentioned in DP KYC forms.

The witness signature should be there in a) POA agreement b) Client and DP agreement

c) Nomination form. The nominee details part of the form should be duly filled.

The first 2 pages of DP KYC forms should be photocopied and kept in a file for your record.

For HUF clients a) Karta stamp required with signature b) HUF agreement/Deed copy

c) Details of family members/coparceners

For Minor clients a) Birth certificate b) Proof of address and identity of guardian.

For NRI/NRO clients a) foreign address and RBI approval date b) Attested copy of PIS letter.

For Proof of Identity, either of following documents can be furnished a) Passport

b) PAN card with photograph c) Voters ID d) Driving License. Apart from this, branch

can consult the CSO for any other eligible/valid proof

For Proof of Residence, either of following documents can be furnished a) Passport

b) Voters ID c) Driving License d) Bank passbook e) Ration card f) Electricity or

Telephone bill (not more than 2 months old). Apart from this, branch can consult

the CSO for any other eligible/valid proof.

The identity of the person who intends to open a DP a/c needs to be verified in person

and a stamp stating ‘Identity verified in person’ needs to be affixed on the KYC form.

In case this activity is carried out by sub‐brokers / franchisees / business associates,

then an authorization letter needs to be issued to them.

POA (auto paying) agreement is mandatory in all types of account.

4.2. Checklist for individual clients: For opening DP a/c

The DP form should be filled up in CAPITAL letters only and black ink only Please ensure that information likes Telephone no, Pin code, Occupation, category,

residential status, income details, date of Birth, other bank details, e‐mail address

etc. is properly mentioned.

Ensure all the holders sign in all the relevant places on the DP form with black ink only.

For details which are not relevant to a client, ‘N.A.” should be mentioned in the DP forms.

The witness name, address, signature should be there in a) POA agreement b) Client DP agreement c) Nomination form.

The first 2 pages of DP forms should be photocopied and kept in a file for your record.

The account‐holder name should match with all the proofs provided.

4.3. Checklist for HUF client: For KYC and DP a/c opening

Photo copy of HUF PAN Card needed to open trading a/c in HUF status and

a PAN card copy of Karta is mandatory to open a HUF account. Rubber stamp required wherever signature appears. For HUF clients, HUF family Declaration is required along with the PAN card of Karta.

HUF status should be mentioned in the Bank & Demat A/C. POA (auto paying) agreement page should be duly signed by all the co‐parceners.

4.4. Checklist for partnership firms:

Copy of Partnership Deed.

Copy of Pan Card of Partnership Firm & all partners. Bank Statement of Partnership firm & Dominating Partner (51 % sharing). Demat Proof of Dominating Partner (Highest 51% Sharing) or joint account of Partners whose jointly holding should be more than 51%). Undertaking letter is required if the partner has the lowest percentage and wants to operate the partnership account e.g. C (in case A–50%, B–30%, C–20%),

Copy of Residence Proof of all partners along with photograph of all the partners. (Separate photo page for each segment). All Signature(s) of the Client must be sealed with the stamp of the Partnership Firm.

4.5. Checklist for proprietor:

Rubber stamp required where ever signature appears. BANK PROOF (Bank proof should be in the name of the firm). All other proofs & details same as individuals.

4.6. Checklist for a Limited Company: For opening KYC & DP

a/c

Copy of PAN card of the company.

PAN card copy + residence proof & Details of Promoters / Partners /Key managerial Personnel of the Company/Firm in specified format. Bank and Depository Account Details of company. Copies of the balance sheet for the last 2 financial years (copies of annual balance sheet to be submitted every year). Last two years IT returns (if the company is newly formed, then NETWORTH certificate of the company is required on original letterhead of the C.A. & it should be duly attested by C.A). Copy of latest share‐holding pattern including list of all those holding more than 5% in the share capital of the company, duly certified by the Company Secretary/ Whole time Director/MD (Copy of updated shareholding pattern to be submitted every year). Certified True Copies of the Memorandum and Articles of Association. If not as per MOA, form 32 is required. Copy of the Resolution of board of directors' approving participation in equity / derivatives / debt trading and naming authorized persons for dealing in securities. Photographs of Whole time directors / Authorized persons / individual promoters holding 5% or more, either directly or indirectly, in the shareholding of the company and of persons authorized to deal in securities.

If registered with any other broker, then the name of broker and concerned Stock exchange and Client Code Number.

NOTE: Attestation by MD/ Company Secretary ‐ In case of corporate account, Specimen Signatures of Authorized person appearing on Board Resolution as well as Annexure page should be duly attested by MD/ Company Secretary. DP Board resolution to contain authority ‐ The new DP Board resolution format to be obtained from the client in case of corporate account. The old DP board resolution format will not be valid from now on.

DP A/c:

BOARD RESOLUTION: Required on company letterhead with the same format

mentioned in Demat form.

4.7. Check list for NRIs: For KYC & DP a/c

Photocopy of PAN card copy is required.

Must have separate client codes for NRE A/C and NRO A/C of NRI clients.

For Proof of residence – Passport copy.

Copy of Power of Authority (POA) issued in favor of the person who will act

on behalf of NRI along with proof of identity of POA holder (if applicable). Demat Account proof. Local address for communication (if any).

For NRE/NRO clients a) foreign address and RBI approval date b) Compulsory PIS letter from bank.

Note: All the documents should be self‐attested by the client and stamped, wherever required.

and no NRI account will be opened without obtaining the PIS letter (Issued by the bank)

from the client.

5. Important points to be remembered

TRIPARTITE AGREEMENT ‐grey in colour ‐ at the end of the KYC form, and is to

be fill up by a registered sub broker only, & signed by the client & the sub broker.

Please ensure that information like telephone no, pin code, email address, occupation,

category, residential status, income details, date of birth, other bank details etc. is properly mentioned.

Please note: while filling up KYC form for any segment, ensure that the DATE field (apart from date of birth) is empty.

While sending client registration form to CSO, kindly ensure that all the segments of client registration form are kept together and are sent with a covering letter with all the details in it for each client. Ex: branch SB tag, client name, segments & sign of the KYC person of the branch.

Please do not dispatch any other document not related KYC with client registration form. Ex: client cheque, documents address for other departments. For changes in client details in the back office: please provide (last 2 months) clear, visible proof and it should be in client’s name only, and it should contain the client’s Branch and SB tag (stamp) including the client code.

It has been noticed that trades take place under the codes, which are not open in the respective segments. This creates a mismatch in the trade file and the updation gets delayed and is hampered by such codes. For instance the mismatch happens due to following reasons: • Punching error from the dealer’s end. • Account open in one segment and traded where not opened. Ex: A code is opened ONLY in BSE Cash but traded in Futures and Options. • No code exists at Angel but traded and/or the code is of another branch.

Note: Kindly follow up on an urgent basis so as to avoid any kind of errors regarding mismatch. General Stamp ‐ In case of Partnership or Proprietorship accounts, Client should not affix any rubber stamp of the Firm’s name on DP AOF. Affidavit ‐ In case of any kind of name mismatches, affidavit would not be accepted. Only an additional/alternate identity proof can be accepted for minor mismatch such as Pramita and Prameeta. In case of major mismatch in name such as Mina and Tina, both are two different names and in such case the document submitted has to be rectified. Agreement date ‐ Date should not be affixed on any agreement page of AOF. The same will be stamped at CSO only.

In person verification ‐ In‐person verification stamp of ABL employee should be affixed adjacent to the photograph in DP AOF.

6. Important links used for KYC

Back Office ‐ Branch / SB Login – RM link Homepage

6.1.KYC Manual ‐ for Branches / Sub‐Brokers / Channel Partners / Clients http://196.1.115.136/newangeltrade/vini/kyc/kyc_index.html (Exhibit.1, 2 &3)

Exhibit.1

Exhibit.2

Exhibit.3

6.2. KYC Received – to track the status of the new clients’ KYC registration forms at CSO. (Exhibit.4) Exhibit.4

6.3 KYC Details – to track the status of client registration forms after the process at CSO. (Exhibit.5)

Exhibit.5

6.4. Welcome Kit – to track the status of the Welcome Kit of each new

registered client. (Exhibits 6 & 7)

Exhibit.6

Exhibit.7

To do list for Branches

Maintain adequate stock of blank KYC forms, depending upon past consumption/client

accounts opened for given period, and intimate requisition of blank KYC to CSO well

in advance.

Assist Client in filling up KYC.

Ensure Clients have submitted all required Documentary evidences. (As per Annexure)

Verify copies of Documents received with their Originals, and put ‘Verified with Original’ along with ‘Identity Verified In‐Person Stamp on copies For In‐Person Verification.

Ensure relevant Sub‐broker Tag (hand written /rubber stamp) is on KYC.

Ensure that KYC is complete in all aspects before dispatching to CSO. In addition, also ensure that the non‐mandatory fields viz: ‘Telephone Number’, ‘E‐mail Address’, ‘Pin Code’, and ‘Witness Details’ have been filled up.

Maintain proper record of KYC received from Client and submitted to CSO. Also scan or file hard copies of the KYC (first two pages only).

Prepare Covering Letter for KYCs to be submitted to CSO. (As per Annexure) Courier KYC along with Covering letter to CSO.

File Acknowledgement Copy of Covering letter received from CSO.

On receipt of intimation from CSO of discrepancies/deficiencies in KYC, obtain necessary documents/details from Client promptly resolve & forward it to CSO.

Maintain proper record for Objection cases from KYCs. Follow up & clear objections in 7 calendar days.

On receipt of undelivered Welcome Kit from CSO, hand over the same to clients, and forward correct/complete address of client, as applicable, to the CSO.

Obtain relevant Documentary Proofs from Clients for any changes to be made in the Client’s account. Forward the details & documents to CSO.

On receipt of Mismatch File from CSO at 12:30, 2:30, and 3:30 pm, immediate action should be taken and necessary correction should be made on the relevant Terminal. To ensure this; a Dealer should be present to make the corrections right up to 4:15 pm.

In case client has account in one exchange, but has traded on another exchange, on receipt of Franked KYC from CSO, get KYC duly filled, and submit the same to CSO as soon as possible.

Ensure Sub‐brokers have Tag before opening client accounts on behalf of the Sub‐brokers. Shifting of direct Clients to Sub‐broker later on is not allowed.

Encourage Clients/Sub‐brokers tagged under the Branch, to deal with the Branch for any KYC related issues and not directly with the CSO.

On receipt of intimation that the Client’s account has been opened, Check that Client details are correct as entered into the system through ‘Utilities’ option in Back office and intimate any discrepancies to the CSO.

To, Date: ________________ Angel Broking (KYC Department) G‐1, Akruti Trade Centre, Road No‐7, MIDC, Andheri (E), Mumbai – 400 093 Dear Sir, Subject: KYCs submitted for A/c Opening With reference to the captioned subject, enclosed herewith are KYCs for the following Clients:

Sr. No

Client Name

Exchange ( )BSE NSE MCX NCDEX

Total

Yours faithfully, For Signature

7. Checklist of Documents Required for opening trading A/C

Documents Required Client Type

Individual Firms/ Corporate

(Partner / Director in case of Non Individuals) I) Identity cum Address Proof Passport Voter's ID Driving License Documents issued by Statutory or Regulatory Authorities/ Banks /Financial Institutes/ Affiliated Colleges/ Professional Bodies/ Central and state Government II) Identity Proof Pan Card SEBI MAPIN Card Photo ID issued by Employer under MAPIN III) Address Proof Ration Card Bank Pass Book with address Flat Maintenance Bill Latest Electricity/Telephone Bills (not more than 2 months old) Insurance Policy Rent Agreement Certificate Issued by Employer under MAPIN IV) Additional Documents for Firm/Corporate Annual reports for last two financial years (copy of annual balancesheet to be submitted every year) Partnership Deed Latest share holding pattern including list of all those holdings morethan 5% of share capital of companies certified by Company Secretary / Director / MD (to be submitted annually) Board Resolution MOA & AOA/ Partnership Deed Photograph of partners/Whole time directors/ Authorized person/Promoters holding 5% or more in the share capital of the Company Bank and Depository Account Details If registered with any other broker, then the name of broker andconcerned Stock exchange and Client Code Number. Details of Promoters/Partners/Key managerial Personnel of theCompany/Firm in specified format. Unique Identification Number (wherever applicable) Name, address of the Company/Firm Registration number (with ROC, SEBI or any government authority) Note A: If client submits any one document listed in list I, the client is not required to submit anyDocuments listed in II or III.

Note B: The client must submit all relevant documents checked in list IV according to his beneficiary type.

8. Checklist of documents required for opening commodities A/C

Documents Required

NCDEX MCX

Beneficiary Type Beneficiary Type

Individual

Firms /

Corporate Individual

Firms /

Corporate

I)Compulsory documents to be enclosed

Passport

Pan Card

Letter from Banker

Demat statement

Three photographs

Salary Slip

Ration Card

II) Proofs to be enclosed

MCX‐ any one proof

NCDEX‐ any two proof

(Partner / Director in case of Non Individuals)

Passport

Voters Id

Driving License

Ration Card

Income Tax Return

III) Additional Enclosures for Firm/ Corporate

(Compulsory documents to be enclosed)

Board Resolution

MOA & AOA/ Partnership Deed

Annual reports for last three financial years

Annual reports for last two financial years

Income Tax Returns for last three years

Income Tax Returns for last two years

Networth Certificate by Chartered Accountant

Valuers Certificate (in case of immovable property)

KYC Checklist

Sr. Activity Weightage Score Grade ‐ 0 Remarks

1 NSE & BSE Trading account form Verification 15 0

a

Ensure Clients have submitted all required Documentary evidences. (As per Annexure) & form is complete in all

respects (Tele No, Mob No., valid Email ID, Pin code, A/C opening cheque, Signature Verification & witness details)

(Link: 196.1.115.150> Risk Management>KYC>Support>KYC Manual)

4

b

Verify copies of Documents received against Originals, and the 'Verified with Original' stamp is affixed on required proofs

by an employee….Ref - KYC Manual 2

c Ensure relevant Branch/Sub-broker Tag (hand written

/rubber stamp) is on KYC form 2

d

In-person Verification by an Angel employee along with employee code, name and signature (ABL - BSE forms &

ACDL - NSE forms)…….Ref - KYC Manual 5

e

Maintain adequate stock of blank KYC depending upon past consumption/client accounts opened for given period, and intimate requisition of blank KYC to CSO well in advance.

2

2 Necessary Activities 15

a

Ensure the inward entry is done (with the relevant columns ticked) before dispatching the forms along with the

documents to CSO (Link: 196.1.115.150> Risk Management>KYC>Inward

Entry>KYC Inward)

2

b

Account modification needs to be done with the relevant account modification letter duly signed by the client (as per

the circular) Ref - KYC Manual 2

c

Relevant formats are being attached along with the forms (e.g NCDEX Declaration cum confirmation letter, name

confirmation letter etc.) Ref - KYC Manual 3

d

Data entry is being done in BO and the data entry number should be written on the forms

(Link: 196.1.115.150 > Angel broking ltd.>Utilities>Branch_Client_Master_Entry>Client Master

Module (Test)

3

e Mandatory for NRI client - PIS and POA in demat account (no

intraday, commodities and FNO transaction as of now) 5

3 Demat account opening form Verification 15 0

a

BO account is opened on the basis of an account opening form duly filled in all respect, which is verified by the collection centre / branch executive. Critical areas

mentioned below. (Refer entire checklist for DP KYC) The details which are not relevant to a client, N.A." should be

mentioned in DP KYC forms...Ref - KYC Manual

5

b

An authorized official (ABL employee sign) of the DP at collection centre shall put the 'verified with original' stamp

on the DP KYC form after verification with the original document & sign the same along with the relevant employee

code….Ref - KYC Manual

2

c

PAN Card must be compulsorily obtained for all categories of BO Accounts. The account holder name should be same as in PAN card. The PAN number and Pan Card holder name is

verified with the IT site and then only further process of account opening takes place in the back office system...Ref -

KYC Manual

1

d In-person verification done for all the accounts opened in the

branch by an Angel ABL employee 2

e Account Opening Cheque 5

4 CSO feed Back 5 0

a

On receipt of intimation from CSO of discrepancies/deficiencies in KYC, obtain necessary

documents/details from Client, promptly resolve and forward it to CSO.

1

b

Grade obtained in Daily/Monthly MIS of objection report and the objection percentage

(from [email protected]) 3

c KYC Forms & Printing Stationary & MIS to be maintained for

client and blank forms 1

5 Follow Up 10 0

a

Maintain proper record for Objection cases from KYC. Follow up and clear objections in 8 calendar days. On receipt of Mismatch File from CSO at 12:30, 2:30, and 3:30 pm,

immediate action should be taken and necessary correction should be made on the relevant segment

5

b

In case client has account in one exchange, but has traded on another exchange, on receipt of Franked KYC from CSO,

get KYC form duly filled, and submit the same to CSO as soon as possible. To ensure this, KYC executive should do

the needful to do the correction

5

6 Sub- broker and Client tags 2 0

a Ensure Sub-brokers have Tag before opening client accounts

on behalf of the Sub-brokers. Shifting of direct Clients to Sub-broker later on is not allowed

1

b Encourage Clients/Sub-brokers tagged under the Branch, to

deal with the Branch for any KYC related issues and not directly with the CSO

1

7 Important Links to be checked 5 0

a

Important Links to be checked on daily basis - 1) ECN - (Link: 196.1.115.150> ECN>Reports>Contract Note) 2) DP charges (AMC) - (Link: 196.1.115.150 >D.P.>Reports > Ledger/Bill Info) 3) Account Opening Details - (Link: 196.1.115.150 > KYC > Status Report > A/C opening Details) 4) KYC received - (Link: 196.1.115.150 > KYC > Status Report > KYC received) 5) Scan Images - (Link: 196.1.115.150 > KYC > Client Info > Scan Images)

5 0

8 Direct clients 5 0

a Assist to understand the KYC process/ required

documentation for direct(walk in Client’s -new) in a Desk/Conf. Room

2

b ECN Promotion and Updation 3 0

9 MIS and Register maintenance 5

a MIS of form received from clients and dispatched to CSO along with blank form details to be maintained & relevant

registers maintained at the branch 5

10 Others 23 0

a KYC Manual (KYC & Marketing Executives)...Ref - KYC Manual 2

b Training & Online test scores 2

c

Welcome kit link needs to be checked (After the client code generation)

(Link: 196.1.115.150 > KYC > Status Report > Welcome Kit) 2

d Websites and Circulars/CSO Assigned Person/E-Mail Id for queries ([email protected] and [email protected])

2

NCFM Certification as per HR policy 1

e Relevant Stamps as per the compliance requirement 5

f KYC training provided to SB's/Usage of back office utilities

and reports 5

g Commodities confirmation Letter & Brokerage Calculation 3

h Understanding of the KYC checklist 1

TOTAL 100 0

Grades Scores A + 90 to 100 A 80 to 89 B+ 70 to 79 B 60 to 69 C 51 < 59

D <50

Helplines

Contact Person Designation Location Tel no ‐ Ext

Ms. Pramita Poojary Sr. Manager V Mall (022) 3083 7400 ‐ 488

Mr. Deepak Redekar Manager ‐ KYC V Mall (022) 3083 7400 ‐ 423

Mr. Subodh Salvi Asst. Manager ‐ KYC V Mall (022) 3083 7400 ‐ 444

Mr. Sounak Banerjee Manager – QA Premier (022) 40358600 ‐ 288

CHAPTER – V Dealing

CHAPTER COVERAGE

1. Introduction

2. Risk & Dealing

3. Dealer: Pre‐Market Activity

4. Dealer: Market Activity

5. Dealer: Post Market Activity

6. Other activities

7. Dealers Call Evaluation Process

8. Basics of Stock Market

9. Securities :‐ (a) Regulator (b) Participants

10. Secondary Market :‐ (a) Stock Exchange (b) Stock Trading

11. Products in the Secondary Markets

12. Products and Services we offer at Angel

13. Derivatives

14. Miscellaneous :‐ (a) Corporate Actions (b) Index (c) Clearing & Settlement and Redressal (d) Auction Procedure

15. Dealing BPS Checklist

Introduction

The scenario of dealing has changed in recent times. Earlier it was mere the execution of trades, but recent changes mean not just execution but also advising the clients

At Angel, there are two basic software for dealing : i) ODIN – Open Dealer Integrated Network

ii) NEAT ‐ National Exchange for Automated Trading

2. Risk & Dealing

As all are aware that risk and dealing go hand in hand because equity as an Asset class have the highest risk reward ratio so identifying, monitoring and Keeping control over day to day dealing activities acquires more significance.

Branch to continuously monitor the trading account of the client and ascertain risk, and give periodical follow‐up calls for the recovery of dues (including margins, M to M, VAR etc)

While allowing positions/exposure, the deposit, net worth etc must be kept in mind

Orders for trade should be accepted from clients or authorized persons only. Requisite authority letter for this has to be obtained, in advance

For illiquid options, dealers and sub brokers to take care and not entertain unrealistic prices

Before executing any trade, client positions/margins etc need to be checked

Caution to be exercised by dealers for any order for illiquid scrip

Branch should avoid any unfair trade practice as defined in Unfair trade practices regulations

Upon execution of trades, confirmation to be given to the client immediately after market hours. The telephonic‐conversations relating to trade confirmations should be recorded and preserved carefully for future reference

Any request for code‐change should be critically examined. To be monitored by branch heads personally. In BSE, the erroneous client codes can be changed at the BOLT itself in the post‐closing session. In NSE CASH (whether ODIN users OR NEAT users Any changes have to be made by informing in the back office as changes are NOT ALLOWED at the terminal end. But in NSE FO (ONLY ODIN TERMINAL users) the changes have to be done only by coordinating with CSO team. NEAT TERMINAL users can change the codes from their end respectively informing CSO regarding the same.

3. Dealer: Pre‐Market Activity

Reporting to branch at 9.00 A.M

Punctuality about report time has to be maintained at all times

All dealers has to be present in morning meet along with risk management person available at branch who will inform the dealers beforehand about the clients who are in pure risk or projected risk on a daily basis compulsorily so that risk is controlled and kept under check by continuous monitoring and morning meet has to happen between 9.15 A.M to 9.30 A.M on a daily basis on all trading days

Downloading of NSE/F&O files from common site (http:// 196.1.115.1/common see Exhibit :1) in C drive of the PC

Exhibit: 1 Downloading files from common site for NSE Cash & F&O

Delete the old files of previous day from C drive or overwrite them with the new downloaded files and login to the systems by 9.30 A.M using User Id and password

Market watch will appear as shown in Exhibit :2

Exhibit: 2 Market watch of NSE Cash & F&O

Similarly downloading of BSE files from common site for ODIN login (http:// 196.1.115.1/common/ODIN/Odin Ver 7 see Exhibit :3) in C:/ODINNSEBSEMCXNCDEX/Client/Masters folder of the PC

Exhibit: 3 Downloading files from common site for BSE ODIN

ODIN is the only system which is developed by Financial technologies in which all the four segments NSE Cash/F&O BSE Cash and Commodities can be traded. The masters7ver.zip file has to be downloaded daily and extracted in Masters folder for the same to be done

Overwrite the old files of previous day from Masters folder with the new downloaded files and login to the systems by 9.30 A.M using User Id and password

Exhibit: 4 Market watch of ODIN

Positional calls, Long term calls as advised by research team are to be informed to the client by any mode of communication (e‐mail, messenger, phone, etc) between 9.35 A.M to 9.50 A.M proactively

4. Dealer: Market Activity

Dealing (9.55 A.M TO 3.30 P.M)

Dealers should ideally have an excel sheet where they should a priority to which client has the potential of giving business on a regular basis and they should promote the angel positional calls to them during trading hours proactively

Phone etiquette skills has to be maintained by mentioning dealer name whenever any dealer picks up the phone (Ex :Vijay, Priti, etc) and Scrip, price, quantity and trading code has to confirmed by the dealer before execution of any trade

Energy level during market hours has to be very good at all times irrespective of any market condition or other factors

Dealers should have good hold of risk management practices and they should ideally keep track of their priority and day trading clients debit/credit position on a daily basis for they are the biggest revenue generators for us and they should be provided with the best possible service by us

Cordial relation has to be maintained with day traders as well as clients who are trading on the phone at all times

Politeness, salutation, greetings over phone to the client will add extra flavor during trading hours and client will feel delighted irrespective of market conditions

At no point should a dealer lose one’s cool during market hours and should have a through professional approach over handling clients

Trade confirmation during trading hours is essential and has to be given at all times especially for pending limit orders buy/sell compulsorily


Dealers will compulsorily confirm trade confirmations for the day to each and every client who has executed any trade for the day on any terminal on a recorded line

Dealers should ideally be reading business newspapers on a daily basis and going through market news which happened during the day at the end of the day to keep themselves updated in case of any customer queries

Dealers should have good hold over settlement and NSE/BSE settlement number for the week should be displayed in the branch at the beginning of the week itself by printout or written on whiteboard distinctly and clearly

Dealers should be always update on Auction details ,Ex‐Rights record date, Dividend record date ,bonus record date etc basically corporate actions of existing companies for quick and promt reply to customer queries

Dealers should always keep oneself updated about other products like mutual funds, personal loans, insurance etc and promote the same to prospective clients for cross selling of different products

Dealers should keep updating themselves about new market tools like Falcon and utilize the services of the same during market hours to service the client in the best possible way

The use of CRMS software should be utilized by all dealers and it should be used more proactively to show the desired results

If any dealer is not having NCFM certification in any particular segment he/she should clear the exam at the earliest for self improvement as well as better understanding of market

A dealer who is dealing into equities must at least clear NCFM Cash and F&O module and BSE Cash module and subsequently get himself NCFM certified in Commodities segment as well

6. Other activities

Contract notes are to be issued to the client within 24 hours of the trade

Collection of cheques segment wise (verifying if third party, chq bouncing cases) is a continuous process and should be given due importance specially for clients who are trading on a continuous basis and a procedure of receiving the cheque on a T+2 should be maintained for the same

Squaring‐off process, where collections are not coming, must be adhered to and where clients are maintaining a running account, it should reach zero level periodically and proper monitoring is required for the same

Payout of cheques are to be done after checking clients risk and position and similarly after cheque collection the securities are required to be delivered within 24 hours after the same is received from the exchange to the clients beneficiary account

7. Dealers Call Evaluation Process

Main Objective – To standardize dealer services in all branches

Improvement Areas – (i) Process knowledge of dealers (ii) Communication skills

(iii) Clarity and accuracy in communication

Goal statement – To maximize the accuracy of trades executed via Dealer terminals and providing client best trade

Services

Project benefits – (i) Prompt dealing service (ii) Standardized service across all branches

(iii) Timely process updates via periodic trainings to

Streamline gaps identified

(iv) Reduction in complaints due to 100% call

Recording at Dealer’s end

(v) Identifying process loop holes & effective

Feedback mechanism

(vi) Attain customer delight

8. Basics of Stock Market

What is meant by a Stock Exchange?

The Securities Contract (Regulation) Act, 1956 [SCRA] defines ‘Stock Exchange’ as any body of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities. Stock exchange could be a regional stock exchange whose area of operation/jurisdiction is specified at the time of its recognition or national exchanges, which are permitted to have nationwide trading since inception. NSE was incorporated as a national stock exchange.

What is an ‘Equity’/Share?

Total equity capital of a company is divided into equal units of small denominations, each called a share. For example, in a company the total equity capital of Rs. 2,00,00,000 is divided into 20,00,000 units of Rs. 10 each. Each such unit of Rs. 10 is called a Share. Thus, the company then is said to have 20,00,000 equity shares of Rs. 10 each. The holders of such shares are members of the company and have voting rights.

What is a ‘Debt Instrument’?

Debt instrument represents a contract whereby one party lends money to another on pre‐determined terms with regards to rate and periodicity of interest, repayment of principal amount by the borrower to the lender. In the Indian securities markets, the term ‘bond’ is used for debt instruments issued by the Central and State governments and public sector organizations and the term ‘debenture’ is used for instruments issued by private corporate sector.

What is a Derivative?

Derivative is a product whose value is derived from the value of one or more basic variables, called underlying. The underlying asset can be equity, index, foreign exchange (forex), commodity or any other asset. Derivative products initially emerged as hedging devices against fluctuations in commodity prices and commodity‐linked derivatives remained the sole form of such products for almost three hundred years. The financial derivatives came into spotlight in post‐1970 period due to growing instability in the financial markets. However, since their emergence, these products have become very popular and by 1990s, they accounted for about two thirds of total transactions in derivative products.

What is a Mutual Fund?

A Mutual Fund is a body corporate registered with SEBI (Securities Exchange Board of India) that pools money from individuals/corporate investors and invests the same in a variety of different financial instruments or securities such as equity shares, Government securities, Bonds, debentures etc. Mutual funds can thus be considered as financial intermediaries in the investment business that collect funds from the public and invest on behalf of the investors. Mutual funds issue units to the investors. The appreciation of the portfolio or securities in which the mutual fund has invested the money leads to an appreciation in the value of the units held by investors. The investment objectives outlined by a Mutual Fund in its prospectus are binding on the Mutual Fund scheme.

The investment objectives specify the class of securities a Mutual Fund can invest in. Mutual Funds invest in various asset classes like equity, bonds, debentures, commercial paper and government securities. The schemes offered by mutual funds vary from fund to fund. Some are pure equity schemes; others are a mix of equity and bonds. Investors are also given the option of getting dividends, which are declared periodically by the mutual fund, or to participate only in the capital appreciation of the scheme.

What is an Index?

An Index shows how a specified portfolio of share prices is moving in order to give an indication of market trends. It is a basket of securities and the average price movement of the basket of securities indicates the index movement, whether upwards or downwards.

What is a Depository?

A depository is like a bank wherein the deposits are securities (viz. shares, debentures, bonds, government securities, units etc.) in electronic form. There are two main Depositories in India namely Central Depository Services Limited (CDSL) & National Securities Depository Limited (NSDL). Angel Broking Ltd. Is a Depository Participant registered with CDSL.

What is Dematerialization?

Dematerialization is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited to the investor’s account with his Depository Participant (DP).

What are the segments of Securities Market?

The securities market has two interdependent segments: the primary (new issues) market and the secondary market. The primary market provides the channel for sale of new securities while the secondary market deals in securities previously issued.

9. Securities

What is meant by ‘Securities’?

The definition of ‘Securities’ as per the Securities Contracts Regulation Act (SCRA), 1956, includes instruments such as shares, bonds, scrips, stocks or other marketable securities of similar nature in or of any incorporate company or body corporate, government securities, derivatives of securities, units of collective investment scheme, interest and rights in securities, security receipt or any other instruments so declared by the Central Government.

What is the function of Securities Market?

Securities Markets is a place where buyers and sellers of securities can enter into transactions to purchase and sell shares, bonds, debentures etc. Further, it performs an important role of enabling corporates, entrepreneurs to raise resources for their companies and business ventures through public issues.

Transfer of resources from those having idle resources (investors) to others who have a need for them (corporates) is most efficiently achieved through the securities market. Stated formally, securities markets provide channels for reallocation of savings to investments and entrepreneurship. Savings are linked to investments by a variety of intermediaries, through a range of financial products, called ‘Securities’.

Which are the securities one can invest in?

Shares Government Securities Derivative products Units of Mutual Funds etc., are some of the securities investors in the securities market can invest in.

9.1 Regulator

Why does Securities Market need Regulators?

The absence of conditions of perfect competition in the securities market makes the role of the Regulator extremely important. The regulator ensures that the market participants behave in a desired manner so that securities market continues to be a major source of finance for corporate and government and the interest of investors are protected.

Who regulates the Securities Market?

The responsibility for regulating the securities market is shared by Department of Economic Affairs (DEA), Department of Company Affairs (DCA), Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI).

What is SEBI and what is its role?

The Securities and Exchange Board of India (SEBI) is the regulatory authority in India established under Section 3 of SEBI Act, 1992. SEBI Act, 1992 provides for establishment of Securities and Exchange Board of India (SEBI) with statutory powers for (a) protecting the interests of investors in securities (b) promoting the development of the securities market and (c) regulating the securities market. Its regulatory jurisdiction extends over corporate in the issuance of capital and transfer of securities, in addition to all intermediaries and persons associated with securities market. SEBI has been obligated to perform the aforesaid functions by such measures as it thinks fit. In particular, it has powers for:

Regulating the business in stock exchanges and any other securities markets Registering and regulating the working of stock brokers, sub–brokers etc. Promoting and regulating self‐regulatory organizations Prohibiting fraudulent and unfair trade practices Calling for information from, undertaking inspection, conducting inquiries and audits of the stock exchanges, intermediaries, self –regulatory organizations, mutual funds and other persons associated with the securities market.

9.2 Participants

Who are the participants in the Securities Market?

The securities market essentially has three categories of participants, namely, the issuers of securities, investors in securities and the intermediaries, such as merchant bankers, brokers etc. While the corporates and government raise resources from the securities market to meet their

obligations, it is households that invest their savings in the securities market.

Is it necessary to transact through an intermediary?

Intermediaries have primarily set up to cater to the large investor base. It is advisable to conduct transactions through an intermediary. For example an investor needs to transact through a trading member of a stock exchange if an investor intend to buy or sell any security on stock exchanges. An investor need to maintain an account with a depository if an investor intend to hold securities in demat form. An investor need to deposit money with a banker to an issue if an investor are subscribing to public issues. An investor gets guidance if an investor are transacting through an intermediary. Chose a SEBI registered intermediary, as he is accountable for its activities. The list of registered intermediaries is available with exchanges, industry associations etc.

Who is a Main Broker?

A main broker is an intermediary of the Stock Exchange. A main broker is required to hold a registration certificate issued by SEBI. A broker's registration number begins with the letters ‘INB’

What is a Branch?

Participants in Securities

Market

Issuers of Securities

Investors in Securities

Intermediaries

Main Broker

e.g. Angel

Sub-Broker

Remisier

Retail Institutions

Individuals / HUFs /

Partnerships

Corporates

Limited Companies

Listed

To be Listed after Initial

Public Offering

A Franchisee is a business unit which operates its business under the name of the main broker They are on a profit sharing basis with us. At Angel, Franchisees are also referred to as Business Partners.

What is a Franchisee Branch?

A Franchisee is a business unit which operates its business under the name of the main broker. Sub‐broker is a sub‐intermediary of the Main Broker. He too is required to hold a registration certificate issued by SEBI. A sub‐broker's registration number begins with the letters ‘INS’. At Angel he is also referred to as a Business Associate or a Channel Partner.

Who is a Sub‐Broker / Remisier?

A sub‐broker is a sub‐intermediary of the Main Broker. He too is required to hold a registration certificate issued by SEBI. A sub‐broker's registration number begins with the letters ‘INS’. They are on a revenue sharing basis with us. At Angel they are also referred to as a Business Associates or a Channel Partner.

What is the difference between a Sub‐broker & a Remisier?

A Sub‐Broker is one who can be allotted a terminal(s) in his name, whereas a remisier cannot be allotted a terminal and has to operate from our Branches / Franchisees. The revenue sharing percentage is lesser for a remisier as compared to a Sub‐broker.

What is our organization structure?

Angel Broking is a main Broker having several own Branches / Franchisee Branches under its umbrella. Angel Clients may be operating directly from the Branches / Franchisee Branches or may be attached to sub‐intermediaries like Sub‐Brokers / Remisiers. The Head Office of Angel Broking, located at Mumbai is known as the “Central Support Office (CSO)”

10. SECONDARY MARKET

Introduction

What is meant by Secondary market?

Secondary market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. Majority of the trading is done in the secondary market. Secondary market comprises of equity markets and the debt markets.

What is the role of the Secondary Market?

For the general investor, the secondary market provides an efficient platform for trading of his securities. For the management of the company, Secondary equity markets serve as a monitoring and control conduit—by facilitating value‐enhancing control activities, enabling implementation of incentive‐based management contracts, and aggregating information (via price discovery) that guides management decisions.

What is the difference between the Primary Market and the Secondary Market?

In the primary market, securities are offered to public for subscription for the purpose of raising capital or fund. Secondary market is an equity trading venue in which already existing/pre‐issued securities are traded among investors. Secondary market could be either auction or dealer market. While stock exchange is the part of an auction market, Over‐the‐Counter (OTC) is a part of the dealer market.

10.1 Stock Exchange

What is the role of a Stock Exchange in buying and selling shares?

The stock exchanges in India, under the overall supervision of the regulatory authority, the Securities and Exchange Board of India (SEBI), provide a trading platform, where buyers and sellers can meet to transact in securities. The trading platform provided by NSE is an electronic one and there is no need for buyers and sellers to meet at a physical location to trade. They can trade through the computerized trading screens available with the NSE trading members or the internet based trading facility provided by the trading members of NSE.

What is Demutualization of stock exchanges?

Demutualization refers to the legal structure of an exchange whereby the ownership, the management and the trading rights at the exchange are segregated from one another.

How is a demutualised exchange different from a mutual exchange?

In a mutual exchange, the three functions of ownership, management and trading are concentrated into a single Group. Here, the broker members of the exchange are both the owners and the traders on the exchange and they further manage the exchange as well. This at times can lead to conflicts of interest in decision making.

A demutualised exchange, on the other hand, has all these three functions clearly segregated, i.e. the ownership, management and trading are in separate hands.

Currently are there any demutualised stock exchanges in India?

Currently, two stock exchanges in India, the National Stock Exchange (NSE) and Over the Counter Exchange of India (OTCEI) are demutualised.

Angel is a member of which stock exchanges?

Angel is a member of The Stock Exchange, Mumbai (BSE), and National Stock Exchange (NSE) for the Equity & Derivatives Segment. Angel is also a member of the NSE’s Commodity Exchange (NCDEX) & Multi Commodity Exchange.

10.2 Stock Trading

What is Screen Based Trading?

The trading on stock exchanges in India used to take place through open outcry without use of information technology for immediate matching or recording of trades. This was time consuming and inefficient. This imposed

limits on trading volumes and efficiency. In order to provide efficiency, liquidity and transparency, NSE introduced a nationwide, on‐line, fully automated screen based trading system (SBTS) where a member can punch into the computer the quantities of a security and the price at which he would like to transact, and the transaction is executed as soon as a matching sale or buy order from a counter party is found.

What is BOLT?

BSE’s On‐Line Trading (BOLT) is a software which is given by BSE to the members of the BSE exchange. Bolt software is developed by CMC. The software gets connected with BSE through various connectivity like Lease line V‐SAT and ISDN (Back –up line).

Memberships

On

Exchanges

BSE

Angel Broking Ltd.

NSE

Angel Capital & Debt Market

NCDEX

Angel Commodities Broking (P) Ltd.

MCX

Angel Commodities Broking (P) Ltd.

Hot key functions in BOLT :

Bolt

F1 – login

F2 – Market Watch(touch line)

F3 – order entry

F4 – pending order

What is NEAT?

NSE is the first exchange in the world to use satellite communication technology for trading. Its trading system, called National Exchange for Automated Trading (NEAT), is a state of‐the‐art client server based application. At the server end all trading information is stored in an in memory database to achieve minimum response time and maximum system availability for users. It has uptime record of 99.7%. For all trades entered into NEAT system, there is uniform response time of less than one second.

Hot Key Functions in NEAT :

F1 – Buy

F2 – Sell

F3 – Pending

F6 ‐ Best Five

F8 ‐ Trades

What is ODIN?

Open Dealer Integrated Network (ODIN) is a product from financial technologies. It is a Computer To Computer Link (CTCL) network of terminal. It is an advanced network of linking multiple terminal to one master terminal through private network provided to branches, sub‐broker etc.

Hot key functions in ODIN :

F1 – Buy

F2 – Sell

F3 – Pending

F4 – Market watch

F5 – Best Five

F8 – Trades

How to place orders with the broker?

An investor may go to the broker’s office or place an order on the phone/internet or as defined in the Model Agreement, which every client needs to enter into with his or her broker.

How does an investor get access to internet based trading facility?

There are many brokers of the NSE who provide internet based trading facility to their clients. Internet based trading enables an investor to buy/sell securities through internet which can be accessed from a computer at the investor’s residence or anywhere else where the client can access the internet. Investors need to get in touch with an NSE broker providing this service to avail of internet based trading facility.

What is a Contract Note?

Contract Note is a confirmation of trades done on a particular day on behalf of the client by a trading member. It imposes a legally enforceable relationship between the client and the trading member with respect to purchase/sale and settlement of trades. It also helps to settle disputes/claims between the investor and the trading member. It is a prerequisite for filing a complaint or arbitration proceeding against the trading member in case of a dispute. A valid contract note should be in the prescribed form, contain the details of trades, stamped with requisite value and duly signed by the authorized signatory. Contract notes are kept in duplicate, the trading member and the client should keep one copy each. After verifying the details contained therein, the client keeps one copy and returns the second copy to the trading member duly acknowledged by him.

What details are required to be mentioned on the contract note issued by the stock broker?

A broker has to issue a contract note to clients for all transactions in the form specified by the stock exchange. The contract note inter‐alia should have following:

Name, address and SEBI Registration number of the Member broker. Name of partner/proprietor/Authorized Signatory. Dealing Office Address/Tel. No./Fax no., Code number of the member given by the Exchange.

Contract number, date of issue of contract note, settlement number and time period for settlement.

Constituent (Client) name/Code Number. Order number and order time corresponding to the trades. Trade number and Trade time. Quantity and kind of Security bought/sold by the client. Brokerage and Purchase/Sale rate. Service tax rates, Securities Transaction Tax and any other charges levied by the broker.

Appropriate stamps have to be affixed on the contract note or it is mentioned that the consolidated stamp duty is paid.

Signature of the Stock broker/Authorized Signatory.

What is the maximum brokerage that a broker can charge?

The maximum brokerage that can be charged by a broker from his clients as commission cannot be more than 2.5% of the value mentioned in the respective purchase or sale note.

Why should one trade on a recognized stock exchange only for buying/selling shares?

An investor does not get any protection if he trades outside a stock exchange. Trading at the exchange offers investors the best prices prevailing at the time in the market, lack of any counter‐party risk which is assumed by the clearing corporation, access to investor grievance and redressal mechanism of stock exchanges, protection up to a prescribed limit, from the Investor Protection Fund etc.

11. Products in the Secondary Markets

What are the products dealt in the Secondary Markets?

Following are the main financial products/instruments dealt in the Secondary market which may be divided broadly into Shares and Bonds:

Shares:

Equity Shares : An equity share, commonly referred to as ordinary share, represents the form of fractional ownership in a business venture.

Rights Issue/ Rights Shares : The issue of new securities to existing shareholders at a ratio to those already held, at a price. For e.g. a 2:3 rights issue at Rs. 125, would entitle a shareholder to receive 2 shares for every 3 shares held at a price of Rs. 125 per share.

Bonus Shares : Shares issued by the companies to their shareholders free of cost based on the number of shares the shareholder owns.

Preference shares : Owners of these kinds of shares are entitled to a fixed dividend or dividend calculated at a fixed rate to be paid regularly before dividend can be paid in respect of equity share. They also enjoy priority over the equity shareholders in payment of surplus. But in the event of liquidation, their claims rank below the claims of the company’s creditors, bondholders/debenture holders.

Cumulative Preference Shares: A type of preference shares on which dividend accumulates if remained unpaid. All arrears of preference dividend have to be paid out before paying dividend on equity shares.

Cumulative Convertible Preference Shares: A type of preference shares where the dividend payable on the same accumulates, if not paid. After a specified date, these shares will be converted into equity capital of the company.

Bond: Bond is a negotiable certificate evidencing indebtedness. It is normally unsecured. A debt security is generally issued by a company, municipality or government agency. A bond investor lends money to the issuer and in exchange, the issuer promises to repay the loan amount on a specified maturity date. The issuer usually pays the bond holder periodic interest payments over the life of the loan. The various types of Bonds are as follows:

Zero Coupon Bond: Bond issued at a discount and repaid at a face value. No periodic interest is paid. The difference between the issue price and redemption price represents the return to the holder. The buyer of these bonds receives only one payment, at the maturity of the bond.

Convertible Bond: A bond giving the investor the option to convert the bond into equity at a fixed conversion price. Treasury Bills: Short‐term (up to one year) bearer discount security issued by government as a means of financing their cash requirements.

12. Products and Services we offer at Angel

Equity Investment

Why should one invest in equities in particular?

When an investor buys a share of a company an investor becomes a shareholder in that company. Shares are also known as Equities. Equities have the potential to increase in value over time. It also provides an investor portfolio with the growth necessary to reach an investor long term investment goals. Research studies have proved that the equities have outperformed most other forms of investments in the long term. This may be illustrated with the help of following examples:

a) Over a 15 year period between 1990 to 2005, Nifty has given an annualized return of 17%.

b) Mr. Raju invests in Nifty on January 1, 2000 (index value 1592.90). The Nifty value as of end December 2005 was 2836.55. Holding this investment over this period Jan 2000 to Dec 2005 he gets a return of 78.07%. Investment in shares of ONGC Ltd for the same period gave a return of 465.86%, SBI 301.17% and Reliance 281.42%.

Therefore,

Equities are considered the most challenging and the rewarding, when compared to other investment options.

Research studies have proved that investments in some shares with a longer tenure of investment have yielded far superior returns than any other investment.

However, this does not mean all equity investments would guarantee similar high returns. Equities are high risk investments. One needs to study them carefully before investing.

What has been the average return on Equities in India?

Since 1990 till date, Indian stock market has returned about 17% to investors on an average in terms of increase in share prices or capital appreciation annually. Besides that on average stocks have paid 1.5% dividend annually. Dividend is a percentage of the face value of a share that a company returns to its shareholders from its annual profits. Compared to most other forms of investments, investing in equity shares offers the highest rate of return, if invested over a longer duration.

Which are the factors that influence the price of a stock?

Broadly there are two factors: (1) stock specific and (2) market specific. The stock‐specific factor is related to people’s expectations about the company, its future earnings capacity, financial health and management, level of technology and marketing skills. The market specific factor is influenced by the investor’s sentiment towards the stock market as a whole. This factor depends on the environment rather than the performance of any particular company. Events favourable

to an economy, political or regulatory environment like high economic growth, friendly budget, stable government etc. can fuel euphoria in the investors, resulting in a boom in the market. On the other hand, unfavourable events like war, economic crisis, communal riots, minority government etc. depress the market irrespective of certain companies performing well. However, the effect of market‐specific factor is generally short‐term. Despite ups and downs, price of a stock in the long run gets stabilized based on the stock specific factors. Therefore, a prudent advice to all investors is to analyze and invest and not speculate in shares.

What is meant by the terms Growth Stock / Value Stock?

Growth Stocks:

In the investment world we come across terms such as Growth stocks, Value stocks etc. Companies whose potential for growth in sales and earnings are excellent, are growing faster than other companies in the market or other stocks in the same industry are called the Growth Stocks. These companies usually pay little or no dividends and instead prefer to reinvest their profits in their business for further expansions.

Value Stocks:

The task here is to look for stocks that have been overlooked by other investors and which may have a ‘hidden value’. These companies may have been beaten down in price because of some bad event, or may be in an industry that's not fancied by most investors. However, even a company that has seen its stock price decline still has assets to its name ‐ buildings, real estate, inventories, subsidiaries, and so on. Many of these assets still have value, yet that value may not be reflected in the stock's price. Value investors look to buy stocks that are undervalued, and then hold those stocks until the rest of the market realizes the real value of the company's assets. The value investors tend to purchase a company's stock usually based on relationships between the current market price of the company and certain business fundamentals. They like P/E ratio being below a certain absolute limit; dividend yields above a certain absolute limit; Total sales at a certain level relative to the company's market capitalization, or market value etc.

How can one acquire equity shares?

An investor may subscribe to issues made by corporates in the primary market. In the primary market, resources are mobilized by the corporates through fresh public issues (IPOs) or through private placements. Alternately, an investor may purchase shares from the secondary market. To buy and sell securities an investor should approach a SEBI registered trading member (broker) of a recognized stock exchange.

What is Bid and Ask price?

The ‘Bid’ is the buyer’s price. It is this price that an investor needs to know when an investor has to sell a stock. Bid is the rate/price at which there is a ready buyer for the stock, which an investor intends to sell. The ‘Ask’ (or offer) is what an investor needs to know when an investor is buying i.e. this is the rate/ price at which there is seller ready to sell his stock. The seller will sell his stock if he gets the quoted “Ask’ price.

If an investor looks at a computer screen for a quote on the stock of say XYZ Ltd, it might look something like this:

Bid (Buy side) Ask (Sell side)

____________________________________________________________________

Qty. Price (Rs.) Qty. Price (Rs.)

_____________________________________________________________________

1000 50.25 2000 50.35

500 50.10 1000 50.40

550 50.05 1500 50.50

2500 50.00 3000 50.55

1300 49.85 1450 50.65

____________________________________________________________________

Total 5850 8950

_____________________________________________________________________

Here, on the left‐hand side after the Bid quantity and price, whereas on the right hand side we find the Ask quantity and prices. The best Buy (Bid) order is the order with the highest price and therefore sits on the first line of the Bid side (1000 shares @ Rs. 50.25). The best Sell (Ask) order is the order with the lowest sell price (2000 shares @ Rs. 50.35). The difference in the price of the best bid and ask is called as the Bid‐Ask spread and often is an indicator of liquidity in a stock. The narrower the difference the more liquid or highly traded is the stock.

What is a Portfolio?

A Portfolio is a combination of different investment assets mixed and matched for the purpose of achieving an investor's goal(s). Items that are considered a part of an investor portfolio can include any asset an investor own‐from shares, debentures, bonds, mutual fund units to items such as gold, art and even real estate etc. However, for most investors a portfolio has come to signify an investment in financial instruments like shares, debentures, fixed deposits, mutual fund units.

What is Diversification?

It is a risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Diversification is possibly the best way to reduce the risk in a portfolio.

What are the advantages of having a diversified portfolio?

A good investment portfolio is a mix of a wide range of asset class. Different securities perform differently at any point in time, so with a mix of asset types, an investor entire portfolio does not suffer the impact of a decline of any one security. When an investor stocks go down, an investor may still have the stability of the bonds in an investor portfolio. There have been all sorts of academic studies and formulas that demonstrate why diversification is important, but it's really just the simple practice of "not putting all an investor eggs in one basket." If an investor spread an investor investments across various types of assets and markets, an investor will reduce the risk of an investor entire portfolio getting affected by the adverse returns of any single asset class.

13. Derivatives

What are Types of Derivatives?

Forwards: A forward contract is a customized contract between two entities, where settlement takes place on a specific date in the future at today’s pre‐agreed price.

Futures: A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Futures contracts are special types of forward contracts in the sense that the former are standardized exchange‐traded contracts, such as futures of the Nifty index.

Options: An Option is a contract which gives the right, but not an obligation, to buy or sell the underlying at a stated date and at a stated price. While a buyer of an option pays the premium and buys the right to exercise his option, the writer of an option is the one who receives the option premium and therefore obliged to sell/buy the asset if the buyer exercises it on him. Options are of two types ‐ Calls and Puts options:

‘Calls’ give the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price on or before a given future date. ‘Puts’ give the buyer the right, but not the obligation to sell a given quantity of underlying asset at a given price on or before a given future date. Presently, at NSE futures and options are traded on the Nifty, CNX IT, BANK Nifty and 116 single stocks.

Warrants: Options generally have lives of up to one year. The majority of options traded on exchanges have maximum maturity of nine months. Longer dated options are called Warrants and are generally traded over‐the counter.

What is an ‘Option Premium’?

At the time of buying an option contract, the buyer has to pay premium. The premium is the price for acquiring the right to buy or sell. It is price paid by the option buyer to the option seller for acquiring the right to buy or sell. Option premiums are always paid upfront.

What is ‘Commodity Exchange’?

A Commodity Exchange is an association, or a company of any other body corporate organizing futures trading in commodities. In a wider sense, it is taken to include any organized market place where trade is routed through the mechanism, allowing effective competition among

buyers and among sellers – this would include auction‐type exchanges, but not wholesale markets, where trade is localized, but effectively takes place through many non‐related individual transactions between different permutations of buyers and sellers.

What is meant by ‘Commodity’?

FCRA Forward Contracts (Regulation) Act, 1952 defines “goods” as “every kind of movable property other than actionable claims, money and securities”. Futures’ trading is organized in such goods or commodities as are permitted by the Central Government. At present, all goods and products of agricultural (including plantation),

mineral and fossil origin are allowed for futures trading under the auspices of the commodity exchanges recognized under the FCRA.

What is Commodity derivatives market?

Commodity derivatives market trade contracts for which the underlying asset is commodity. It can be an agricultural commodity like wheat, soybeans, rapeseed, cotton, etc or precious metals like gold, silver, etc.

What is the difference between Commodity and Financial derivatives?

The basic concept of a derivative contract remains the same whether the underlying happens to be a commodity or a financial asset. However there are some features which are very peculiar to commodity derivative markets. In the case of financial derivatives, most of these contracts are cash settled. Even in the case of physical settlement, financial assets are not bulky and do not need special facility for storage. Due to the bulky nature of the underlying assets, physical settlement in commodity derivatives creates the need for warehousing. Similarly, the concept of varying quality of asset does not really exist as far as financial underlyings are concerned. However in the case of commodities, the quality of the asset underlying a contract can vary at times.

14. Miscellaneous

Corporate Actions

What are Corporate Actions?

Corporate actions tend to have a bearing on the price of a security. When a company announces a corporate action, it is initiating a process that will bring actual change to its securities either in terms of number of shares increasing in the hands on the shareholders or a change to the face value of the security or receiving shares of a new company by the shareholders as in the case of merger or acquisition etc. By understanding these different types of processes and their effects, an investor can have a clearer picture of what a corporate action indicates about a company's financial affairs and how that action will influence the company's share price and performance.

Corporate actions are typically agreed upon by a company's Board of Directors and authorized by the shareholders. Some examples are dividends, stock splits, rights issues, bonus issues etc.

What is meant by ‘Dividend’ declared by companies?

Returns received by investors in equities come in two forms a) growth in the value (market price) of the share and b) dividends. Dividend is distribution of part of a company's earnings to shareholders, usually twice a year in the form of a final dividend and an interim dividend. Dividend is therefore a source of income for the shareholder. Normally, the dividend is expressed on a 'per share' basis, for instance – Rs. 3 per share. This makes it easy to see how much of the company's profits are being paid out, and how much are being retained by the company to plough back into the business. So a company that has earnings per share in the year of Rs. 6 and pays out Rs. 3 per share as a dividend is passing half of its profits on to shareholders and retaining the other half. Directors of a company have discretion as to how much of a dividend to declare or whether they should pay any dividend at all.

What is meant by Dividend yield?

Dividend yield gives the relationship between the current price of a stock and the dividend paid by its’ issuing company during the last 12 months. It is calculated by aggregating past year's dividend and dividing it by the current stock price.

Example: ABC Co.

Share price : Rs. 360

Annual dividend : Rs. 10

Dividend yield : 2.77% (10/360)

Historically, a higher dividend yield has been considered to be desirable among investors. A high dividend yield is considered to be evidence that a stock is underpriced, whereas a low dividend yield is considered evidence that the stock is overpriced. A note of caution here though. There have been companies in the past which had a record of high dividend yield, only to go bust in later years. Dividend yield therefore can be only one of the factors in determining future performance of a company.

Why do companies announce Stock Split?

If the value of the stock doesn't change, what motivates a company to split its stock? Though there are no theoretical reasons in financial literature to indicate the need for a stock split, generally, there are mainly two important reasons. As the price of a security gets higher and higher, some investors may feel the price is too high for them to buy, or small investors may feel it is unaffordable. Splitting the stock brings the share price down to a more "attractive" level. In our earlier example to buy 1 share of company ABC an investor need Rs. 40 pre‐split, but after the stock split the same number of shares can be bought for Rs.10, making it attractive for more investors to buy the share. This leads us to the second reason. Splitting a stock may lead to increase in the stock's liquidity, since more investors are able to afford the share and the total outstanding shares of the company have also increased in the market.

Index

What is the Nifty index?

S&P CNX Nifty (Nifty), is a scientifically developed, 50 stock index, reflecting accurately the market movement of the Indian markets. It comprises of some of the largest and most liquid stocks traded on the NSE. It is maintained by India Index Services & Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. The index has been co‐branded by Standard & Poor’s (S&P). Nifty is the barometer of the Indian markets.

Clearing & Settlement and Redressal

What is a Clearing Corporation?

A Clearing Corporation is a part of an exchange or a separate entity and performs three functions, namely, it clears and settles all transactions, i.e. completes the process of receiving and delivering shares/funds to the buyers and sellers in the market, it provides financial guarantee for all transactions executed on the exchange and provides risk management functions. National Securities Clearing Corporation (NSCCL), a 100% subsidiary of NSE, performs the role of a Clearing Corporation for transactions executed on the NSE.

What is Rolling Settlement?

Under rolling settlement all open positions at the end of the day mandatorily result in payment/ delivery ‘n’ days later. Currently trades in rolling settlement are settled on T+2 basis where T is the trade day. For example, a trade executed on Monday is mandatorily settled by Wednesday (considering two working days from the trade day).

The funds and securities pay‐in and pay‐out are carried out on T+2 days.

What is Pay‐in and Pay‐out?

Pay‐in day is the day when the securities sold are delivered to the exchange by the sellers and funds for the securities purchased are made available to the exchange by the buyers. Pay‐out day is the day the securities purchased are delivered to the buyers and the funds for the securities sold are given to the sellers by the exchange. At present the pay‐in and pay‐out happens on the 2nd working day after the trade is executed on the stock exchange.

What is short selling?

Short selling is a legitimate trading strategy. It is a sale of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers take the risk that they will be able to buy the stock at a more favorable price than the price at which they "sold short."

What is a No‐delivery period?

Whenever a company announces a book closure or record date, the exchange sets up a no‐delivery period for that security. During this period only trading is permitted in the security. However, these trades are settled only after the no‐delivery period is over. This is done to ensure that investor's entitlement for the corporate benefit is clearly determined.

What is an Ex‐dividend date?

The date on or after which a security begins trading without the dividend included in the price, i.e. buyers of the shares will no longer be entitled for the dividend which has been declared recently by the company, in case they buy on or after the ex‐dividend date.

What is an Ex‐date?

The first day of the no‐delivery period is the ex‐date. If there is any corporate benefits such as rights, bonus, dividend announced for which book closure/record date is fixed, the buyer of the shares on or after the ex‐date will not be eligible for the benefits.

What is Arbitration?

Arbitration is an alternative dispute resolution mechanism provided by a stock exchange for resolving disputes between the trading members and their clients in respect of trades done on the exchange. If no amicable settlement could be reached through the normal grievance redressal mechanism of the stock exchange, then an investor can make application for reference to Arbitration under the Bye‐Laws of the concerned Stock exchange.

What is a Book‐closure/Record date?

Book closure and record date help a company determine exactly the shareholders of a company as on a given date. Book closure refers to the closing of the register of the names of investors in the records of a company. Companies announce book closure dates from time to time. The benefits of dividends, bonus issues, rights issue accrue to investors whose name appears on the company's records as on a given date which is known as the record date and is declared in advance by the company so that buyers have enough time to buy the shares, get them registered in the books of the company and become entitled for the benefits such as bonus, rights, dividends etc. With the depositories now in place, the buyers need not send shares physically to the companies for registration. This is taken care by the depository since they have the records of investor holdings as on a particular date electronically with them.

What is Buyback of Shares?

A buyback can be seen as a method for company to invest in itself by buying shares from other investors in the market. Buybacks reduce the number of shares outstanding in the market. Buy back is done by the company with the purpose to improve the liquidity in its shares and enhance the shareholders’ wealth. Under the SEBI (Buy Back of Securities) Regulation, 1998, a company is permitted to buy back its share from:

a) Existing shareholders on a proportionate basis through the offer document.

b) Open market through stock exchanges using book building process.

c) Shareholders holding odd lot shares.

The company has to disclose the pre and post‐buyback holding of the promoters. To ensure completion of the buyback process speedily, the regulations have stipulated time limit for each step. For example, in the cases of purchases through stock exchanges, an offer for buy back should not remain open for more than 30 days. The verification of shares received in buy back has to be completed within 15 days of the closure of the offer.

The payments for accepted securities has to be made within 7 days of the completion of verification and bought back shares have to be extinguished within 7 days of the date of the payment.

What is EPS, P/E, BV and MV/BV?

Earning Per Share (EPS): EPS represents the portion of a company's profit allocated to each outstanding share of common stock. Net income (reported or estimated) for a period of time is divided by the total number of shares outstanding during that period. It is one of the measures of the profitability of common shareholder's investments. It is given by profit after tax (PAT) divided by number of common shares outstanding.

Price Earning Multiple (P/E): Price earning multiple is ratio between market value per share and earning per share. Book Value (BV): (of a common share) The company's Net worth (which is paid‐up capital + reserves & surplus) divided by number of shares outstanding.

(MV/BV ratio)Market value to book value ratio: It is the ratio between the market price of a security and Book Value of the security.

What is a Stock Split?

A stock split is a corporate action which splits the existing shares of a particular face value into smaller denominations so that the number of shares increase, however, the market capitalization or the value of shares held by the investors post split remains the same as that before the split.

For e.g. If a company has issued 1,00,00,000 shares with a face value of Rs. 10 and the current market price being Rs. 100, a 2‐for‐1 stock split would reduce the face value of the shares to 5 and increase the number of the company’s outstanding shares to 2,00,00,000, (1,00,00,000*(10/5)). Consequently, the share price would also halve to Rs. 50 so that the market capitalization or the value shares held by an investor remains unchanged. It is the same thing as exchanging a Rs. 100 note for two Rs. 50 notes; the value remains the same . Let us see the impact of this on the share holder: ‐ Let's say company ABC is trading at Rs. 40 and has 100 million shares issued, which gives it a market capitalization of Rs. 4000 million (Rs. 40 x 100 million shares). An investor holds 400 shares of the company valued at Rs. 16,000. The company then decides to implement a 4‐for‐1 stock split (i.e. a shareholder holding 1 share, will now hold 4 shares). For each share shareholders currently own, they receive three additional shares. The investor will therefore hold 1600 shares. So the investor gains 3 additional shares for each share held. But this does not impact the value of the shares held by the investor since post split, the price of the stock is also split by 25% (1/4th), from Rs. 40 to Rs.10, therefore the investor continues to hold Rs. 16,000 worth of shares. Notice that the market capitalization stays the same ‐ it has increased the amount of stocks outstanding to 400 million while simultaneously reducing the stock price by 25% to Rs. 10 for a capitalization of Rs. 4000 million. The true value of the company hasn't changed. An easy way to determine the new stock price is to divide the previous stock price by the split ratio. In the case of our example, divide Rs. 40 by 4 and we get

the new trading price of Rs. 10. If a stock were to split 3‐for‐2, we'd do the same thing: 40/(3/2) = 40/1.5 = Rs. 26.60. Pre‐Split Post‐Split 2‐for‐1 Split No. of shares 100 mill. 200 mill. Share Price Rs. 40 Rs. 20 Market Cap. Rs. 4000 mill. Rs. 4000 mill. 4‐for‐1 No. of shares 100 mill. 400 mill. Share Price Rs. 40 Rs. 10 Market Cap. Rs. 4000 mill. Rs. 4000 mill.

What is an Auction?

On account of non‐delivery of securities by the trading member on the payin day, the securities are put up for auction by the Exchange. This ensures that the buying trading member receives the securities. The Exchange purchases the requisite quantity in auction market and gives them to the buying trading member.

Auction Procedure

Normal Trading in BSE or NSE Segment:

CASE ‐ I

T : Monday (+) 500 Shares o Reliance

T+1 : Tuesday

T+2 : Wednesday Delivery in Angel Pool

(Pay In ‐ Pay Out day)

T+3 : Thursday Transfer to DP

CASE ‐ II

T : Monday (‐) 500 Shares of Reliance

T+1 : Tuesday

T+2 : Wednesday Delivery before 10:30AM

(Pay In ‐ Pay Out day)

T+3 : Thursday Market Auction

Considering that the client that the sold share is his short position, the shares get auctioned. The internal auction happens on T+2 basis. Bill gets generated on the T+2 day. Confirmation of the auction can be received on the same day the bill is prepared.

In case the internal auction does not happen the share goes in the market for the Market auction. The market auction is conducted by BSE on the T+3 day.

The internal auction takes place @7%

7% ‐ Closing of T+2 day

Or

7% ‐ T day (whichever is higher)

In case of market auction, it is charged anywhere between 10% ‐ 15% + PENALTY. Penalty depends on the script.

Auction for Trade to Trade Segment

Trade to Trade segment shares by default have a compulsory delivery rule. If u buy then have to compulsory take the delivery and if you sell, then have to compulsory give the delivery. No intra day is allowed in this segment.

In case of selling the shares of this segment, the client has to give compulsory delivery. In case he is not able to then the shares get auctioned in the market.

⇒ Only Market Auction ⇒ 15% minimum ‐ if on BSE

20% minimum – if on NSE cash

Physical Shares

Shares which have a compulsory D‐MAT label have to be dematerialized for the purpose of trading. The share on physical form i.e. Share Certificates which are not dematerialized can also be sold in the market subject to provisions.

In such cases the shares BEFORE 1999 – 2000 can only be sold in the market but the rate applicable to such shares is lower than the current market rate. The Pay in and Pay out happens on T+1 day.

Some physical shares are also there in trade to trade segment. Provisions applicable to them are same as that to normal trade to trade segment. In case of shares that are short there is a compulsory market auction. The charges auction applicable to in the auction:

⇒ Only Market Auction ⇒ Above 15% ‐ if on BSE

Above 20% – if on NSE cash

⇒ The rate on which auction is done can be the T day or T+1 day or T+2 day which ever closing rate is higher.

There are exceptional shares which are listed on the exchanges where the shares in physical form can be sold even after 1999 – 2000 i.e. if they are bought on 06/11/2006 then they can be sold on 10/11/2006 provided the shares have been transferred to the client account. If such shares are bought then the delivery might come in 15 to 20 days depending on the company. E.g. State Bank of Travancore.

Dealing BPS Check List

GRADE: OVERALL SCORE: 0

Activity Purpose Ideal

Activity Timing

Branch Scores

Process Type

Remarks

Pre Market Activity

Reporting 9 A.M Punctuality 9 A.M Daily

Check if the Dealers practice a Pre‐Market meeting

Discuss market outlook for the day and check angel long term research calls as well as positional calls if any for the

9.15 A.M to 9.30 A.M

Daily

day

Presence of Risk Management person required in pre‐market to update the dealers regarding the current risk status of their clients in pure/projected risk

Identifying Pure risk customer

9.15 A.M to 9.30 A.M

Daily

Promotion of angel positional and long term calls

A call before market will give the image of personalized service to the client

9.35 A.M to 9.50 A.M

Daily

Dealing Market Activity

Promotion of angel (Intra‐day & positional calls) by phone, messenger etc during market hours proactively

Keeping the client interested during market hours

9.55 A.M to 3.30 P.M

Daily

Dealers should ideally confirm Scrip,Price,Quantity & Trading code before executing any trades

This will avoid any punching error which should not happen and avoided at all costs

9.55 A.M to 3.30 P.M

Daily

Dealers should ideally confirm limit order trades buy /sell to clients as soon as execution of trades happen

More trade confirmations will give rise to more trades execution

9.55 A.M to 3.30 P.M

Daily

Dealers should ideally always check the clients net position on a regular basis and confirm the same with the client before market closure

This will avoid any kind of mis deals which should not happen and avoided at all costs

9.55 A.M to 3.30 P.M

Daily

Post Market Activity

Trade confirmations for the day have to informed to the client on a daily basis on a recorded line

The client should agree & confirm about net position of the day

3.30 P.M to 4.15 P.M

Daily

Usage of CRMS software by every dealer and using the system as a value addition

To use the software in giving optimum service to the client in all possible ways

4.30 P.M to 5.30 P.M

Daily

Post market meeting

Awareness about recent market news and upgrade one's market knowledge by obtaining information of corporate actions on particular scrips

5.30 P.M to 6.00 P.M

Daily

Other Requirements

NCFM / BCCM Certified

NSE CASH

NSE ‐ F&O

BSE‐ Cash

COMMODITIY

Total 0

CHAPTER – VI Security of Your Shares – DP / DEMAT

CHAPTER COVERAGE

1. Introduction

2. Advantages of having DP a/c with Angel

3. Different features of Angel’s DP

4. Tracking of transfer of shares

5. Charges for Depository Services

6. Benefits and connectivity requirements

7. Compliance requirement for Branch

8. Filling of DIS for different transactions

9. Points to be noted for Dematerialization of Shares

10. Useful utilities and link for DP services (cross net)

11. Pay‐in shortage confirmation

12. Pay‐out Process and shortage confirmation

13. Auction Bills

14. Marking of shares for F&O collateral and margin reports

15. Corporate action

16. Important notes

17. Additional useful utilities/links for DP & Demat services

18. DP/Demat checklist

1. Introduction of Angle DP

Angel provides its DP services through CDSL.

The depository services are offered to create a seamless transaction platform to execute trades through the Angel Group of Companies and to settle these transactions through Angel Depository Services.

As a DP, we have always worked to anticipate and fulfill the changing needs of our esteemed customers.

Our efforts in this direction have gradually started Paying off, as we have grown by leaps and bounds, and have been able to provide DP services to 3, 10,000 clients spread over 119 branches.

The present asset size under our DP has reached Rs.3241 crore as on September ’2008.

Initiatives like strict adherence to compliances, ethical business practices, pro‐active services and innovative products have helped us to stand tall amongst our competitors.

With the help of steady growth in the investor base, we are able to service our DP clients’ at the most competitive rates.

We aim to continually serve our clients’ needs by providing quality services in a timely fashion at cost effective rates.

2. Advantages of having DP A/C with Angel

Fig. 1

The channel partners during the course of interaction with existing or prospective clients should highlight the benefits of holding DP services with Angel which are as given below:

Angel is in a better position to know the requirements of its clients on an instant basis.

No physical instructions are required for client’s selling obligations – as we provide automated pay‐in facility to our clients for trades done through Angel Broking Limited/Angel Capital & Debt Market Ltd. (POA)

The transaction charges are the lowest in the industry and have been kept so to ensure that our clients get more value for their money.

We provide the clients with options which have unique features like:‐

Viewing, downloading and printing the holdings of the Demat account along with valuation of holding on a real time basis. This facility can be accessed anytime/anywhere and is sourced directly from the CDSL database, if you subscribe to the Easy facility offered by CDSL.

SMART (SMS Alerts Related to Transactions) is CDSL's SMS alert facility in which registered clients will receive alerts for all types of debits and for credits due to IPO allotments and corporate actions in their Demat account. Thus, SMART acts as an effective risk control mechanism for monitoring the Demat account for the client

On subscription to Easiest offered by CDSL the client can submit his own delivery instructions on the internet without the intervention of his DP. Thus gets the leverage of delivering his own instruction at his leisure from anywhere.

Following are some of the important reports mentioned below which can be viewed by the clients:

i. Pay‐in & Pay‐out shortage report ii. Report of Holding, Ledger & transaction in Demat and Trading A/c iii. Client profile iv. Settlement Calendar v. ISIN Master Etc.

Further, the clients can download the DP form formats e.g. Account Modification, SMS facility form etc. directly from our website www.angeltrade.com under Depository services > Download DP forms.

3. Different features of Angel’s DP

Fig. 2

No risk of loss, wrong transfer, mutilation or theft of share certificates.

Efficient Demat mechanism.

Hassle‐free automated pay‐in of sell obligation by the Clearing Member.

Reduced paper work.

Speedier settlement process. Increase in liquidity of your securities because of faster transfer and registration of securities in Client’s account.

On‐time disbursement of non‐cash benefits like bonus and rights into client’s own account.

Efficient pledge mechanism.

Wide Branch coverage.

Personalized / attentive services of a trained Help Desk.

Centralized billing & accounting.

All in one combined monthly ‘Bill‐cum‐Transaction‐Cum‐Holding‐cum‐Ledger’ statement.

4. Tracking of transfer of shares

Through our Back‐Office software we are offering certain Value Added Facilities to our Clients in addition to the facilities offered by CDSL mentioned as below:‐

Our web‐enabled Back‐Office software allows the client to view his online transaction statement, status of transaction and holding for any historic period.

The clients can have access to the ledger account as well as the Client profile online.

We also maintain the account and update the back office on a real time basis, as per the instructions given by the investors from time to time.

The Sub broker / Clients login can view / print DP transaction statements for a period of 1 year (i.e. 365 days) and can view holdings statement as on any date from January 01, 2008

5. Charges for Depository Services through CDSL W.E.F 01‐JUL‐2007

Sr. Services S C H E M E S

H.N.I./Traders Investors

1 Annual Membership Charges Rs.700/‐ Rs. 300/‐

2 Deliveries/Debit (Market & Off Market)

1. Within Angel DP

2. Outside Angel DP (Charges are inclusive of CDSL tariff)

Rs. 11/‐ txn Rs. 16/‐txn

Rs. 11/‐ txn Rs. 21/‐ txn

3 Pledge (Creation/Closure/Invocation) Rs. 25/‐ Per ISIN Rs. 25/‐ Per ISIN

4 Dematerialisation Rs. 4/‐ per certificate plus Rs. 30/‐ per request towards postal charges

Rs. 4/‐ per certificate plus Rs. 30/‐ per request towards postal charges

Rematerialisation Actual CDSL charges plus Rs 30/‐ per requesttowards postal charges

Actual CDSL charges plus Rs 30/‐ per request towards postal charges

Other Terms:

Agreement Charges (Stamp Duty) of Rs. 100/‐ is payable per account (one time only at time of account opening)

Power of Attorney (POA) charges Rs.135 (Rs.100/‐ stamp paper and notary charges of Rs 35/‐one time only at time of account opening).

For availing Easiest facility of CDSL, The charges as levied by CDSL would be collected from clients at actual.

In case of every Corporate Accounts, CDSL AMC of Rs. 500/‐ shall be charged extra.

CDSL levies transaction charge of Rs. 6/‐ per delivery transaction.

CDSL levies Rematerialisation charges as higher of the following – A fee of Rs 10/‐ for every 100 securities or part thereof: A flat fee of Rs 10/‐ per certificate.

Services tax, Education cess and other statutory levies (if any) would be charged extra wherever applicable as per the prevailing rates.

6. Benefits and connectivity requirements

A channel partner can also become a sub‐DP of Angel Depository Services and avail of various benefits for his own clients:

The channel partner can execute the delivery instructions on behalf of their clients, mapped through Angel CSO. The clients will give the delivery instructions to the channel partner, who in turn can punch the instructions into the back office. These instructions may be scanned into the system or even faxed to CSO, which will verify and authenticate the transaction. The original DIS needs to be sent to CSO within the next 2 days.

The channel partner can view transaction, holding, ledger, bills and other reports of their clients.

The channel partner can issue welcome letters to their clients for new a/c opening.

The channel partner can view signatures of their clients.

Online messages can be sent by the CSO to the channel partner and vice versa.

The channel partner can also monitor the status of transactions of their clients with the CSO.

Connectivity requirements:

The Channel Partner can easily get the DP interface by signing up a simple request form (Master Creation Form) and an Agreement with Angel for providing DP services. Training is provided accordingly. Login id and password for DP interface will be allotted to the Channel partners

7. DP compliance requirement for branch

ANGEL board mentioning DP services to be displayed at a visible location at the branch

Person handling the DP desk has to be BCCD certified.

DP Agreement (Sub‐brokers & Franchisees), if the Cross net login is given

Hand Delivery register for DIS/DRF/Other documents and inward/outward records of all DP documents to be maintained

Hand Delivery of DIS to 3rd party should be given only on basis of authority letter provided by the client

Dispatch Proofs (POD) of DP documents need to be filed separately and log of the documents couriered to be maintained with POD nos.

Reason on ‘OFF MARKET’ Delivery Instruction Slip needs to be mention on the slips by clients on submission

Processed original DIS to be forwarded to CSO within 2 days

In‐person Verification of the applicant

Time and date stamp & initial of DP executive on the processed DIS

Best Effort stamp on same day Pay‐in / off‐market slips

8. Filling of DIS for different transactions

8.1. If clients sell shares on BSE (i.e. in Angel Broking Ltd) & have not opted for POA:

Always give transfer as Market Transfer

CMBPID : IN606125

CM Name : Angel Broking Ltd.

Settlement No : 0809XXX

Market Type : Rolling Market

8.2. If clients sell the shares on NSE (i.e. Angel Capital & Debt Market) & have not opted for POA:

Always give transfer as Market Transfer

CMBPID : IN556929

CM Name : Angel Capital & Debt Market Ltd.

Settlement No : 2008XXX

Market Type : Normal (In case of Trade to Trade: Trade for . Trade)

8.3. If clients are giving shares as security/margin:

Give off market transfer to

In case of BSE : DP id : IN301549

DP Name : HDFC Bank Ltd

Client id : 14216209

In case of NSE : DP id : IN301151



In case of F & O : DP id : IN301549



A link is available in back office for online tracking of pending DIS. The branches can login into the below mentioned link and check the status of DIS that has been dispatched to CSO. Steps to be followed:

Log‐in to Angel back office (http://196.1.115.150 – Depository POA Report.

Click on DIS report

Select from date, to date, Branch Tag and RECO option

The generated MIS can be exported to excel.

9. Points to be noted for Dematerialization of Shares

Ensure that only the scrips eligible for Dematerialization are sent to CSO for further processing. The details of the scrips which are under Demat are available in the cross‐net as well as on www.cdslindia.com .

Before dispatch, ensure that the DRF copies sent to CSO are filled in completely and signed by all accountholders.

Verify the account holder’s signature with our DP system‐ Cross Net.

In case of HUF / Corporate accounts, kindly ensure the seal of HUF / Corporate is there on DRF.

Ensure that the name appearing on the certificate surrendered for Demat is in the same order as appearing in the DP account.

A separate link has been introduced (http://196.1.115.136/rmnew/main.asp) to track the status of Demat Request Form (DRF) from branches to CSO. Presently, branches forward the DRFs to CSO and maintain details in excel. The branches are not able to track the receipt of DRF at CSO. Now, with the implementation of above link, branches will have the following benefits:

Online tracking and inwarding of DRF

Verification of Client Signature from DRF link

Verification of Vanishing company details from DRF link

Maintenance dispatch details to CSO

This will help branches to reduce their dependency on CSO for follow up calls and will also enhance efficiency at branch end. We have attached the detailed process flow for ready reference of branches

10. Useful utilities and link for DP services (cross net)

DIS Punching into the Cross Net ‐ On receipt of DIS from the client, the Branches have to enter the DIS instruction in the Cross Net and scan the DIS into the system.

The Branches have to navigate through the following process for making the entry of DIS and scanning the copy of DIS.

Login to Cross Net Settlement Off Market / Inter Depository.

Off Market: This option has to be selected when the clients wants to give delivery in other Beneficiary A/c i.e. transfer from CDSL to CDSL. For same day execution DIS, following are the timelines for the branch.

Monday to Friday – before 6.00 pm and Saturday – before 2.30 pm

Inter Depository: This option has to be selected when the client wants to give delivery in the Pool A/c i.e. transfer from CDSL to NSDL. For same day execution DIS, following are the timelines for the branch.

Monday to Friday – before 5.00 pm and Saturday – before 1.00 pm

Print Screen for DIS Link in Cross Net

DIS Punching Screen when Off market / Inter Depository option is selected.

The DIS Slip can be scanned by navigating through the following process.

Login to Cross Net Settlement Slip Scan.

Displays the Screen of Slip Scanning.

Click on Settlements to Enter

Instructions

In Settlements, the entry can be done for

On Market, Off Market, Early Pay-in

Other Options in Cross Net

1. A/c Opening letter: When a client opens a new Depository Participant account with us, the branches need to send the Account opening letter to the customer. The format of the letter is available in Cross Net.

2. A/c freezing Letter: Account freezing letter to be sent to the client.

3. Clear Login: The locked login ids. of the Cross Net can be unlocked through this link.

4. Messages: With the help of the Messages link, branches can directly send the mail to the users mapped in the list.

5. Client Summary: This link provides the complete client summary with the details of the holding that was last updated into the system.

6. Client Password: The user of Cross net can change password on the said link.

Other Options in Cross Net.

You can clear login for locked users.

You can send messages to Head Office and End Users

Client Summary report gives you a span shot of

client accounts with Holding, Outstanding Amount, Telephone b t hi h

Here you have Other Options like you can print Letter for Account Opening or Freezing, Scan A/c Opening Form

The ledger for specified period can be viewed / printed through this link.

DP Transaction and Holdings Statements

The branches login in Cross Net can view / print transaction statement for 365 days and also view Holdings Statements of the clients as on any date starting from January 01, 2007 / account opening date whichever is later.

For viewing the Transaction Statement the Branches have to navigate through the following process:

Login to Cross Net Reports Transaction Statement Enter DP Client Id. and From date – To date. Click on Preview

View / Print of Transaction Statement

To view the Holdings Statement as on any date from January 01, 2007 the branches should navigate through the following process.

Login to Cross Net Reports Transaction / Holding / Bill Enter DP Client Id. and from date – To date. Click on Preview

View Holdings Statement

11. Pay‐in shortage confirmation

The Pay‐in shortage file can be viewed in the Back office software on navigating through the below mentioned process on T+1 day after 11:00am and 3:00pm and 9:00pm on T+2 day respectively.

The shortage confirmation must be conveyed to the clients by the Branch or the SB proactively to avoid any losses to the clients.

Link: Share Reports NSE Delivery Reports / BSE Delivery Reports In Options – Statements > Pay‐in Reconciliation

Enter Settlement Type and Settlement No. and select Branch tag and Option – Only Shortage, then the Pay‐in shortage file will be displayed (Figure 3)

The branches have to intimate the CSO via mail about the reason for shortage in the excel format.

Fig. 3

12. Pay‐out of shares and shortage confirmation:

Pay‐out of securities are received from the Clearing House on T+2 days in Angel’s pool account, from where it is shifted to Angel’s beneficiary account where it is held client‐wise.

Securities held in Angel’s beneficiary account can be transferred to client’s DP account on request.

For this purpose, the Branch or the SB has to mark a pay‐out of shares in our back‐office.

The shortage confirmation must be conveyed to the clients by the Branch or the SB proactively to avoid any losses to the clients.

The pay‐out shortage report can be checked after 3:00pm on T+2 day and after 11:30pm on T+3 day

Link for Pay‐out marking by the Branch:

For checking the BSE/NSE Pay‐out request the branches have to login into the Back office software and navigate through the below mentioned process.

Link: Share Reports BSE Pay‐out Request or Approval / NSE Pay‐out request or Approval.

Enter the Sett No, Sett Type, Party Code, and Scrip Code, Branch/Sub‐ broker and Option details and then click on Submit.

The following screen will appear in the Back office software. (Figure 4 and 5)

The branches have to enter the total quantity for Pay‐out of shares in the Marked Qty column and then click on Submit.

Fig. 4

Fig. 5

Checking Branch marking Pay‐out of shares

Fig. 6

Pay‐out Shortage

Pay‐out shortage can be viewed by navigating through the following process.

Share Reports BSE Delivery Reports (Hist) / NSE Delivery Reports (Hist) In options – Shortage Reports Clients Pay out New

The details of all the Pay‐out Shortage for the specified settlement is displayed on the screen. (Figure 7)

Figure 3: Pay‐out Shortage File

Fig. 7

13. Auction Bills:

The printouts of the Auction bills can be taken from the following:

Links:

• Shares Reports > Printing > BSE Contract cum Bill V2 • Shares Reports > Printing > NSE Contract cum Bill V2 •

The timelines for the branch to print Auction bills and intimate clients are as follows:

• Internal Auction ‐ Bill needs be checked after 9.00 am on T+3 day (BSE) • Market Auction ‐ Bill needs be checked after 4.00 pm on T+3 day (BSE) • Internal Auction ‐ Bill needs be checked after 9.00 am on T+3 day (NSE) • Market Auction ‐ Bill needs be checked after 9.00 am on T+4 day (NSE)

14. Marking of shares for F&O collateral and margin reports

Approved Scrip F&O list ‐ The branches should check the list of all the Approved Scrips for marking shares for F&O Collateral Account. The list is available in the Risk Management Link (http://196.1.115.136/rmnew/main.asp) by navigating through the following process.

Link: Risk Management Other Information Approved Scrip FO (Figure 8)

The request for marking shares for F&O Collateral should be given from the displayed list only.

Fig. 8

Pay‐in from Margin Account

The branches can view details of all the Pay‐in for a particular settlement from the Margin Account by navigating through the following process. The Branches and Sub‐Brokers can view / identify from this report if any of their clients have sold the shares which they have given to us as a security/margin, and whether the same are to be released and used for pay‐in.

Link: Share reports Display Shortage Reason (Figure 9)

Enter the following details: Settlement: From – To > Exchange Segment > Report Title – Client only Bits Report> Click on Show report (On the right side)

Fig. 9

Margin Holding and Pay‐out request

The branches can view the clients holding in the Margin Account by navigating through the following process. This would ensure that shares given for margin can now be released through this option

Share Reports PP Holding and Pay‐out mark. (Figure 10)

Enter the following details:

Exchange Segment

Report type: Report – For holdings request and Pay‐out request – For Marking Pay‐out from the Holdings

Enter Client Code, Scrip code and from date – to date.

Fig. 10

Points to be noted by the Branch for release request of shares from Margin Account

The CSO team would ‘by default’ release the shares of clients from Margin account based on clients selling & shortage position on t+1 day and shall not wait for branch communication.

Any additional shares transferred by clients from outside DP account for ‘Pay‐in’ would stand to the credit of clients or would get adjusted against the shortage of another client. In this scenario, the client who has transferred excess shares would get close out @ 7%. This effectively means that clients need not transfer shares from outside DP if they have the required quantities of shares in our Margin account to meet their selling obligation.

Now, if clients wish to transfer shares from outside DP account and does not want CSO to touch shares lying in Margin account, then a communication to this effect needs to be sent to CSO before 11.30 a.m. on ‘T+1’ day.

However, branch executives continue to inform to CSO for release of shares in following exceptional situations like,

if Shares are held under ‘Sub Broker Tag’,

If shares are sold on the same day of transfer to margin account. Though this is not advisable as shares requested for transfer to margin account shall not be sold for next 3 working days. The Pay‐in in such situation would be met by CSO on a best effort basis and shall be at clients own risk. We strictly solicit that shares requested for transfer to margin account shall not be sold for next 2‐3 working days.

If shares are sold and client is under ‘Shifting Mode’‐ Client Shifting from one tag to another or from one branch to another.

15. Corporate action:

Splits, dividends, mergers, acquisitions, rights, buy back are all examples of corporate actions.

Ex‐date – The date on which security trades without the benefit of a corporate action.

Record date ‐ The date on which the company (RTA) proposes to determine the holders who are entitled to receive the benefit of corporate action.

The Branches should verifying Corporate Action Report link and mark pay‐out after checking the clients’ ledger Debit/Credit before the record date and take extra care for timely submission of client’s DIS for corporate action.

The client’s having shares in our beneficiary account needs to be informed on Rights / Buyback as per list provided from CSO

In case Rights/Buy Back confirmation letters from clients needs to be acquired and maintained at the branches.

Link: https://196.1.115.150 > Angel Broking Ltd > Log‐in > Share Reports > Display > Corporate action announced

16. Important notes:

Credit will not be given for shares given from 3rd party id.

If clients are giving shares from new Demat account which is not registered with Angel, then kindly ensure you send us a copy of the new Demat account details on or before the pay‐in day.

The Branch or SB must educate the clients on the policy of 7% of internal closeout on shortages and also connectivity snag as mentioned in our KYC agreement.

Original DIS collected from clients should be forwarded to CSO within 2 days.

In case of Off‐market transaction DIS, the reason for such transfer should be taken in writing on the back side of DIS from clients along with their signatures.

Acknowledgement to be given to client for each receipt of DIS and date & time stamp to be pasted on our copy (back side).

Best effort stamp needs to be affixed in case, if the client submits the DIS with same day’s execution date

DIS books received from CSO / branches need to be dispatched to clients or handed over to clients, and proper record needs to be maintained.

Person handling the DP back office function should be a BCCD certified person.

If DP back office rights are assigned to any SB / franchisee, than a DP – franchise agreement is to be obtained from SB / franchisee.

17. Additional useful utilities / links for DP services & Settlements:

VIEW IPO ALLOTMENT:

This option would show the client‐wise / branch‐wise allotment received from companies who came out with an IPO. The branches can view shares allotted to our clients in an IPO and proactively inform them about the same. (First hand information)

Link: Log on to www. Angelbackoffice.com > Select Depository POA > Login to view > IPO allotment report / POA status / PAN pending clients details etc. can be viewed

DP bill and ledger info:

This link would give details of sub‐broker‐wise/Client‐wise outstanding DP dues. Kindly make use of this link for DP bill collection to eliminate/ reduce any bad debts. We believe that this link would be useful for follow ups with clients for DP dues.

Link: Log on to www. Angelbackoffice.com > Risk Management > Login to view > DP / Ledger & Bill Info. can be viewed

VIEW NON PAN CLIENTS:

Branches can view all the NON‐PAN clients attached to the branch and shall follow‐up with these clients for PAN. (Non PAN clients to get de‐ activated w.e.f. 01/01/2007)

Link: Log on to www. Angelbackoffice.com > Select Depository POA > Login to view > PAN pending clients details etc. can be viewed

VIEW POWER OF ATTORNEY (POA) STATUS:

Branches can view the POA status (active / non‐active) of all clients attached to a particular branch. This is a useful link which helps you to know whether the client is registered as POA client or not. (Useful for following up for pay‐in shortages)

Link: Log on to www. Angelbackoffice.com > Select Depository POA > Login to view > POA status can be viewed

18. DP & Settlement Checklist

DP /Settlement Checklist

Sr. Activity Weightage Score Grade ‐

0 Remarks

1 Knowledge & awareness 8 0

a BPM 4.0 version Refered (Link: Harmony > E‐Wise > Process Manual >

Dp/Demat) 2

b Awareness of NSE ‐BSE & Settlement date difference (year‐2008 or fin yr ‐

0809 first 4 digits respectively) 1

c Code N & W for Normal and Trade for trade marked respectively for NSE and for BSE D & C Rolling or T for T and settlement no. difference ‐ for usage of

backoffice reports 1

f

Awareness to check Client Position (Inter settlement/Exchange) (The branch calls the CSO for information on customer status while this information is readily available to them through a software which connects them to the

online CSO database) (Link: 196.1.115.150 > Angel broking ltd.> Share reports > Delivery reports (NSE/BSE) > Clientwise report)

1

g Power of Attorney‐ availability check & IPO Allotment report ( Link:

196.1.115.150 > POA) 1

h Shares given as Margin/ Security FO‐COMM before updating should not be

allowed to sell it, Risk in Sell/Buy in FO (Link: 196.1.115.150> Risk Management > RMS Report > Collection)

1

i Inform client that no Adjustment should be made 1

2

Pay‐in shortage report sent to CSO before 10:00am and final shortage report sent before 12:00pm. Records is maintained settlement wise (Link:

196.1.115.150 > Angel broking ltd.> Share reports > Delivery reports > NSE/BSE Delivery report>Statements > Pay‐in Reconciliation)

8

3

Pay‐out shortages informed to client before 10:00am and records of call the maintained in excel with time of call (Link: 196.1.115.150 > Angel broking ltd.> Share reports > BSE/NSE Delivery reports > NSE/BSE Delivery report >

Shortage report > Client pay‐out New)

8

4 Auction 5 0

a

To check if the Branch informs the customer of the Auction procedure‐ 7%for internal close‐out given to customer (Note:‐ currently the customer is not

informed by the Branch and if charged when the T+2 deliverables not met and then the dissatisfied customer is transferred to the CSO to the deal with it)

3

b

Auction debit/credit is intimated to client and records maintained for the same. Auction bill is printed and sent to clients (Link : 196.1.115.150 > Angel broking ltd.>Shares Reports à Printing > BSE Contract cum Bill V2 & Shares

Reports à Printing > NSE Contract cum Bill V2)

2

5

Pay‐out is marked after checking client ledger in RM. Records maintained for the clients to whom pay‐out marked (Link: 196.1.115.150 > Angel broking ltd.> Share reports > Delivery reports > BSE/NSE Payout request & BSE/NSE

Payout Approval)

5

6 Corporate action 8 0

a Default Pay‐out is give to clients before the record date as per the corporate action list forwarded by CSO fortnightly subject to risk (Link: 196.1.115.150 >

Angel broking ltd.> Share reports > Display > Corporate action) 3

b The branch is informing the customer about the Rights/Buyback issue for the shares he holds with Angel as per the details provided by CSO. Letter to be

taken from the client if interested [ MIS to be maintained on the calls made to

5

clients ]

Check list for Observing the DP process at the Branch

7 DIS 10 0

a Delivery Instruction Slips‐ Originals to be couriered to CSO regularly (DIS pending to be sent to CSO needs to be NIL) Link: http://196.1.115.150 –

depository POA report ‐ DIS Report 3

b

The Delivery Instruction Slip should be dully filled in and signed by all the accountholders and if there is any correction/change in Delivery Instruction Slip, all holders should sign it for corrections in all the relevant places. Date

and time stamp, initial is affixed on original & client copy

2

c DIS is scanned and forwarded through Crossnet (Link: http://196.1.115.150 >

Depository Participant > Settlement> Slip Scan) 1

d

Check availability of the DIS book at the branch and how proactively the branch exec calls the customer to get the signatures and get the forms filled up. (branch should confirm/acquire mobile/contact number of the customer when accepting such request) (Link: http://196.1.115.150 – depository POA

report ‐ Slip stock)

1

e Availablity of "Best effort stamp" & awareness of off market slip compliance 3

8 DRF process 10 0

a In case of HUF / Corporate accounts, kindly ensure the seal of HUF / Corporate is there on DRF. Verification of name of client in DP A/c & name appearing on

the certificate surrendered for Demat 1

b

Ensure that, the scripts which are eligible for dematerialization are only sent to CSO for further processing. The details of the scrips which are under Demat

are available in Crossnet as well as on www.cdslindia.com (New Link : 196.1.115.150 > Risk Management > D.P. > DRF Inward > List of Vanishing

company)

2

c

Ensure before dispatch, the DRF copies sent to CSO should be filled in completely and signed by all accountholders, also Ensure that the name appearing on the certificate surrendered for Demat should be in the same order as appearing in the DP account. Verify the account holder's signature

with our DP system‐ Crossnet

2

d Inward of the DRF done regularly & DRF details checked. (Link: 196.1.115.150

> Risk Management > D.P. > DRF Inward > DRF Inward Register) 5

9 BCCD CDSL Compliance requirement (5 marks each for process owner and

back‐up) 10

10 Inward/Outward Register & POD's maintained for Documents forwarded to CSO/Client and Hand Delivery of DIS Booklet/DRF/AOF given to Clients (CDSL

Compliance requirement) 10

11 Others 10 0

a Process Training & Test 1

b Back Up ‐ name of the employee 2

c DP Agreement between Sub‐Brokers using Crossnet ‐ (Sub‐brokers &

Franchisee) Compliance 1

d Client ID mapin proof /Modification request details record maintained with

the branch 1

e DP‐Settlement training provided to SB's/Clients on usage of back office utilities

and reports 5

12 DP Service Board 3

13 DP E‐statements promotion (ratings as per no. of clients registered) 5

Total 100 0

Grades Scores

A + 90 to 100

A 80 to 89

B+ 70 to 79

B 60 to 69

C 51 to 59

D </= 50

(Updated on 17/11/2008)

Help lines:

Name Department Location Contact No.

Mr. Saurabh Bhoot AVP – DP Settlement Akruti 2835 8800 – 390

Mr. Vilas Naram Asst Manager – DP Settlement

Akruti 2835 8800 – 551

Mr. Jagannath K DIS Akruti 2835 8800 – 583

Mr. Dipak Sawant DP Akruti 2835 8800 – 580

Mr. Nilesh P DRF Akruti 2835 8800 – 581

Mr. Anil Lolap Pay‐in Akruti 2835 8800 – 565

Mr. Nitin H Pay‐out Akruti 2835 8800 – 562

Mr. Pradeep M Auction Akruti 2835 8800 – 552

Mrs. Bharti Kambli Collateral Akruti 2835 8800 – 560

Mr. A. Arockiam Corporate Action Akruti 2835 8800 ‐ 205

Mrs. Aparneswari N Asst Manager – QA Premier House

30817400 – 290

_____________________

CHAPTER – VII Banking Operations

CHAPTER COVERAGE

1. Introduction

2. Banking operations at branches

3. Cheque bouncing procedure

4. Essential reports to be viewed by the branches

5. Process for requesting for a pay‐out

6. The Bank Reconciliation Policy

7. The policy for Inter Segment Fund Transfer

8. Exhibits related to banking

9. Annexures

10. Banking Checklist

1.

2.

Introduction

The ensuing pages contain a list of procedures which should be followed by the Branches in relation to Banking Operations. The employees of the Branches are expected to ensure compliance with these laid down procedures.

Any deviation from the laid‐down procedures would require prior authorization of the Head of Operations ‐ CSO.

In order to ensure compliance with these procedures it is paramount that the employees of the branch understand the functioning of the Back office software, with reference to banking operations.

Hence we also present herewith the functioning of Web‐enabled Centralized Software, which would help in ensuring compliance with the procedures.

The various steps by which a Branch can access the Web enabled back office Software are also explained.

Every Branch is first and foremost allocated a unique User Id and Password that is private, confidential and distinctive.

The Branch can thus access the Back Office Software at any time desired by it, as the software is accessible 24 Hours a Day, 7 Days a Week.

Banking operations at branches

2.1. Bank account opening:

In case local branch of existing bank is not present in the area of Angel’s branch, then that branch should recommend local Bank having strong presence in their location, co‐ordinate the account opening process with Bank and CSO to ensure speedy opening of the Account.

2.2. Collections:

On receipt of Cheques from Clients/Sub‐brokers: • Ensure that Client Details have been mentioned at the back of the

Cheque. • Promptly pass receipt entries in the system for Cheques received ‐ as

per Exhibit A.1 to A.8. • Duly number the Pay‐in Slip and save it date wise. (On request from

the CSO, promptly submit a copy of the same.)

• Bank Cheques in High value clearing, wherever applicable. • Promptly deposit the Cheques in the Bank. (Cheques received from

clients should be deposited only in Client Bank account).

• Ensure that Post‐dated cheques & Blank cheques from clients are noted separately and reviewed by a responsible person. The same should be kept under lock and key.

• Ensure that all 3rd party cheques received are backed up by the necessary authorisation – as per Annexure 1

• For Pay Orders, verification is required to see if they are made from client’s account only.

Instruct Sub‐brokers, who are directly depositing Cheques in the Bank, to promptly intimate the Branch (Annexure.2) of the same, and submit the deposit slips with the branch or e‐mail the details in prescribed format

2.3 Online funds Pay –In

What is online funds pay‐in:

Client logs into Angel Website à goes to Funds – Funds Pay In à Enters Amount à Selects Segment à Submits à Selects bank where he has a/c from drop down à Submits à Logs into bank internet site using his ID/Pwd à Continue/Confirms transaction à Acknowledgement of payment from Angel website. Process at CSO:

Every 15 minutes pay‐in banking team downloads client fund transfer data and posts the entry in client ledger. In case of query/issue, CSO will coordinate with vendor and resolve the issue. Benefit to Angel:

1. Money comes into Angel real time – there is no cheque deposit/return, clearing time,

cost of collection etc 2. Credit is given to customer real time 3. There is no Reversal issue for the client

Process of Online funds Pay –In

1. Customer logs into Angel Web site 2. Clicks on E‐Broking 3. Clicks on Back Office

Click on “Angel Broking Ltd” (for example, other segments can also be clicked to get into relevant screen)

Enter User Name & Password

Click on Funds – Funds Pay‐In

Enter Amount

Select Segment from drop down

Select Bank from drop down where client has his/her bank account

***We currently give this facility to the clients having accounts with the 11 banks listed in

the drop down. More banks would be added in due course.

Select Bank and Click on Submit

You are re‐directed to selected bank web site

Enter Customer ID/ Internet banking user ID

Enter IPIN/ Internet banking password

Click on ‘Log In’

Select Bank account from drop down

Click on ‘Continue’

Check Pay‐In details

Click on ‘Confirm’

You are re‐directed back to Angel web site for acknowledgement of payment which can be saved/ printed for records

***Please wait for the above acknowledgement screen shot to be displayed since this completes the transaction

In case of Cheque Return of Party:

• Prepare list of Client‐Wise Cheque Returns and monitor the recovery. • Follow “Guidelines to deal with cases of Clients defaults” as per Branch

Compliance Manual.

Squaring ‐off process, where collections are not coming‐in, to be adhered to, with proper procedures and documents.

Where clients are maintaining a running account, it should periodically reach zero level. Monitoring required.

Monthly confirmation of running account must be obtained from clients.

2.4. Bank reconciliation:

In case a Branch has authority to make entry in the Bank Book, ensure that: • Bank Books have been updated daily. • Bank Reconciliation has been completed daily. • Queries/Pending issues on Bank Reconciliation has been resolved promptly

and pending queries followed up promptly. • In respect of Local Bank:

All bank statements up to previous month have been received / collected from the Local Bank, preserve copy at branch and promptly submit original to CSO.

Check ‘Suspense Reco’ in Back office daily, follow up and update Client details for Cheques deposited by the branch /sub‐broker and the entries lying in the suspense a/c due to some error.(Exhibit. D.4 to D.6)

Ensure compliance with Internal Circular on Bank Reconciliation Policy.

2.5. Payments:

Ensure that the payout is marked only after ascertaining clients’ risk & position.

Ensure that all marking for pay‐out of funds is done within the stipulated time, i.e. 10.00 am to 1.30 pm (for pay order /DD) and 10.00 am to 2.30 pm (for cheques and manual requests).

Branch should ascertain clients’ risk & position before payout cheques are to be released / delivered.

On receipt of Client’s payout Cheques from Banks/CSO, hand over to the clients/sub‐brokers as soon as possible.

All stale cheques have to be cancelled and promptly sent to CSO.

2.6. Online funds Payout for clients having accounts with HDFC & ICICI

Salient features of online payout:

Reduced time of credit of payout amount – clearing time eliminated Client need not go to the bank to deposit payout cheques Extended time for marking payout – up to 4.30 AM for same day credit Client can mark payout at his convenience Online Acknowledgement of payout marking Acknowledgement on email on payout marking and also in case the payout amount has changed due to position taken by client post marking payout

Completely automated process Branch need not prepare and send excel sheets in specific formats for online transfers of payout

2.7. Inter Segment Fund Transfer:

Send Fund Transfer requests to CSO via E‐mail/Fax in the specified format (Annexure.3), ensure CC has been sent to RM, Accounts and relevant Branch Head.

Fax/Courier duly signed Consent Letters (Annexure.4) to the CSO for Fund Transfer requests above Rs.300,000/‐ and for transfers within Family member accounts.

Preserve all original Consent Letters at the Branches, so that the original copy can be retrieved whenever required.

Ensure Compliance with Internal circular on Inter Segment Fund Transfers.

3. Cheque bouncing procedure:

Legal notice to a client, for a cheque bouncing case, is sent from the Legal Department at CSO. For a Legal notice to be sent, the following steps are to be followed:

The Cheque and the Bank memo in original have to be sent to the Legal Department, CSO.

If the cheque is already with CSO, proper instructions along with all details of the client and the cheque have to be sent to CSO.

The Legal notice has to be sent within 30 days of Bank memo.

In case the memo has become more than 30 days old, the cheque has to be presented again in order to get a fresh Bank Memo.

The branch has to inform CSO about the progress made with the client after issuance of the notice. Also, a legal case will be filed in the courts only after the branch has requested for the same.

4. Essential reports to be viewed by the branches

4.1. Accounts Reports:

i) Cash Book: To view the petty cash entries pertaining to respective branches(Exhibits B.1 to B.3)

ii) Bank Book: To view the collection/payments made by/to clients for each individual Branch. (Exhibit. B.4)

iii) General Ledger: To view the SB/client deposit (05/30 series respectively) for each individual branch. (Exhibit B.5)

4.2. Party Ledger:

To view the details of the transactions done by the clients i.e. collection, payment, bills and JV’s (for each individual branch). Refer exhibit B.6

5. Process for requesting for a pay‐out

There are two methods for requesting for a pay‐out:

i) Through CMS: The branch can mark a pay‐out request through the link ‘cheque pay‐out marking’ under the RM link (Exhibit C).

ii) Manual Request: This request should be made in the format given.

(Annexure 5)

iii) Online funds Pay out for clients having accounts with HDFC & ICICI Bank:

Salient features of online payout:

Reduced time of credit of payout amount – clearing time eliminated Client need not go to the bank to deposit payout cheques Extended time for marking payout – up to 4.30 AM for same day credit Client can mark payout at his convenience Online Acknowledgement of payout marking Acknowledgement on email on payout marking and also in case the payout amount has changed due to position taken by client post marking payout

Completely automated process Branch need not prepare and send excel sheets in specific formats for online transfers of payout

Process of Online funds Pay –out

• Customer logs into Angel Web site • Clicks on E‐Broking • Clicks on Back Office

Click on “Angel Broking Ltd” (for example, other segments can also be clicked to get into relevant screen)

Enter User Name Enter Password

Go to “Funds”

Go to “Funds Pay‐Out”

Mark payout in eligible segment

Click on “Payment Mode: By Funds Transfer”

Registered bank Account number will be displayed automatically in the drop down

Select registered bank account number and click on “Submit”

When the customer is marking payout for the first time using online mode after registration of account number by Payout team at CSO, above verification screen will be displayed

Client has to enter the bank account number for which he has requested registration to CSO for verification

Enter Account number requested for registration

Click on “Submit”

In case the account number requested for registration and the account number entered by the client in the verification box matches, this pop up will be displayed

Client has to verify the payout marked by him segment wise and click on “I Accept” for payment processing by Angel or “Reject” for non processing

On clicking “I Accept”, the above acknowledgement screen is displayed which the client can “Print” for records

In case the client is not registered for online payout mode, the above screen will be displayed on clicking Funds Funds Pay‐Out The client would need to send cancelled copy of cheque/copy of bank statement from the HDFC or ICICI account that he wants to register for payout.

The document can be sent either as a scanned image to [email protected] with the subject line as : <Client Code> ‐ Cancelled copy of cheque/bank statement for payout through online funds transfer registration.

Alternatively, physical document can be sent to Payout team at CSO‐Akruti

Please Note:

Currently online payout mode is available only for clients having bank accounts with HDFC & ICICI Bank

Clients who have registered HDFC/ICICI bank accounts at the time of account opening will by default have these accounts in the drop down when they login for the first time. An automatic pop up will be displayed for them to verify this account number, in case the account number is incorrect, they need to send a cancelled copy of cheque/copy of bank statement to CSO in hard or soft copy for registration. In case wrong account number is verified, the payout would be rejected by the bank.

Marking done till 4.30 AM will be processed on the same working day by around 1.00 PM

Marking done from 4.31 AM onwards will be processed the next working day by around 1.00 PM

In case a client is registered for online payout, the credit would go into respective ICICI/HDFC account even if branch marks payout for the client. Cheque would not be processed for such clients

For activation of online payout facility, the client has to send a copy of cancelled cheque/copy of bank statement from his HDFC/ICICI account to payout team at CSO either by email or by post/courier (refer instruction on payout screen shot on previous page). Email needs to come from the registered email ID of the client in KYC records. In case of bank statement, address must match with our KYC records

For deactivation also, he needs to send a email/written request to payout team at CSO with reason for deactivation

In case of multiple HDFC/ICICI bank accounts, all such registered accounts will be displayed to the client on the payout marking screen on clicking Payout mode: By Funds transfer

In case the client has registered multiple HDFC/ICICI bank accounts with Angel for online payout and the branch marks payout for such a client, the payout amount by default would go to the bank account in which the client took the last payout himself using online mode.

6. The Bank Reconciliation Policy

Please Refer To The Bank Reconciliation Policy – Internal Circular As Below

Dear All,

As you are all aware of the problems faced by most of the branches, as well as sub brokers and ultimately by the client, concerning reversal of the Cheque receipt entry, due to non receipt of credit by us in the bank account. We reverse the cheque receipt entry after 7 days if we do not receive the credit in the bank account. This may occur because of the following reasons:

Cheques deposited in a particular segment, but entry passed in another segment.

Cheques deposited in a particular bank, but entry passed under another bank’s code. In case of combined cheques deposits, where we deposit more than one cheque in a single slip. In this case, we get single credit in the bank for all the cheques deposited in that slip and we are unable to assign the credits to different clients.

Cheques entries are passed in the books without depositing the cheques into the bank.

Mentioning the incorrect details in the pay‐slip while depositing the cheques, like incorrect Account Number, Company Name etc.

Error on the part of the bank to provide timely credit.

In all these cases, as mentioned earlier, either we will not receive credit in the same segment, or will receive credit in another segment, or we will not receive the credit at all, or the bank may hold it in its suspense account for lack of appropriate details.

To avoid these cases, we have provided one link in our Inhouse System (Risk Management link) section, Accounts Utility ‐> Bank Reconciliation ‐> Reco > 5 days; in this link we can see the pending entries for which we have not received the credit for more than 5 days in the Bank. In that link there’s also one option called Remarks, to put the necessary remark. After the remarks have been entered, at CSO we will give the necessary effect to the respective entries.

As a matter of Policy, CSO will reverse the entry after every Sixth Day from the date of entry, if we do not receive the credit in the bank or no proper remark has been given in the Bank Reco Link. For e.g. In Bank Reco report dated 05/10/2008, we can see the cheques deposit entry till 04/10/2008. Any entry pending for more than 5 days i.e. till date 30/09/2008, has to be checked and accordingly remarked on by 04/10/2008. On 05/10/2008, after verifying the remark, CSO will give the necessary effect and CSO will reverse the entry in case of no Remark.

However following points are to be noted:

Since the link is updated and available for you to view at any time, no further communication will be sent to the branches or to the sub broker for reversal of entries either by E‐mail or Telephone.

All client queries in this respect have to be handled by the Branches only.

In case of Outstation cheques, relaxation of another 5 days will be given.

Also ensure that you get acknowledgement from the Bank on the Pay‐in Slip copy, which aids us in taking up the matter with the Bank in case of any issue.

Hope this will be agreeable to all and we expect your kind Co‐operation in this procedure.

7. The policy for Inter Segment Fund Transfer

To,

The Branch Heads / Channel Partners/Sub Brokers

Dear Sir,

Sub: Inter‐Segmental Fund Transfers

This is with regard to the procedure to be followed for Inter‐Segmental Transfer of Funds. Henceforth, all are requested to follow the procedure mentioned below:

A ‐ For Transfer over Rs.3, 00,000/‐ :

The request has to be sent as per the branch request format (attached) by email, to RM and Accounts, with a copy marked to the Branch Head.(Annexure 3)

The copy of consent letter from the client, in the specified format (attached), has to be sent separately i.e. faxed or couriered (Annexure 4). The same has to be duly signed by the client and approved by the Branch Head.

B ‐ For Transfers below Rs.3, 00,000/‐ :

The Branch requests forms, if sent by e‐mail, have to mark to the RM with a copy to Branch Head.

The Branch requests forms can also be faxed to Accounts.

Other points to be noted:

All originals are to be preserved at the Branches, so that the original copy can be retrieved whenever required.

Before forwarding the request to the CSO, please ensure that the requests are properly dated and signed by the client. Please verify the signatures if possible.

Care is to be taken that only credit balances will be transferred and, further, that the transfers do not result in a debit balance.

Care should be taken to see that there is some logical basis for the transfer requests, i.e. say, either the entire credit is transferred against the debit balance in the other segment, or credit available to the extent of the debit in the other segment should be transferred or a round figure should be transferred from one segment to another.

Please send requests of funds transfers of clients mapped to your branch only. All are requested to take cognizance of the aforesaid.

Thanking You,

For Angel Broking

Head – Operations

8. Exhibits related to banking

Angel Back‐Office:

Exhibit A.1

To begin with, Branch should access Angel Back office by going to our Web Site at www.angelbackoffice.com. (Exhibit A.1)

Select the relevant Company, e.g. Angel Broking Ltd, for the purpose of logging into the system.

User Login:

Exhibit A.2

On selecting the Company, the screen is opened. (Exhibit A.2)

Enter the distinctive User Id and Password allotted to the Branch, in order to view the next screen.

(Please note: Viewing rights shall be restricted to those allocated to the Branch)

BSE Capital Market Back – Office:

Exhibit A.3

On entering the User Id and Password, the above screen is displayed. (Exhibit A.3)

This is the main screen through which all subsequent Reports/Masters can be accessed, depending on the rights allocated to the Branch.

Voucher Entry:

Exhibit A.4

In order to pass Receipt entries for Cheques Deposited in the bank, select Finance Transactions → Entry Transactions → New Voucher Entry.

The screen as above will be displayed. (Exhibit A.4)

Exhibit A.5

Select the Financial Year by clicking on the Drop Down list as displayed in Exhibit A.5.

Exhibit A.6

Select ‘Receipt Bank’ by clicking on the Voucher Type Drop Down list as displayed in Exhibit A.6

Exhibit A.7

Select ‘Bank Book’ by clicking on the Book Type Drop Down list as displayed in Exhibit A.7

Exhibit.A.8

Enter the Bank Code, A/c code, A/c Name, Amount, and Narration in the Fields as shown in Exhibit A.8

Click ‘Save’ to update the entry in the system.

Account Books:

Exhibit B.1

In order to view the various Accounts Books, select Finance Reports → Display Reports → Account Book.

The screen as per Exhibit B.1 will be displayed.

Account Reports:

Exhibit B.2

Move cursor to Accounts Reports. The screen as per Exhibit B.2 is displayed with 3 options: Cash Book, Bank Book, and General Ledger (GL).

The Branch can select any one of the three options.

Cash Book:

Exhibit B.3

If Cash Book or Bank Book has been selected, enter the A/c code in the ‘From A/c’ Field. On clicking ‘Submit’, the Bank Book/Cash Book is displayed as per Exhibits B.3 or B.4.

Bank Book:

Exhibit B.4

If Cash Book or Bank Book has been selected, enter the A/c code in the ‘From A/c’ Field. On clicking ‘Submit’, the Bank Book/Cash Book is displayed as per Exhibits B.3 or B.4.

Exhibit B.5

On clicking ‘Submit’ in Exhibit B.3, the GL for the selected Account is displayed as per Exhibit B.5 for clients of the respective branch.

Party Statement:

Exhibit B.6

CMS generation report:

Exhibit C

The Payout Marking Screen as shown in Exhibit C can be accessed through ‘Risk Management.

The Branch can mark the Payouts by entering the relevant amount in the Payout.

Balance fields for relevant company.

Cheques deposited but not cleared report:

Exhibit D.1

The Branch can view Cheques Deposited but Not Cleared Report through ‘Risk Management’. The screen as per Exhibit D.1 will be displayed.

Click on the Branch Name to view Sub‐broker‐wise Cheques Deposited but Not Cleared Report.

Exhibit D.2

On clicking Branch Name in Exhibit D.1, Sub‐broker‐wise Cheques Deposited But Not Cleared report is generated as displayed in Exhibit D.2

Click on any Sub‐broker Name to view Client‐Wise Cheques Deposited but Not Cleared Report for the selected Sub‐broker.

Exhibit D.3

On clicking Sub‐broker Name in Exhibit D.2, Client wise Cheques Deposited But Not Cleared report is generated as displayed in Exhibit D.3.

Suspense Reco:

Exhibit D.4

Branch should access Sundry Client Reco Report (Exhibit D.4) daily to identify Cheques submitted to CSO for which corresponding credit entry has not been passed.

In order to access Sundry Client Report, select Utilities → Utility Services → In house Report → Suspense Reco.

Exhibit D.5

Enter From – To date, From – To Branch and Click on Show Report. Screen as per Exhibit D.5 will be displayed.

Identify the entries relevant to the Branch, and click on the corresponding Voucher Number.

Exhibit D.6

On clicking on ‘Voucher Number’, the screen as per Exhibit D.6 will be displayed.

Fill in the relevant fields and Click ‘Save’.

9. Annexure 1

Format of authority letter for receipt of 3rd party cheques

From:________________________

_____________________________

_____________________________

_____________________________

Date:____________

To,

Angel Broking Ltd.

Angel Capital and Debt Market Ltd.

(Cash & F&O Segment)

Angel Commodities Broking Pvt. Ltd.

(Member of MCX and NCDEX)

Dear Sir,

Sub: Authorization letter (third party cheques)

Ref: Client Code ______________ Name of Client _____________________________

With reference to the above Trading Account maintained by the above‐named client with you, and with reference to the payment obligations to yourselves by the said client, I/WE hereby remit an amount of Rs. ___________________ vide cheque no. _________________drawn on _____________________________________________ [Bank] dated ______________favoring _____________________________________, with my/our full consent and express knowledge that the said amount would be utilized by yourselves against debit balances of the above named client. I/WE would have No objection and hereby authorize you therefore. I/WE also agree that I/WE do not have any right or claims against yourselves on this account.

Thanking You,

Name and Sign.

(of the third party)

I/WE agree to the above and request you to accept the remittance towards the debit balances in above numbered trading account

Thanking You,

Signature:

Name:

Client Code:

Annexure 2

Format for cheques/DDs to be deposited (client pay‐in of funds)

Company:

Bank :

Date :

Pay Into The A/c Of :

Drawee Bank Cheque No. Amount Party Code Party name Segment

Annexure 3

Inter Segment Fund Transfer:

Branch Request Form

Note: In case of Family Transfer only.

Date:

To,

Angel Broking

CSO,

Mumbai

Sub: Inter‐Segment Funds transfers

Dear Sir,


Sr No From Code

Name of client

To Client

Code

From

Segment

To

Segment Amount

We are sending separately the authority letters received from Clients for amounts over Rs.3, 00,000/‐.

Thanking You

For Angel Broking,

______________ Branch ________________ ______________

Prepared By Approved By

Branch Head

Annexure 4

Consent letter format

Date:

To,

_____________ Ltd.

G‐1 Akruti Trade Centre,

Road No. 7, MIDC,

Andheri East, Mumbai 400 093

Sub : Request for Transfer of Funds from _____ Segment to _____ Segment.

Dear Sir,


__________) by Rs._______________(Rupees___________________

________________________________) in the ____________________

_________________________________ Segment and credit ledger account

Mr./Mrs/M/s_____________________________________________________

____________________ (client code___________) by the same amount in the

_______________________________ Segment.

I/We hereby understand that the said amount would be debited in my /our Ledger account and I/We hereby confirm that we will have no claim whatsoever from the Company as the same has been done only on my/our express authority.

Thanking you,

Signature : _______________________

Name : _______________________

Client Code : _______________________

Annexure 5

Format of manual pay‐out request:

Annexure 6

Family Transfer format

Date: DD/MM/YYYY

To,

Angel Broking

CSO,

Mumbai

Sub: FAMILY JV

Dear Sir,


FROM TO FROM TO

Sr No

Client Code Client Code Segment Segment Amount

1

Kindly do the Needful.

Thanking You

For Angel Broking,

_ _ _ Branch ____________

_ Prepared By Approved By

Branch Head

Annexure 7

Family transfer Consent letter

Date:

To,

Angel Broking Ltd

G‐1 Akruti Trade Centre,

Road No. 7, MIDC,

Andheri East, Mumbai 400 093

Sub : Request for Transfer of Funds to Angel Broking Ltd

Dear Sir,

I/We hereby request you to kindly debit my/our ledger account (client code __________)

by Rs. _______________ Rupees_____________________________________________

_____________ ) in the Cash Market Segment / F&O Segment and credit my ledger

account / ledger account of my Family member Mr./Mrs/M/s

_____________________________________________________________ (client

code___________) by the same amount in Angel Broking Ltd.

I/We hereby understand that the said amount would be debited in my /our Ledger

account and I/We hereby confirm that we will have no claim whatsoever from Angel

Capital & Debt Market Ltd as the same has been done only on my/our express authority.

Thanking you,

Signature:_______________________

Name:__________________________

Client Code:_____________________

Relation with Client : _____________________

10. Banking Checklist

Banking Checklist

Sr. Activity Weightage

1 Are branches following collection process laid down

10

a Client details on reverse of cheque/Client

code on CMS deposit slip 2

b

Mention correct segment in deposit slip/cheque and also pass entries in the

correct segment in BO 2

c Store pay ‐ in slip date wise. 2

d Deposit cheques in high value wherever

applicable. 2

e Is the branch making entries in BO on the same day of receipt of pay in cheques 2

2

Are clients making direct deposits (if yes then zero, if no, then are the entries being made in BO on submission of stamped deposit slip by bank either physically or scanned images

5

3

Are SBs sending original deposit slips to Branch on daily basis (For remote location SBs it is on weekly basis)

5

4

In case of non CMS banks, is the option of 'at par' cheques from nationalized banks being deposited in CMS been tried. Is the option of putting odd figures tried

5

5

In case of cheque return, is the branch following guidelines to deal with defaulting clients

5

6 Reconciliation 10

a Is bank reco done daily (incase Reco is

handled by Branch) N/A

b

Are they resolving pending queries and following the reconciliation policy? (Reco >

5 days Link) 10

7 Does the branch follow cut off time for

payout marking 10

a 10:30 am to 1:30 pm ( Pay order / Demand

draft) 5

b 10:30 am to 2:30 pm (Cheque / Manual

instructions) 5

8 Is the branch updating payout verifier link

in RM before 11.30 am 5

9

Is the branch maintaining client acknowledgement for delivery of payout

cheques 5

10

Is the branch informing and retaining records for such information for return cheque details to the RM department at

the branch 5

11

Is the branch checking for client risks real time before delivery of payout cheques (in cases where the client does not collect the

payout cheque on date of issue) 5

12

Is the branch promoting online funds pay in using Angel web site and online funds payout to clients having accounts with

HDFC & ICICI Bank 10

13 Are they maintaining original consent

letters in case of Family Transfer 5

14 Inter‐segment Fund Transfer (ISFT) ‐ are

they following guidelines 10

a

ISFT requests to CSO their mail / fax in the specified format ‐ ensure cc to RM / Banking

/ Branch heads 2

b For 3.0 lakhs and above are they sending

duly signed consent letter 3

c Are they maintaining original consent letters 3

d Are they ensuring compliance with internal

circular on ISFT dated 22/11/05 2

15 Process Test & Score 5

16 Other Details

a

Did the person handling banking in the branch receive initial training or was he/she covered under VNC session.

b Is the branch referring to Branch Process

Manual in case of doubts

c Does the branch have back up staff for

banking

Feed Back or Suggestions for CSO

Total Score 100

Helplines

Contact Person Designation Location Tel no – Extn

Mr. Bhavesh Raichura Manager –

Operations

Akruti (022) 2835 8800 ‐ 106

Mr. Maheshkrishnamoorthy VP ‐ Operations Akruti (022) 2835 8800 ‐ 460

Mr. Hitesh Thakkar Sr. Executive ‐ QA Prem. House (022) 4035 8600 ‐ 282

CHAPTER – VIII Investment Advisory Desk

CHAPTER COVERAGE

1. Introduction – Investment Advisory at Angel

2. IAD: Pre‐Market Activity

3. IAD: Market Time Activity


5. Other activities

6. Certifications

7. Reading Research reports, sector reports, event updates

8. IAD Checklist

1. Introduction ‐ Investment Advisory at Angel

Investment Advisory Desk (IAD) is a unique initiative of Angel to bring Investors and our Research Services together. IAD assists investors in investing in fundamentally good companies with a long term horizon in mind. IAD is the face of Angel to its investors whereby it assists them in achieving their investment objectives. It is a service to guide investors in all the ups and downs of the market. All the investment‐related queries of the clients are solved through this channel. It also works as a feedback mechanism for the Research Team.

Investment Advisory Process Chart

The main functions of the Investment Advisory are:

Advice ‐based broking business model.

A timely flow of information from the research team to the clients.

To advise Investors regarding fundamentally good companies keeping long term horizon in mind.

To help clients understand Macro Economic trends and Sectoral / Company specific developments

Solving investment related queries of clients on mail, messenger & telephone.

To help clients in portfolio restructuring based on sound in‐house research.

To keep dealers, sub‐brokers, marketing people, branch manager & clients updated on daily market outlook.

Regular Investment Seminars / Portfolio Restructuring Camps to educate investors about the benefits of long term investment in equities to create wealth.

Helps clients in minimizing risk and maximizing returns.

IAD Manual for Branches

2. Pre Market Activity

Reading Business News paper , Technical Report, Market Outlook, Derivative Report, Weekly review :

This activity should be of prime importance for any advisor & should not be ignored in any circumstances as the advisor needs to be updated on a daily basis. Reading business dailies like The Economic Times, Business Standard, Business Line, Financial Express etc. should be the first activity after coming to the office. Also keenly following the global market updates via any media like television, internet should also be a critical part of the job. One should also read everyday reports of Angel like Market Outlook, Technical report & Derivative report.

Attending CSO Morning Tele Conference. ( Gujarati Conference for Gujarat Region)

This activity is done by the CSO Advisory team in order to disseminate the fundamental, technical, derivative view for that day’s market by teleconference. All major news, events, global markets updates are discussed & also queries received from branches are solved. This is the Advisory initiative to disseminate our research views amongst the dealers, Advisors, Relationship Managers (RMs) and important channel partners across all branches. The Investment Advisory Desk team reviews the fundamental developments across the world, analyzes the events in the news and co‐ordinates with the Fundamental Research team to evaluate the impact of these events on the various sectors and stocks. After this analysis, these views are circulated amongst the branches through a tele‐conference. The Technical Advisory team presents their opinion about the market for the day. Derivatives views are also communicated in this conference. At the end of the conference, an Advisor addresses selected queries from branches. The queries are received from the branches on the previous evening. The aim of this conference is to ensure that all Angel employees have the standardized official view of Angel Research on the developments in the markets. Besides, it also educates the employees by helping them understand how various events affect the valuation of a stock.

The English teleconference starts at 9.20 Am everyday (Monday to Friday) & ends at 9.30 Am.

There is also a Gujarati teleconference which is conducted specially for the Gujarat region from 9.30 Am to 9.40 Am.

The objective here is to disseminate the information in a standardized way across all the angel branches & the same is expected of the Advisor, when he communicates these ideas to clients & channel partners. The Advisor has to join this teleconference every day & has to take care of this dissemination of information.

Explaining the morning conference discussion, news, events etc. in detail to the RM and Dealers.

The Advisor can ensure that dealers be present in this teleconference, so that dealers, who are normally the first point of contact for the clients also are thoroughly updated about the news, events, views of the respective departments. Also he could, after the teleconference explain to the Dealers/RM’s anything that they would not have understood & also discuss if possible some more news that he would have himself read.

3. Market time Activity

Promoting Angel Top picks Weekly Report and Other daily reports to the clients, sub‐brokers and Employees. ‐ 1) By mailing these reports. 2) By Telephonic Conversation 3) By Client Meet

Investment Advisory Desk sends the morning reports, including the Market Outlook, Technical Report, Derivative Report and the Derivatives statistics to the various employees, clients and channel partners. These reports are received from the respective departments or culled from the Angel Back office and then forwarded to the recipients mentioned above.

The Advisor at the branch has to make his own folders in the mail box to disseminate the reports send to him by the CSO Advisory. He should then send these reports to the recipients, which may consist of the direct clients, Sub brokers, sub broker clients, prospective clients etc.

He should also send Angel Top Picks to his set of clients, which is a weekly document, prepared by CSO Advisory & also aggressively promote these stocks. IAD also flashes regular calls to clients, recommending them to buy a stock that is one of the Angel Top Picks. These calls are flashed on ODIN, Pandion and also sent to some clients through SMS. The aim of this activity is to give guidance to clients so that they may buy fundamentally sound companies to build a strong portfolio.

Also, he should be responsible for sending Research reports, weekly report, IPO note or any other reports like Result Updates, Sector report etc to his set of clients. Also periodic meetings with the clients should be taken up by the Advisor to discuss his portfolio & advise accordingly.

Clients have a number of queries regarding the fundamentals of stocks, corporate action in a stock, advice on building a portfolio, impact of particular news on a stock etc. This should be done during the market hours

Passing Fundamental Calls, Technical Calls & Derivative Strategies to Clients &Sub‐brokers

Once the market starts he should be in charge of guiding clients, RM’s, dealers on Angel’s view, & promoting Angel Fundamental calls, technical calls & derivative strategies. He should call up clients & sub brokers depending on their respective profiles & guide them accordingly. The stress should be put on promoting only Angel calls & for technical calls, he has to always mention stop losses & target.

Client profiling using CRMS Software & Back office. Communicating with clients and Mapping them to dealers

He should be given the task of profiling the clients as to whether the client is an investor, trader or an investor‐trader & accordingly should be authorized to map the clients to a an appropriate dealer.

Activating Dormant Clients.

Normally a branch has a lot of dormant clients. It should be an important part of the Advisor’s job to activate dormant clients. Again if dormant clients are activated the credit should be given to the concerned person else the credit will go to the dealer who just executes the trade .Hence dormant clients need to be mapped under Advisory person or proper record of the same needs to be maintained.

4. Post Market Activity:

Meeting prospective and existing Clients after market hours and explaining them various investment strategies, stock updates etc:

The marketing team can bring in prospective clients to the Branch Advisor & the advisor inturn can interact with the client, help him in guiding on his portfolio, can also send his portfolio to the CSO for restructuring. In this way, the prospective client could be converted into a new client & Advisor can share the credit with the marketing team.

He can also arrange to meet existing clients & discuss various investment strategies with him, assist him in buying & selling of securities.

Evening Interaction with Dealers and Relationship Manager regarding market news and daily calls.

This would help in analyzing the success ratios of the calls, views given on that day & act as a feedback mechanism. It would also be a value adding initiative as a lot of important queries could come in from the dealers/RM’s which could be forwarded to the CSO Advisory.

5. Other Activity:

Attending audio conference on Fortnightly Presentation, conducted by CSO Advisory:

This teleconference is again hosted by the CSO Advisory team & the purpose is to explain the PowerPoint presentation that has been prepared for the fortnightly Advisory Seminar at the branches.

The Branch Advisor has to join this conference, try to understand it thoroughly & should note down some important pointers for each slide of the presentation. If he still has any doubts, he can revert back to the CSO Advisory for clarification.

Conducting fortnightly presentation at branch on Saturdays and Making MIS of fortnightly Presentation and queries for morning conference:

This is another activity that goes to promote our Research views amongst our employees and clients. The IAD team at the CSO prepares a presentation pertaining to the current market scenario. This presentation contains topics and themes that are relevant to the existing market environment. They also include concepts that are in the news but are not very well understood by the general public, e.g. the sub‐prime crisis.

This presentation is given by an assigned person at the branch to the clients. These clients are invited to attend the presentation by the branches themselves, well in advance. These presentations are conducted on every alternate Saturday. They serve a number of purposes. They educate the clients, provide them with another personalized value‐added service and at the same time, educate our own employees. They also provide these Advisors an exposure to public speaking, thereby improving their own skills. This activity also improves the knowledge level of the Advisor & also he has to be remain updated about the queries which the clients come up with. He can forward these queries, if required, to the CSO Advisory, which inturn can be solved by CSO Advisory in the morning teleconference.

The Advisors also have to prepare the MIS of the Clients that have attended the presentation which consists of Client Name, telephone number, Client code (If existing) & send it to the CSO Advisory

Sending client Portfolios to CSO for Restructuring:

An important function of the Investment Advisory Desk is to restructure the clients’ portfolio. This is a value‐added service offered to clients completely free of cost. Clients, who wish their portfolios to be restructured, send it to the CSO Advisory through the Branch Advisors or Dealers. The IAD team analyzes the existing portfolio and gives its recommendations on individual stocks. These recommendations are based on the view of the Fundamental Research team. Various other things are also kept in mind while restructuring of a portfolio. For example, the portfolio should be well diversified and yet not have too many scrips, there should not be too much exposure to a single scrip or sector etc. While giving a recommendation to buy particular scrip, the impact on the rest of the portfolio also has to be borne in mind. Thus, portfolio restructuring is one of the most important and complex function of the IAD team, aimed at providing the clients full value for their association with Angel.

6. NCFM: The Advisor should at least clear Cash market & Derivative market NCFM module.

7. Reading research reports, sector reports, event updates etc: Reading would be one of the most important aspects of the job. Importance should be given for reading research reports, other reports & keeping oneself always updated about the current market scenario on a proactive basis.

Investment Advisory Checklist

Sr. Activity Activity Timing Status Remarks

1 Pre Market Activity

A Attending CSO Morning Tele Conference. (Gujarati Conference for Gujarat Region)

9.15 A.M to 9.30 A.M

B

Explaining the morning conference discussion, news, events etc. in detail to the RM and Dealers.

9.30 A.M to 9.35 A.M

2 Dealing Market Activity

a

Promoting Angel Top picks, Weekly Report and Other daily reports to the clients, Sub‐brokers and Employees. 1) By mailing these reports. 2) By Telephonic Conversation 3) By Client Meet

As req

b Passing Fundamental Calls, Technical Calls & Derivative Strategies to Clients & Sub‐brokers.

9.55 A.M to 3.30 P.M

c Client Profiling using CRMS Software 1) Communicating with client and Mapin of Clients. 2) Activating dormant clients

9.55 A.M to 3.30 P.M

d Activating Dormant Clients. 9.55 A.M to 3.30 P.M

3 Post Market Activity

a Meeting prospective and existing Clients after market hours and explaining them various investment strategies, stock updates etc.

4.30 P.M to 5.30 P.M

b Evening Interaction with Dealers and Relationship Manager regarding market, news and daily calls.

5.30 P.M to 6.00 P.M

4 Other Requirements

a Attending audio conference on Fortnightly Presentation, conducted by CSO Advisory.

Fortnightly

b

Conducting fortnightly presentation at branch on Saturdays and Making MIS of fortnightly Presentation and queries for morning conference...

Fortnightly

c Sending client Portfolios to CSO for Restructuring.

As req

d NCFM NSE Cash NSE F&O

CHAPTER – IX PortfoIio Management Services

1.

2.

3.

4.

5.

6.

7.

8.

9.

CHAPTER COVERAGE

Why should one invest?

Portfolio Management Services

Portfolio Management Service (PMS) at Angel

Key elements of Angel’s PMS

PMS operational process flow and research domain

Different products in PMS offered by Angel

Benefits which investors gain from our PMS

Fee structure

PMS operational process at CSO

10. Documents necessary for PMS

1.

Why should one invest?

Investment is the process of delaying Current Consumption in favor of increased future Purchasing Power.

One of the most compelling reasons for people to invest is the prospect of not having to work their entire Life.

2. Portfolio Management Services:

Managing a portfolio of Investments can be time‐consuming. If one doesn’t have much time or desire, hiring a professional may be more appropriate.

Portfolio Management Services (PMS) to investors assists them in managing their Investments amidst changing market dynamics and increasing complexities of investing.

Portfolio Management includes : • Personalized Service. • Interaction with Fund Manager. • Regular Feedback and Reports. • Pro‐active Management of Funds. • Holdings not impacted by entry/exit of big Investors. • Can remain liquid (not‐invested) for long periods.

3.

Portfolio Management Service (PMS) at Angel

Angel’s PMS provides Discretionary Portfolio Management Services

Follows a disciplined Investment Process.

Adheres to quality Investments.

Limiting any risks associated with Investments.

Provides low Portfolio Turnover (no trading).

Focus on generating Absolute Returns rather than Relative Returns.

Investment Philosophy : Angel’s Investment Philosophy is based on two important attributes:

• Capital Preservation • Wealth Creation

Our objective, at all times, is to protect and then expand the client’s Portfolio.

4.

5.

Key elements of Angel’s PMS

Bottom‐up Stock Selection.

In‐depth, independent Fundamental Research.

High‐quality companies with sustainable competitive advantages.

Focus on companies with a certain size & scale.

Disciplined valuation approach, applying multiple valuation measures.

Medium to Long‐term vision, resulting in low portfolio turnover.

PMS – Operational process flow

Fig.1

Research Domain

Fig.2

6.

Different products in PMS offered by Angel

The five products offered by Angel’s PMS are:

1) Angel Oyster 2) Angel Bluechip 3) Angel NRI 4) Angel Growth 5) Angel Equity & Derivatives Fund

6.1. Angel – Oyster Bottom‐ up concentrated portfolio, with emphasis on Value Investing.

Objective: To generate Wealth on a consistent basis, rather than outperform by taking higher risk. Early identification of stock, to ride through the entire Investment Cycle.

Investment strategy: A blend of Value and Growth stocks. Ensuring a balanced Portfolio, with a relatively medium risk profile.

Investor profile: Safety of Capital is of utmost importance. The scheme would be suited for Investors having a long term perspective.

6.2. Angel Bluechip: Bottom‐up concentrated portfolio, with Emphasis on GARP (Growth at Reasonable Price).

Objective: The scheme will seek to achieve returns through broad‐based participation in equity markets, by creating a diversified equity portfolio of medium to large capitalized companies.

Investment strategy: Major proportion of large and medium capitalized stocks. Medium capitalized stocks not to exceed 25%. Sectoral exposure not to exceed 25%.

Investor profile: The scheme would be suited for investors with medium to low risk appetite, having long term perspective.

6.3. Angel – NRI Long term upside of the INDIA Growth story, by diversifying across the major themes.

The Angel NRI: NRIs will have to open an NRE / NRO Savings Bank A/c at the appropriate designated branch by RBI. NRIs will have to open a Portfolio Investment Scheme (PIS) Account at the appropriate branch designated by RBI. In order to invest in the Secondary Markets in India, NRIs need to obtain RBI permission.

[Note: Portfolio Investment Scheme(PIS) is a scheme of the Reserve Bank of India (RBI) defined in schedule 3 of Foreign Exchange Management Act 2000 under which the ‘Non Resident Indians’ and ‘Person of Indian Origin’ can purchase and sell shares and convertible debentures of Indian Companies on a recognized stock exchange in India by routing all such purchase/sale transactions through their account held with a Designated Bank Branch.]

6.4 Angel Growth The objective of the scheme is to generate capital appreciation in the medium to long term through investments in equities and equity related instruments comprising of predominantly Mid‐Cap and Small‐Cap companies.

Investment strategy: Focus on growth themes such as Infrastructure, Services, Manufacturing & domestic consumption. Overweight on Mid‐Cap and Small‐Cap stocks. However quality Large‐ Cap stocks may also be considered for investment depending on market conditions. The scheme will seek to achieve returns through broad based participation in equity markets by creating a diversified equity portfolio. The portfolio will however, be overweight on Mid‐Cap and Small‐Cap companies. Combination of Top‐Down & Bottom‐Up approaches. Portfolio to comprise of a combination of growth & value stocks

Parameters Driving Investment Decision: Over‐weight on Mid‐Cap and Small‐Cap stocks. However, quality Large‐ Cap stocks may also be considered for investment, depending on market conditions. Portfolio to comprise of a blend of growth & value stocks. However, the portfolio shall be overweight on growth stocks.

7.

The portfolio strives to limit the exposure to any one sector to less than 25% of the portfolio size.

The portfolio strives to limit the exposure to any one stock to less than 10% of the portfolio size.

Investor profile: The scheme would be suited for investors with a moderate risk appetite. Recommended investment horizon is 15 to 18 months.

6.5. Angel Equities & Derivatives Fund Equities & Derivatives: Objective: To generate moderate returns by deployment into Equity assets and partially hedging the portfolio, using options and futures & achieving this with a margin of safety. Additionally the funds lying idle would be deployed in arbitrage between cash and future and /or placed in low maturity debt funds and low risk F&O Strategies.

Features: Investments would be in fundamentally strong large cap and Mid Cap companies having high liquidity in Options. Partial hedging of open positions would be done by writing options.

Investor profile: The scheme would be suited for investors with low to medium risk appetite, having a long term perspective. Suitable for HNI’s and Corporates, who want to park money for a consistent Return from the market, even if the market remains flat.

Benefits which investors gain from our PMS

Expert and Experienced Portfolio Management Team.

Entry timing for individuals’ scrip's and portfolio construction in phased manner.

No time involvement from your side, while we focus on delivering attractive Risk – Adjusted Returns to You.

Wealth Management Solutions.

Dedicated website to view Portfolio Information.

Quarterly account Performance Statements.

8.

9.

Realized Profit/Loss statement for tax purposes.

Dedicated Customer Service Desk.

Fee structure:

Two part fee structure: The following charges will be applicable.

1. Asset Management Fees: 2.00% per annum on daily average NAV & charged to the account on a quarterly basis.

2. Brokerage: 0.5% per transaction + STT + other charges as applicable.

Performance Fees: No profit sharing Returns calculated after accounting for all charges.

PMS Operational Process at CSO:

Operational Process: Clients fill the PMS ‐ KYC form. Form is verified by the department with all the necessary formalities. Data entered into the back office software. Form sent to the KYC department for the client code generation. After receiving the client code, the buying & selling on behalf of clients is done. Clients’ Welcome Letter is sent, along with the investor’s User ‐ Id & Password, by mail.

10. Documents necessary for PMS

[All documents have to be self attested by clients] For individuals ‐ Indian residents: Address proof Identity proof PAN card copy (all Holders) Latest Bank statements (1st Holder) PMS ‐ KYC form. Demat A/c Proof.

For HUF clients Similar documents as in the case of individuals (Karta’s Name):

Declaration of all members by Karta

For NRI’s NRE / NRO Savings A/c details PIS account details Trading A/c (NSE / BSE) at ANGEL

Demat account proof at ANGEL Passport copy of all the holders Copy of VISA / IQAMA or any other permit PAN card of all the holders.

For corporate True copy of Memorandum & Articles of Association True copy of Board Resolution. (on Company’s letter head) Annual Reports with Profit & Loss A/c and Balance Sheet for last two Years Income Tax Returns for last two Years PAN Card – Company PAN Card – All Directors / Authorized Signatories Latest Bank Statements of the Company List of Shareholders holding ( > 5%) Form No. 32 (in case of change in Directors)

For partnership firm: Certified copy of the Partnership Deed PAN cards (Firm & Partners) Demat proof of the joint dominating partner Bank Statement of the firm & the dominating partner,

For trust: Trust Deed Certificate of Registration Pan Card of all Trustees Bank Proof of Trust Address proof of Trust Income Tax Returns of the trust for last two years.

Helplines

Contact Person

Designation

Location Tel no – Extn

Ms. Lata Gandhi

Assistant Manager–

PMS operations

Acme

(022) 4040 3800 ‐ 308

Mr. Bhavik Zaveri Senior Executive Executive –

PMS

Acme

(022) 4040 3800 ‐ 307

CHAPTER – X Initial Public Offer (IPO) & Mutual Funds (MF)

CHAPTER COVERAGE

1. What are Mutual Funds ?

2. What are the benefits of investing in Mutual funds?

3. Why MF with Angel?

4. Back‐end support: Angel Back office (MF)

5. What is Initial Public Offer or IPO?

6. Hierarchy for an IPO

7. About Angel’s IPO Distribution

1.

2.

What are Mutual Funds?

Mutual Funds are funds operated by an investment company, which raises money from the public and invests in a group of assets (shares, debentures etc.), in accordance with a stated set of objectives.

It is a substitute for those who are unable to invest directly in equities or debt because of resource, time or knowledge constraints.

Mutual Fund is the common pool of money into which investors place the contributions that are to be invested in accordance to the stated objective.

In India, the mutual fund is constituted as a trust and the investor subscribes to the “units” issued by the fund.

Mutual Funds are usually long term investment vehicles, though there some categories of mutual funds, such as money market mutual funds which are short term instruments.

What are the benefits of investing in Mutual Funds?

There are several benefits of investing in a Mutual Fund:

Small investments: Mutual funds help you to reap the benefit of returns, by a portfolio spread across a wide spectrum of companies with small investments. Professional Fund Management: Professionals with considerable expertise, experience and resources manage the pool of money collected by a mutual fund. They thoroughly analyze the markets and economy to pick good investment opportunities.

Diversification: An investor with limited funds might be able to invest in only one or two stocks/bonds, thus increasing his or her risk. However, a mutual fund will spread its risk by investing in a number of

3

sound stocks or bonds. A fund normally invests in companies across a wide range of industries, so the risk is diversified. Professional expertise: Fund managers in mutual funds are professionals who track the markets on a minute‐to‐minute basis. With their mix of professional qualifications and market knowledge, they are better placed than the average investor to understand the markets.

Transparency & Liquidity: Mutual Funds regularly provide investors with information on the value of their investments. Mutual Funds also provide complete portfolio disclosure of the investments made by various schemes and also the proportion invested in each asset type.

Choice & Convenience: The large number of Mutual Funds available in the market offers the investor a wide variety to choose from. An investor can pick up a scheme depending upon his risk/ return profile.

Relatively inexpensive: When compared to direct investments in the capital market, mutual funds cost less. This is due to savings in brokerage costs, demat costs, depository costs, etc.

Flexibility: Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience. These are called Systematic Investment Plans (SIP) and Systematic Withdrawal Plans (SWP).

Regulations: The mutual funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of the investors.

Types and schemes of Mutual Funds

Type of

Mutual Fund Schemes

Structure Investment

Objective

Special

Schemes

Open Ended

Close Ended

Interval Funds

Growth Funds

Income Funds

Balanced Funds

Money Market

Index Schemes

Industry specific Schemes

Sectoral

A) On the basis of Structure:

1) Open‐ended funds: Open ended funds are ones that sell & repurchase units at all times. The Asset under management keeps fluctuating depends on investors buying or selling units. An AMC might stop selling units if the fund size becomes too big to manage. However repurchase of units is done at all times.

2) Close‐ended funds: Close ended funds are one that makes a onetime sale of units. After the offer closes CEF’s do not let the investors buy directly from the fund. To provide liquidity to the investors, these funds are traded in the stock markets. Sometimes the fund house also offers buy backs at regular intervals.

3) Interval funds: These funds combine the features of both open‐ended & close‐ended funds wherein the funds is close‐ended for the first couple of years and open ended thereafter. Funds having fixed dates of buying and sales.

B) On the basis of Investment objective:

1) Growth Funds/ Equity funds: Funds that invest in equity shares are called equity funds

2) Income /Debt funds: These funds invest predominately in high‐rated fixed income‐bearing instruments like bonds, debentures, government securities, commercial paper and other money market instruments

3) Balanced fund: These funds invest both in equity shares and fixed income‐bearing instruments (debt) in some proportion.

4) Money Market funds / Liquid funds: These funds invest in high liquid money market instrument.

C) Special Schemes

1) Index funds: These funds invest in the same pattern as popular market indices like S&P 500 and BSE index

2) Industry Specific scheme /Sectoral funds: These funds invest primarily in

equity shares of companies in a particular business sector or industry.

D) Other Schemes: 1) Diversified funds: These funds invest in companies spread across sectors.

2) Tax saving funds: These funds offer tax benefits to investors under the Income Tax Act Sec 80c.

3) Gilt funds: These funds invest in Central and State Government securities.

4) Offshore funds: These funds facilitates cross border fund flow. They invest in securities of foreign companies. They attract foreign capital for investment.

4. MF Sales process flow

No

Meet the Prospect client

Understand his Investment requirements

Portfolio Recommendation

Form Filling Procedure

Form Submission with AMC

A

A

Provide Acknowledgement

Portfolio Report

Track Portfolio on regular Basis

Suggest changes / modifications

Promote New Investment Ideas

B

Collect the Investment amount and inform him about Entry load to be levied as per the scheme applied for

Investment decision on Consensus Basis

YesConcentrate on other New Investors

Investment more than 50,000.

Fill KYC

Yes

No

5. MF Application form process flow

Mutual Fund Application Form Process Flow (CSO/Branch)

1) Form detail: a) Distribution information: Check for ARN 39242 number (39242 is Angels code)

Mandatory. b) Sub‐agent code will be the employee code.

Folio No.: If a client has already invested in any other fund scheme the same Folio no. can be entered and no need for documents. For fresh Investment all documents need to be enclosed.

2) Application information: Details to be filled accordingly. In case of a minor investor the guardian details are mandatory.

3) Mode of holding: Single/Joint/Anyone or survivor To be ticked accordingly. Cases where more than 1 application detail are filled and the mode of holding is not specified, it will be considered as joint by default.

Yes

No

Accurate forms filled and Documents attached

Enter the RM / Employee Code

Xerox of Form & Documents for Official record

Submit Application Form before Cut‐off Time to AMC

Xerox of the form to be retained and details to be entered in TR entry

Xerox of Application & AcknowledgementCopy to be given to the Client.

Preliminary checks done by Back Office, to ensure all details are entered correctly

4) Status/Occupation: To be ticked accordingly. 5) Application contact information: Address/Contact no. is mandatory. 6) Bank account details: Account detail is mandatory. 7) Scheme detail: To be ticked accordingly. In case if nothing is ticked, growth option

will be by default selected.

Mandatory Documents to be Attached with MF Application Forms

A For Individual clients

1

PAN Card Mandatory for all investments; irrespective of amount (w.e.f. 02/07/07). Joint Applicant’s PAN Card also required. In case of Minor; PAN Details of Guardian should be attached.

In case PAN card is not available; Form No.60/61 or Form No. 49A along with Address Proof is required to be submitted.

2 Cheque/ DD in favor of the Schemes / Escrow Account (details given on the application form) in case of MF and IPO respectively

3

Individual Investor (Investment by POA Holders)

1. Original Power of Attorney duly notarized OR

2. Copy of the Power of Attorney notarized in original by an Indian Notary.

POA document should contain the following details of both the parties to the

document :

a) Name b) Address c) Signature

In case all holders (including joint holders) of an investment want to appoint a single person as the POA, name, address and signature of all the holders, besides the POA holder, should be available in the POA document.

B For Non Individual/Corporate Bodies

1 PAN Card Mandatory for all investments; irrespective of amount (w.e.f. 02/07/07)

2 Cheque/ DD in favor of the Schemes / Escrow Account (details given on the application form) in case of MF and IPO respectively

3 Memorandum & Articles of Association attested copies

4 Board Resolution stating they are authorized to invest in MF units / IPO

5 List of Authorized Signatories whose signature is present on the application form

6

For Non Individual/Corporate Bodies‐ through Power of Attorney,

Original Power of Attorney duly notarized OR

Copy of the Power of Attorney notarized in original by an Indian Notary.


document :

1. Name 2. Address

3. Signature

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Partnership Firms Certified True copy of Partnership Deed by duly highlighting the relevant clause allowing investment in units of Mutual Fund. The certification as “True Copy” should be in original.

In case of investment through Power of Attorney, original Power of Attorney

duly notarized OR

Copy of the Power of Attorney notarized in original by an Indian Notary.

All partners should be executors to the POA and their signatures on POA

should match with signatures on Partnership Deed.


document :

1. Name 2. Address 3. Signature

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Karta of Hindu Undivided Family (HUF) A certified true copy of deed of HUF, original or photocopy originally notarized. A letter signed by all the members to the HUF identifying the Karta of the HUF.

No joint holder is allowed in HUF investment. Such applications to be rejected.

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Banks & Financial Institutions A certified copy of Board / Investment Committee Resolution authorizing the

said investment The resolution should be on the letterhead. If photocopy it

should be attested (in original) by Company Secretary / Director / Authorized

Signatory

A certified copy of list of Authorized Officials to make such investment along with the Specimen signature of Authorized Officials. ASL should be on the letterhead. If photocopy it should be attested (in original) by Company Secretary / Director / Authorized Signatory Certified True copy of Memorandum & Articles of Association / Bye –laws, including certificate of Registration and provision authorizing the entity to invest in securities duly highlighted.

6. Why MF with Angel?

ANGEL CAPITAL & DEBT MARKET LTD. (ACDL) is empanelled with almost all Asset Management Companies (AMCs) to act as a distributor for the mutual fund schemes offered by them. The AMFI Registration No. (ARN) of ANGEL is ARN‐39242 which is required to be affixed on all forms procured by ANGEL, so that the same is covered by the Registrars processing the transactions.

Most Competitive Sharing Structure:

Our Channel Partners are also offered a very competitive brokerage structure for the Mutual Fund mobilizations by them, which is in line with industry practice.

Advisory ‐Based Website:

All the ANGEL Branches have access to the MF/IPO BackOffice Software which can be accessed via the Mutual Funds & IPO link in our Back Office section on Angel website. The User ID and Login Password are provided to all the branches by the CSO.

This service is not limited only to ANGEL Branches, but is also available to the Channel Partners and our most valued End Clients as well.

All the relevant data pertaining to IPOs would be uploaded at the CSO level. The Branches do not have to exercise any function regarding IPOs at their end in the software. The summary of IPOs and the brokerage data of IPOs can be viewed by the branches.

Alternatively, the branches can also access this link via www.angelmf.com.

Login Screen Appears as Below: As soon as the TAG of a branch is created, its corresponding Login ID & Password is created in the MF Back office Software which can be obtained from our Operations Team at the CSO.

Put your login ID & password

4. Back‐ end Support: Angel BackOffice (MF)

The MF BackOffice Software is an important value‐added service provided not only to branches, but also to sub‐brokers and the clients as well.

Access to the Back Office is via the ANGEL website through a user id & password, which is provided to the sub‐brokers and clients by their respective branches.

The module of our Back Office Software for Mutual Funds / IPO is displayed below. All users can access the software via the Mutual Funds & IPO link in our Back Office section on the Angel website. The User ID and Login Password would be provided to all the branches by the CSO.

The important features of the Software are:

• MIS/AUM Data (Region‐wise, Branch‐wise, Sub‐broker‐wise, Applicant‐wise, etc)

• Sub broker Details (Addition, Modification) • Applicant Details (Addition, Modification) • Transaction Entries of Mutual Funds. • Reconciliation of Transactions with Feeds Received from Registrars on a

Daily Basis. • Earning Rates – view for the branches. • Brokerage Paid to Sub brokers. • Portfolio of Applicants – Merging & Emailing Directly to Clients. • NAV History, Dividend History, Factsheets of Schemes and Growth

Calculator. • Login Management for Branches, Sub brokers and Applicant.

SUB BROKER DETAILS

The menu below is for entering sub‐broker details. The details can also be edited, in case of change of address, contact no., and details can also be added. This works as an entire database or MIS for sub‐brokers of all branches. Each branch & RM can access its respective set of sub‐brokers only.

APPLICANT ADDITION

Applicant Addition is a function which will be exercised by all the branches while creating the MIS / Transaction entries of their new clients / applicants. This can be done after completing the TR entries; as also while making Transaction entries; the applicant, if new, gets automatically created and his details can be later on updated by retaining the photocopies of the application forms. It is necessary to ensure that all details provided by the Applicant on the form are updated in the software esp. PAN No. and email address as his online welcome letter and portfolios needs to be sent by us. Like Sub broker Data, even the applicant details can be modified, whenever required.

APPLICANT, FOLIO & SUB‐BROKER QUERIES

This query master helps the users in tracing out transactions based on the information available with them ‐ pertaining to applicants, investment folio no’s or sub‐broker codes or names.

Applicant Query:

Applicant Merging is an exercise which branches can undertake on a weekly basis. For e.g. an applicant might apply in two/three schemes with slight variation in names such as Sheela S. Shetty, Sheela Sadanand Shetty, Sheela Shetty, and if one is sure that all these three portfolios belong to one single applicant, then MERGING of Portfolios can be done.

Folio Query:

Subbroker Query:

APPLICANT MATCHING

This function goes hand‐in‐hand with Applicant Creation and Transaction Entries. On using this option, a list of transactions appears on the screens, which are pending for matching them to their respective applicants. In case the applicant has been created, the transaction can be matched with the respective client. In cases where the applicant name is not present, one has to create it and then match the transaction. This way the portfolio of the applicant is built up. All the transactions pertaining to one applicant should be matched with the same applicant account.

This function is being done on a centralized basis by our MF/IPO Operations Team at the CSO. Branches do not have to exercise this Option

ADD MUTUAL FUND TRANSACTIONS / UPDATION OF DAILY MF TRANSACTIONS IN THE SOFTWARE

Transaction Entries have to be done by the branches on a daily basis as and when the Mutual Fund business is procured by them, through Sub brokers or Direct Clients. Transaction Entries are necessary to get the proper MIS / Revenue

Projection and Reconciliation of our Daily Feeds received from the Registrars (CAMS, KARVY, and TEMPLETON) on a daily basis. These Daily Feeds are uploaded by the CSO regularly, as soon as they are received by us from the Registrars.

Separate Options are given for Sub‐broker Business and Direct Business. Business procured under Branch’s Direct sub‐broker code (ending with 0000) would also come under Sub‐broker Business; whereas business done under direct ECODES of RM / Employees needs to be added under Transactions for Direct‐Client.

Marketing Spends, if any committed, should be recorded while doing TR entries so that amounts can be released against Debit Notes received from the branches.

Proper Scheme TYPE should be chosen (Regular / NFO) and Status (NOR, SIP, STP etc.) from the Options provided.

ADDITION OF PREVIOUS PURCHASES OF APPLICANTS

In case an applicant already has some previous MF purchases, those can be added so that his portfolio which is being generated by our software also contains the details and returns pertaining to his earlier transactions. Pls. note that these previous investments will not earn us any brokerage and will not add to our MIS/AUM.

This facility is extended to sub‐brokers as well as to the Applicants. In this way, we would be providing the client with a value‐added service which helps him to view his consolidated portfolio on one central window.

MIS /AUM REPORT

Branches / Sub‐brokers / RMs can view their respective MIS bifurcations giving scheme‐wise details also. This section should preferably be viewed by selecting Daily Feed rather than TR Entry, because Daily Feeds are up‐to‐date as they are received from Registrars, whereas transaction entries would be done by branches and might not be updated in case of investments being done directly by clients / sub brokers under ANGEL ARN – 39242.

Alternatively, even AUM (Assets Under Management) of your respective Region / Branch can be viewed on this same Menu.

MIS DETAIL REPORT

The MIS Report can also be obtained in a much more detailed manner which would also give details on the basis of each transaction / business procured by the branch for a particular period. This Report should be used to reconcile the TR entries with the Daily Feeds, which are uploaded by CSO on a daily basis. Daily Feeds are the actual processed transaction entries (captured under our ARN Code), which are sent to us by the Registrars on a daily basis. Normally three days’ time is taken for the Daily Feeds to reflect in the Software, after the day of login of forms at Registrar.

APPLICANT PORTFOLIO

This is a very important feature provided by this Software and through this we can update our clients at regular intervals about the status of their investments. This portfolio can be viewed by the client using the Login provided by us. We have also initiated a system in the software, wherein, as soon as a new applicant is created, the Welcome Letter containing his Login Details will be automatically mailed to the applicant (providing the email details are given by the applicant). One can view the statement as per the holdings, portfolio return, performance, etc.

FACTSHEETS

DIVIDEND HISTORY

NAV HISTORY

SCHEME PERFORMANCE

GROWTH CALCULATOR

BROKERAGE

The brokerage figures of the branches and sub‐brokers (In Amounts, Out Amounts & Retention) are available in this menu. The data given is based on actual receipt basis i.e. brokerage received & processed by the CSO Operation Team.

LOGIN MANAGEMENT

The login management function provides the branches with the facility of viewing login id and password for their sub‐brokers and applicants. Each sub‐ broker / applicant can view only their respective records. It is advisable that the first password received be reset

A

1

2

3

4

5 6 7

8

9

10

11

B

1

2

3

4 5 6 7

8 9

10

11

12

13

Mutual Fund Check list of Documents before submission

For Individual clients

In the Application Form following fields are Mandatory to be checked PAN Card Mandatory for all investments; irrespective of amount (w.e.f. 02/07/07). Joint Applicant’s PAN Card also required. In case of Minor; PAN Details of Guardian should be attached. It is mandatory w.e.f. 03/03/2008 that all applicants investing Rs.50,000/‐ and above in Mutual Funds should be KYC Compliant. The details of KYC Regulations in Mutual Funds are further detailed in this document. Dist/Broker Code to be mentioned as ARN‐39242

Sub broker code allotted to your branch/Sub broker. (same code which you are using for IPO investment.) Investor Name Signature

Amount Investor’s Bank details

Scheme Name, Option (Growth/Div.Reinv/DivPayout) properly mentioned

Cheque ‐ in favor of the Scheme name, properly written & signed

Keep photocopies of all the above documents for office use before submission.

For Non Individual/Corporate Bodies

In the Application Form following fields are Mandatory to be checked

PAN Card Mandatory for all investments; irrespective of amount (w.e.f. 02/07/07)

Dist/Broker Code to be mentioned as ARN‐39242 It is mandatory w.e.f. 03/03/2008 that all Non‐Individuals investing Rs.50,000/‐ and above in Mutual Funds should be KYC Compliant. The details of KYC Regulations in Mutual Funds are further detailed in this document. Investor Name Signature Amount

Investor’s Bank details Scheme Name, Option Cheque ‐ in favor of Scheme name, properly written & signed Memorandum & Articles of Association attested copies

Board Resolution: stating that it is resolved in the board meeting that we are authorised to invest in Mutual Funds & the limit of investment

List of Authorized Signatories whose signature is present in the application form

Take photocopies of all the above documents for office use before submission.

Prescribed Documents (PAN Mandatory) for KYC

For Individual Investors Proof of Identity: 1. Photo PAN Card 2. In case of Non Photo PAN Card ‐ in addition to copy of PAN Card, any one of the following: Driving License / Passport copy / Voter ID / Bank Photo Pass Book.

Proof of Address (any one of the following): 1. Latest Telephone Bill: Landline/Mobile (not more than 3 months prior to the date of application). 2. Latest Electricity Bill (not more than 3 months prior to the date of application). 3. Passport copy. 4. Latest Bank Passbook/Bank Account Statement (not more than 3 months prior to the date of application) 5. Latest Demat Account statement (not more than 3 months prior to the date of application). 6. Voter ID. 7. Driving License. 8. Ration Card. 9. Rent Agreement.

For Overseas Address of NRIs: Overseas Bank Account Statement (not more than 3 months prior to the date of application). Any other document duly certified by local authority in the country of residence. In case the documents are in any language other than English, the same must be translated to English and certified by a Government Authority in the country of residence or by the Indian Embassy. In case investors provide more than one address, proofs of both the addresses need to be provided.

For HUF Units can only be held in the name of Karta on behalf of the HUF

Proof of Identity (any one of the following): Copy of PAN Card of the HUF.

Proof of address (HUF) 1. Latest Bank Passbook (not more than 3 months prior to the date of application). 2. Bank account statement (not more than 3 months prior to the date of application).

7.

Alternately, any of the documents listed for proof of address for an individual can be provided by the karta.

Non individuals (PAN Mandatory) Companies / Bodies / Corporate (Certified copy of the following): 1. Certificate of incorporation. 2. Memorandum & Articles of Association. 3. Resolution of the Board of Directors authorizing investment in mutual funds. 4. Power of Attorney granted to its managers, officers or employees to transact business on its behalf (Authorized Signatories List).

Partnership firms (Certified copy of the following): 1. Certificates of Registration, in case of registered Partnership Firms. 2. Any other officially valid documents in respect of holding a power of attorney to transact (Authorized Signatories List and resolution / authority to invest).

Trusts, foundations, NGO’s Charitable Bodies, Clubs/Mutual Fund Schemes (Certified copy of the following) : 1. Certificate of Registration, in case of registered Trusts. 2. Any other valid documents in respect of holding a power of attorney to transact (Authorized Signatories List and resolution / authority to invest) 3. Offer Document of the Mutual Fund Scheme.

Initial Public Offering (IPO)

What is Initial Public Offer or IPO?

A corporate may raise capital in the primary market by way of an Initial Public Offer (IPO).

An Initial Public Offer (IPO) is the selling of securities to the public in the primary market.

It is the largest source of raising funds for the company to finance their expansion and further growth plans.

Initial Public Offering (IPO) is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves the way for listing and trading of the issuer’s securities.

8.

The sale of securities can be either through book‐building or through normal public issue.

Book Building is basically a process used in Initial Public Offer (IPO) for efficient price discovery. It is a mechanism where, during the period for which the IPO is open, bids are collected from investors at various prices, which are above or equal to the floor price. The offer price is determined after the bid closing date.

Price at which securities will be allotted is not known in case of offer of shares through Book‐Building, while in case of offer of shares through normal public issue, price is known in advance to investor.

Floor price is the minimum price and Cap Price is the maximum price at which the bids can be made.

Hierarchy for an IPO

SEBI

NSE

BSE

Registrar

Company

Escrow Bank BRLM/Merchant Bankers/Syndicates

Angel 23/12798‐38 Angel Branches

Other Sub syndicates

Sub brokers

Remisers

Franchisee

9. PRE IPO PROCESSES

1) Sub‐Syndicates Agreements (SSA) for distribution of IPOs

For distribution of IPOs a tie up agreement is made with BRLM/Syndicates. This is an activity which needs to be done for each and every forthcoming IPO before the IPO date is announced. This agreement gives us the right to distribute the IPO forms, accept forms, bidding of forms, exchange, and submission of forms to banks on behalf of BRLMs/Syndicates.

Documents Involved

For 1st Agreement (with NSE under ACDL)

• List of Bidding Collection Centers

• Details of NSE VSAT/LL and User IDs for activation

• List of Branches for Distribution of forms

• Letter of requisition of Forms printed with our CODE i.e. 23/12798‐38

• (to be printed on ACDL Letterhead)

• Letter to NSE for activation of USER IDs

For 2nd Agreement (with BSE under ABL) • List of Bidding Collection Centers

• Details of BSE IP Address for activation

• List of Branches for Distribution of forms

• Letter of requisition of Forms printed with our CODE i.e. 23/12798‐38

• (to be printed on ACDL Letterhead)

• Letter to BSE for activation of USER IDs Note – In case of only 1 BRLM/Syndicate member appointed for Issue, both NSE and BSE Agreements will be submitted.

Procedure:

There are basically two sources of getting proposal for SSA i.e. Direct and Indirect. In direct proposal BRLMs/Syndicates directly approach and send us a proposal for Sub‐syndicate agreement of their forthcoming IPO. Secondly, we refer to some sites for the basic details of forthcoming IPOs which give us an idea about those IPOs which are in pipeline along with other details viz. Name of BRLMs/ Syndicates, Bankers and Registrars appointed for IPO, etc.

(Sites – Sebi.com, Primedatabse.com, moneycontrol.com, capitalmarket.com, etc.)

We always tie up with at least 2 members using the ACDL and ABL member code.

2) Distributions of IPO Form

Once all the formalities of Agreements are done and the date of Issue is announced by BRLMs, the forms distribution schedules are sent to us by them. This gives us an idea about the quantum of allotted forms and list of Angel Branches, the forms are directly sent by them. Once branches receive their forms they further circulate it to their Sub‐brokers and Clients.

3) Basic information of IPO to Branches

3.1) Process description:

IPO product notes and basic details are forwarded to the Branches.

Basic IPO details like Issue opening dates, closing dates minimum and maximum qty, bid lot, Registrars to the issue, Issue Size, etc. are forwarded to the branches,

Recommendation ‐ Product notes recd from Syndicates, Angel Product Note and recommendations (if any) are sent to all the branches which help them to advise their sub‐brokers and Clients.

Brokerage & Incentives – Information about the Brokerage and Incentives payable to Sub‐brokers is being forwarded from CSO to all branches in advance to circulate with their sub‐brokers.

Banking Matrix – Banking Matrix received from syndicate provides information of banks where we can submit the IPO forms on day‐to–day basis. These details are provided to branches in advance so that they can arrange to send forms to other locations within the stipulated time if banking location is not available at their end.

4) Updating of IPO Information on Angels Website

All information about Current and Closed IPOs are available on the Angeltrade.com site in services/IPO page. This site can be viewed to all. Uploading of information:

Log‐on with your

5) Updating IPO Masters for Offline IPO Utility.

Offline IPO utility is available to all branches in our back‐office where they can do offline entries of IPO forms accepted by them during the IPO period.

Basic details received from Syndicates/BRLMs are updated in the utility masters before the IPO open date.

10. IPO PROCESSES

1 Collection and Verification of Forms

All the collected forms need to be verified and preliminary checking of documents is necessary as this may lead to rejection of Forms at Registrar level.

Preliminary checking of the following:

1) Demat Detail –NSDL or CDSL ( NSDL is 8 digit code and CDSL is 16 digit code) 2) Quantity – has to be in lots as specified 3) Status – has to be mentioned (IND, HUF/ etc) 4) Price – as per price band 5) Contact No. – preferably mobile & land line nos (both) 6) Applicant Signature 7) PAN card details – for all applications, irrespective of amount 8) Category – Retail /HNI/ QIB 9) Cheque Payable to Escrow Account – has to be checked as per Category – different Category has different escrow account which is mentioned on the form below Angel’s code

10) Cheque Details – amount in cheque should tally with application (if cheque amount is higher than balance is refunded and application can be accepted)

11) Outstation payment – either through Cheque ‐payable at – par or DD payable at the submitting city.

2 Bidding of IPO Forms in Offline Utility

Branches send their bids in an offline format through the IPO utility accessible by them via ACDL BackOffice Login. The user id & password for the utility is provided to all the branches. All these bids are centrally uploaded by the CSO Team on the Exchange.

Generation of CSV file: All the entered transactions get’s generated in a CSV file at a particular interval and then has to be uploaded in NEAT System.

3) Uploading of Bids at NSE

This is very important process in Book Building without which the IPO process cannot be completed. Successful uploading of all our bids is ensured by the TRS No. which is provided by the exchanged against each & every uploaded bid.

Log on to NEAT software.

In the Supplementary Menu, select Offline Order entry and specify the destination of CSV file and clik Open to get the file upload. Below is the snapshot for the same.

3) Confirmation of TRS for each Bidded form

Once the CSV file is uploaded on NEAT, a REVERT file containing TRS number against each Application Name is received. This needs to be uploaded in our Offline IPO Utility. This process shows the Confirmation of TRS No.

4) Back‐up of Offline IPO Utility

On closing day of IPO a back up is taken of all the uploaded bids. This is maintained for further reference & reconciliation purpose when we receive Brokerage files for that particular IPO.

6) Co‐ordination of Branches for Modification/Cancellation of Bids.

There is a stipulated time frame decided by Exchanges for Modification/Cancellation of bids. These requests are recd from Branches and steps are taken accordingly by the team. The results are then communicated to the respective Branches.

11. POST IPO PROCESSES

Details related to Allotment and listings of IPO records are received from Syndicate. This is then forwarded to All Branches and Feedback Team for further information. This gives the clients an Idea about the Ratio of Allotment decided by the Registrars as it varies from IPO to IPO.

12. Query Management Process:

Resolving all query or complain received in regards to IPO.

There are 3 types of queries: 1) Pre‐IPO queries 2) Queries during IPO 3) Post IPO queries

1) Pre‐IPO queries:

• Queries related to forthcoming IPOs, Opening, Closing dates, Size of Issue, Payment options, etc come Pre IPO Queries.

• These queries are been handled by CSO Ops, solved in a stipulated time‐frame. Such queries can be further bifurcated into 3 parts: queries from Branches, Queries from Sub‐brokers and Queries from Clients

2) Queries during IPO:

These are queries related to the current IPOs from Client, Branches or SBs. Such queries consist of Banking of forms, uploading of bids or form filling, different payment option, TRS related queries, etc.

3) Post IPO queries:

Queries related to Allotment and listing dates, Allotment Ratio, confirmation of Allotment, Credit of Shares in Clients Accounts and Queries related to Refund of Amount comes under this category.

13. Annexure

1.1) Annexure 1.

Application Form. Page 1.

A

B

C D

E G

H

I

K

J

F

U

Application number is a unique no. required for tracking the MF investment.

B ARN & Name of Distributor shows the ARN of an individual or company under whom the transaction will be mapped by the Registrar. All MF forms distributed by ANGEL should bear ARN‐39242 stamp.

C Existing folio no is required to be filled in by Investor for his additional investments in the same scheme or Mutual Fund invested through the same distributor.

D Name of 1st Applicant denotes the name of primary applicant. If there are more than one applicants, then fields for 2nd and 3rd applicants also needs to be filled in.

E Date of birth is not mandatory except in case of investments done for minors.

F Email ID is an optional field but we insist on this detail so that our Welcome Letter reaches all our clients which are sent through email.

G Telephone no is also an optional field but it is suggested that investors give this detail so that they can be contacted in case of any further requirement.

H PAN Details is mandatory field for all investments.

I Contact Detail i.e. Address for communication is mandatory so that account statements or any kind of further communication can be sent at by the AMC to the investors.

J Bank Particulars are also required to be mentioned in case of further Debit (SIPs) or credit (Redemption / Dividend proceeds).

K Acknowledgements slips should also be filled up so that necessary follow‐up can be done, if required.

U Sub‐broker code is mandatory as Angel needs to pays brokerage to them.

N OM

PL

R

S

T

Q

The scheme under which the amount needs to be invested should be mentioned

M Option is mandatory field ie Growth or Dividend, if nothing is mentioned then Growth option is treated by default.

N Cheque amount (Investment Amount) needs to be given

O Bank details on which the cheque is drawn

P Cheque no/Date needs to be mentioned

Q SWP is an systematic withdrawl plan which gives you an option of systematic redemption of your investment on a specific date upto the period as specified by the investor

R STP is an systematic transfer plan in which you can opt for systemetic transfer of your fund from one scheme to another

S Nomination is an optional field in which you have to mentioned the details of your nominee.

T Signature(s) is mandatory field wherein the investor has to put down his specimen signature. Signature of all Joint Applicants are required.

1.2) Annexure 2.

SIP Form

A

C

D

E

F

G

B

A ARN & Name of Distributor shows the ARN of an individual or company under whom the transaction will be mapped by the Registrar. All MF forms distributed by ANGEL should bear ARN‐39242 stamp.

B Sub‐broker code is mandatory as Angel needs to pays brokerage to them.

C Existing folio no is required to be filled in by Investor for his additional investments in the same scheme or Mutual Fund invested through the same distributor.

D Name of 1st Applicant denotes the name of primary applicant. If there are more than one applicants, then fields for 2nd and 3rd applicants also needs to be filled in.

E SIP Details are mandatory, as based on this detail the investors SIP would get deducted at future date.

F Bank Particulars needs to be mentioned in case of further Debit (SIPs) or credit (Redemption / Dividend proceeds).

G Signature(s) is mandatory field wherein the investor has to put down his specimen signature. Signature of all Joint Applicants are required.

1.3 Annexure 3.

KYC Forms

Individual Page 1.

Individual Page2

Non‐individual. Page 1.

Non Individual Page 2.

1.4 Annexure 4. Application Form for appointment of Sub‐broker Mutual Funds/IPOs

Applied For MFIPOINSLOAN

SB Code 0300120148

Name JAYKUMAR R. BRAHAMBHATT

Address1 132, BHU TADIYA VAS, GAM CHOCK PASE,

Address2 MALANA, PALANPUR

PIN No 385001

Tel No (res) No

Tel No (off) No

Mob No No

Email ID NO

AMFI No ‐

ARN Date

AMFI Expiry Date

Category INDIVIDUAL

Presently working as Sub broker of ‐

IPO 0

Mutual Fund 0

Family code NO

PAN No AOTPB8252Q

Bank Name STATE BANK OF INDIA

Bank Add BRANCH MALANA, PALANPUR

Act No 10944194102

Existing Sub Broker Equity Tag ‐

1.5 Annexure 5. Welcome Letter for Sub‐broker.

Dear Associate,

Allotment of Code

We thank you for your preference in partnering with Angel. Here is a warm welcome from the Angel Group, for becoming our Business Associate.

We are pleased to inform you that your application has been processed and you have been allotted a code number which is (0106110378)

You are requested to quote this code number in all your correspondence with us and also use it in all the business transactions without any prefixes or suffixes.

The Code been allotted for all your Distribution Business activities conducted with Angel.

You can even view your Business MIS online by visiting our site www. angelmf.com and Clicking on Backoffice Login will prompt you for your LOG IN DETAILS which are as follows:

USER ID: xxxxxxxxx

Password: xxxxxx We look forward to a mutually rewarding association with you. In case of further assistance for activation of the code you can contact us at our corporate office, Tel: 022–30817400 or mail us at [email protected], & for any kind of support you can reach us at our distribution office, Tel 022 ‐4230 3600 or E‐mail us at: [email protected]

With Best Regards, For ANGEL CAPITAL & DEBT MARKET LTD.

What are the checks that one should note?

(1) Demat Detail –NSDL or CDSL ( NSDL is 8 digit code and CDSL is 16 digit code)

(2) Quantity – has to be in lots as specified

(3) Status – has to be mentioned (IND,HUF/ etc)

(4) Price – as per price band

(5) Contact No. – preferably mobile & land line no’s (both)

(6) Applicant Signature

(7) PAN card details – for all applications; irrespective of amount

(8) Category – Retail /HNI/ QIB

(9) Cheque Payable to Escrow Account – has to be checked as per Category –different Categories have different escrow accounts, which are mentioned on the form below Angel’s code

(10) Outstation payment – either through Cheque ‐payable at – par or DD, payable at the submitting city.

Uploading of Bids: The branches send their bids in an offline format through a utility (IPO Utility) accessed by the IPO team at Akruti. The user id & password for the utility is provided to all the branches.

Banking of Forms: As of now, for Mumbai branches‐ forms are collected at the CSO on the last day of bidding by evening 6.00 pm and banked centrally. Regional Offices bank the forms at their respective banking centre.

Advisory Services offered in the Weekly review, wherein forthcoming IPOs (in which Angel is a distributor) are covered, and fundamental and technical aspects of the IPO are offered by analysts.

Competitive Sharing Pattern: The brokerage shared by ANGEL with its sub‐brokers is in line with the industry practice.

Angel Website gives details of the ongoing and forthcoming IPOs as well as ratings, if any, by our dedicated Research Team.

Q. Who should be contacted for the Mutual Fund & IPO Operations?

1) Ms. Munira Memon & Mr. Pramod Padalkar (for operational queries) Contact: 022‐ 39535300 respectively.

2) Mr. Pramod Vinerkar for IPO related processes and queries. (Contact: 022 – 3953 5300)

Queries. (022‐ 3953 5300) For Operational queries of MF/IPO Email: [email protected]

[email protected]

For Advisory & Marketing Related queries Email: [email protected]

CHAPTER ‐ XI Trading in the new age E‐Broking Services

1.

2.

3.

4.

CHAPTER COVERAGE

Introduction

E‐broking products offered by Angel

USP’s of Angel’s E‐broking service

The salient features of Angel’s E‐broking Service

1.

2.

Introduction

E‐Broking is a service provided by Angel for online trading in equities

and commodities using the internet as a connecting platform. It enlists the power of electronics to connect buyers and sellers in

geographically separate locations in a live trading domain.

One can use his computer over the Internet or via proprietary networks to trade in real time.

E‐Broking products offered by Angel

Angel provides for on‐line trading on BSE, NSE (Cash and F&O), NCDEX and MCX through our 4 unique E‐Broking platforms, which are both browser and application based; especially designed for traders as well as investors.

The four e‐broking platforms which Angel provides to its clients are:

• Angel Investor • Angel Trade • Angel Diet • Angel Anywhere

Fig.1

2.1. Angel Trade / Angel Investor

Exhibit.1

Angel trade and Angel Investor are browser‐based products, ideal for investors and low volume traders. (Exhibit.1) No installation is required.

The online trading platform can be accessed through any web‐based

browser like internet explorer or Netscape navigator.

Angel Investor has a static page (without streaming quotes) and works

behind most active firewalls. It is ideally suited for clients working in

corporate and IT parks. Angel Trade gives the convenience of real time quotes and online trading

facility for multiple exchanges on a single screen.

Online funds transfer, real time news and message flashs help make

trading a convenient experience.

2.2. Angel Diet:

Exhibit.2

Angel Diet is an application based trading platform (Exhibit.2). Real time quotes, multiple

exchanges on single screen, online fund transfer and real time trading tips and news flash

are some of the hallmarks of the product.

The product is very versatile, packed with features to give a day trader high leverage in his

trades .

It is very much easy to use and convenient to traders who churn in large volumes.

2.3. Angel Anywhere:

Exhibit.3

3.

Angel Anywhere is a server application‐based online trading platform

for the equities domain.(Exhibit.3) It has been embedded with technical analysis tools and chart studies to

enable traders do technical analysis of the market.

Angel Anywhere is offered to clients who have a technical bent of mind.

The USP’s of Angel’s E‐Broking service

The USP’s of Angel’s E‐Broking services are as follows:

Our internet trading platform gives state‐of‐the‐art trading facility, real‐

time order and trade confirmation, e‐contracts and 24X7 on‐line web‐

enabled back‐office system at the click of a button. Comfort and Privacy.

Streaming quotes and Technical tools.

Real‐time news and message flash.

Advantage of multiple exchanges on a single screen. Auto pay‐in of shares. Intra‐day calls & flash news for a comfortable and convenient trading

experience. Historical charts with technical tools for technical analysis of the markets.

4.

The salient features of Angel’s E‐Broking service

Multiple exchanges on a single screen: Online trading on BSE / NSE (Cash and F&O), MCX and NCDEX on a single screen. (Exhibit.4)

Exhibit.4

Speed: Use of latest technology to generate efficient uptime and greater stability to give high speed. Competitive brokerage rates: Providing our clients the best value‐added

services at the most competitive brokerage rates.

Optimum margins: Angel gives the trading exposure at optimum

margin level. Online funds transfer: The clients enjoy the convenience of online transfer of funds from their bank accounts, to the margin account of

Angel, online. (Exhibit.5)

Exhibit.5

Personalized service: HNI clients can avail of personalized advisory

services, from our trained and experienced dealers, on trading

opportunities.

Off line services: Clients are free to make a telephone call to any of our

103 well‐equipped branches across the country. Technology: Angel provides the latest infrastructure tools to support and integrate the back‐end and front office functionalities.

Back office infrastructure: Angel provides an automated web‐enabled centralized back‐office, whereby the clients have access to their trade confirmation reports, holding statement, their net position, the margins

and the statement of accounts and ledgers on a 24 X 7 basis.

Technical support: Removal of technical difficulties through an online support system, manned by qualified professionals.

E ‐ Contract notes cum bills: Angel provides contract notes cum bills in

electronic form, resulting in ease of access to trades carried out by the clients on any particular day.

E – Broking Training Centre: E‐Broking training centre helps train

clients on online trading platform, and also creates awareness about the

stock – markets.

Helplines

Contact Person

Designation

Location Tel no – Extn

Ms. Duran Fernandes Executive – ETC

Acme

(022) 4000 4400 ‐ 226

Ms. Bhakti Karande

Executive ‐ ETC

Acme

(022) 4000 4400 ‐ 226

CHAPTER ‐ XII Risk Management

1.

2.

3.

4.

5.

6.

7.

8.

9.

CHAPTER COVERAGE

Introduction

Importance of Risk Management

Processes in Risk Management

How to identify, monitor and control risk?

Online Risk System

Offline Risk System and two major reports in Offline Risk System

Comprehensive Risk Report

Pure Risk and Projected Risk, How are they calculated?

Collection Report

10. Benefits of Online and Offline system

11. F&O margin violation report

12. Case Studies: F&O Margin Violation Report against F&O Ledger balance in Collection Report.

13. SB Credit

14. Penal Charges

15. Risk Management Checklist

1.

2.

Introduction

Risk Management is a discipline or systematic process that enables

people and organizations to cope with uncertainty by taking steps to protect their vital assets and resources.

In context to our business, it is a process whereby the company (could be

a broker, institution, stock exchange) lays down a clear process of how its risks should be managed.

Importance of Risk Management

Risk Management is an integral part of good management.

It is an iterative process that, with each cycle, can contribute progressively to organizational improvement by providing

3.

4.

management with a greater insight into risks and their impact.

The application of sound risk management allows for continual

improvement in decision making, processes and helps achieve

management goals towards GROWTH, ROI and “CUSTOMER DELIGHT”.

Processes in Risk Management

The different processes involved in Risk Management are: Identifying risk. Deciding how much exposure should be given to each client. Deciding the frequency of collection of margins. Deciding how much risk is acceptable. Controlling risk on a continuous basis. Monitoring exposure taken on a continuous basis.

How to identify, monitor and control risk?

At Angel, we have the best of software systems and reports which help us to identify, monitor and control risk effectively. These are as follows:

• Online Risk System • Offline Risk System

5. Online Risk System

Online Risk System: Online Risk System is the system which provides the net position data of each client, sub‐broker and branch on a real time basis.

These are as follows: (Exhibits.1 &2

• Increment / Decrement positions. • Exposure ‐ Gross Exposure & Net Exposure. • Current Outstanding Positions. • Scrip‐ wise intra day trades. • Risk Clients ‐ Projected Risk & Pure Risk.

Exhibit.1: Online Risk Client (BSE Cash)

Exhibit.2: Online Risk Client (NSE F&O)

6. Offline Risk System and the two major reports in Offline Risk System

Offline Risk System: Offline Risk System is the system which gives

complete information on the risk and collection status of each client, sub‐

broker and branch as on the last trading day. There are 2 major reports in the offline risk system:

• Comprehensive risk report.

• Collection report.

7. Comprehensive Risk Report

As the name suggests, this report looks after the risk aspect of the sub

broker and of Angel as a whole.

This is the major difference between the Collection Report and the

Comprehensive Risk Report. The columns which require explanation are Risk before Remisior Credit,

Remisior’s Credit, Branch Details, and Risk after Remisior’s

Credit.(Exhibit.3)

It shows the list of clients, sub‐brokers and branches which come under

Pure and Projected Risk.

Exhibit.3

Risk before Remisior Credit: This column states the Risk of the branch and once we drill down, we come to know the risk of various sub brokers mapped under that branch as well as the risk of direct clients under that branch. We have further bifurcated Risk into Projected Risk and Pure Risk. Projected Risk is calculated by applying a certain percentage of haircuts on the collateral and the resultant figure is compared with the ledger balance. Needless to say, where the resultant figure is more than the ledger balance, that particular client code will not be reflected in the Projected Risk. On the other hand Pure Risk is one‐to‐one risk, i.e. whatever is the valuation of collateral with us, the same is compared with the ledger balance. If, for a particular client code, his ledger balance is more than the collateral with us, his code would be reflected under Pure Risk column. Kindly note that a detailed calculation of the subbroker’s risk is not available, since we will be concentrating on the Risk after Remisior’s Credit column. This column is kept for the subbroker to know where he is standing at the end of the day. Calculations of the figures under Projected Risk and under Pure Risk will be dealt with in the Risk after Remisior’s Credit column.

Remisior’s Credit: Unlike in Collection Report, where only the subbroker’s brokerage is considered, in this report under this column not only is the subbroker’s brokerage considered, but also any deposit given by that sub broker is credited. The modus operandi for brokerage remains the same as explained in the Collection Report, the difference being only in presentation. The first sub ‐column under Remisior’s Credit reveals the figure of brokerage accrued and due, while the second sub ‐ column reveals the figure of brokerage accrued but not due. The third sub‐ column reveals the figure of any deposit given by the sub ‐broker. The summation of these three sub ‐columns is shown under the sub ‐ column Total.

Branch Details: This column reveals the branch code and the branch name assigned to various branches opened all across India. The branch code assigned is unique in nature. Once you drill down under any branch, you will find direct clients mapped under that branch as also the various sub‐brokers who have registered under that branch. The sub‐ brokers who are registered are also allotted a unique sub ‐broker code and name.

Risk after Remisior Credit: This is the most important column which we need to keep a close watch on. Any figure appearing in projected risk or pure risk sub‐ columns pertains to our risk, since all adjustments pertaining to the brokerage due to the sub‐ broker as well as the deposit given by the sub‐ broker have been deducted from his projected as well as pure risk, to derive our projected or pure risk.

8. Pure Risk and Projected Risk. How are they calculated?

Pure Risk: All debits left after the deposits and holdings value are

considered, i.e. debits exceeding the holdings and the deposit held with us.

Pure risk is calculated as follows: Total Ledger Balance – Total Holding –

Collateral given in FO / MCX / NCDEX. Projected Risk: It is calculated on the margins of commodities and F &

O.

Projected Risk is calculated as follows: Total Ledger Balance + 50% of Initial Margin in FO / MCX / NCDEX – Collateral given in FO / MCX / NCDEX – Total Holding after applying Hair Cut.

The hair cut to be applied is as follows: For stock falling under Approved

Category 10% Haircut is applied, and for stock falling under Non – Approved Category 100% Haircut is applied.

The logic behind applying 50% Haircut of Initial Margin is that we

presume that the client will pay at least 50% of the margin.

9. Collection Report

As the name suggests Collection Report concentrates on codes of those

clients from whom we need to collect money on account of either shares

purchased in the cash segment, intra‐day loss incurred in the cash / derivative / commodities segment or position taken in the derivative /

commodities segment.

As far as Risk Management is concerned, the Collection Report is of two

types: one showing collection on Net basis, and the other on Gross basis. Needless to say, Gross collection report will show only codes of those clients who are in debit.

In other words a particular sub‐ broker, whose client has a credit balance, won’t find a place in this report. On the other hand Net collection report will also list codes of those

clients who have a credit in their ledger balance.(Exhibit.4)

Gross Collection Report: Gross Collection Report consists of the following columns: BSE Ledger, NSE Ledger, FO (Net), NCDEX (Net),

MCX (Net), Total, Deposit, SB Code, SB Name, Brokerage, Net Debit,

Holding.(Exhibit.5)

There is not much difference between the Gross Collection Report and the Collection Report, as far as reading them is concerned. The major difference between the two is that the Gross Collection Report lists those

client codes from whom payment needs to be collected under a said sub

broker, while the Collection Report also takes into account credit balance

of other client codes mapped under the same sub broker, over and above

the client codes listed under Gross Collection Report.

Exhibit.4: Collection / Net Collection report

Exhibit.5: Gross Collection Report

10. Benefits of Online And Offline system

The online & Offline system helps us to Assign limits and exposure. Identify the risk clients. Collection of margins. Check the current open positions Release Payout of shares and cheque. Release brokerage to the sub‐broker / franchisee Check if the positions are squared off.

11. F&O Margin Violation Report

As the name suggests, this report shows the list of branches, sub brokers

and clients having margin shortage. (Exhibit.6) The report concentrates on those client codes from whom we need to

collect money on account of either position taken in the F&O segment or

MTM loss incurred or both.

Exhibit. 6

12. Case Studies: F&O Margin Violation Report against F&O Ledger balance in the Collection Report

Exhibit 7 Ledger

DepositPartyCode

Party NameNet Debit

Holding

Allowed Net

Default Collection

BSE NSE FO (Net)

NCDEX (Net)

MCX (Net)

NBFC TOTAL Appr. Non.Appr. TOTAL

3.01 ‐0.00 ‐0.42 0.00 0.00 0.00 2.58 0.00 D6527DILIP DHANRAJ MUNO

2.58 11.60 0.00 11.60 0.00 2.58 ‐

3.01 ‐0.00 ‐0.42 0.00 0.00 0.00 2.58 0.00 TOTAL 2.58 11.60 0.00 11.60 ‐ 2.58 ‐

In the above case (Exhibit7), it can be seen that the client has a ledger credit of Rs.0.74 lacs, the collateral column shows nil value and there is a margin requirement of Rs.0.31 lacs. The summation of the above reflects a net overall shortage credit of Rs.0.42 and the same figure is also reflected in the main collection report. In the above case, credit of Rs.42000 odd has been considered in the collection report since the credit effect is on account of the excess ledger balance and not the collateral.

*************************

Sauda Date Party Code

Party Name Ledger Balance

Colleteral Initial Margin

MarginShortage

Shortage (%)

Gross Overall Shortage (in Lacs)

Net Overall

Shortage (in Lacs)

Exposure in Lacs

08/09/2006 D6527 DILIP DHANRAJ MUNOT

‐73,799.46 0.00 31,420.19 0.00 0.00 % 0.00 ‐

42,379.27 2.00

Exhibit 8

In the above client code (Exhibit.8), it can be seen that the client has a ledger debit of Rs.0.84, collateral against margin of Rs.15.17 lacs, and Margin requirement of Rs.4.43 lacs. The entire margin requirement is sufficiently getting covered against the Collateral. So, as such, there is no margin shortage, but still in the collection report a figure of Rs.0.84 lacs is reflected. This is on account of ledger debit in FO or, in other words, his mark to market loss, which needs to be collected. In the above case, kindly note that ledger debit is not adjusted against Collateral, in spite of the fact that the Collateral value is sufficient to clear the entire ledger debit also.

*************************

Ledger

DepositPartyCode

Party Name Net Debit

Holding

Allowed Net

Default

CollectionBSE NSE

FO (Net)

NCDEX (Net)

MCX (Net)


0.00 1.41 0.84 0.00 0.00 0.00 2.24 0.00 S11233 SALIM CHIMTHANWALA

2.24 1.57 0.22 1.78 0.00 2.24 ‐

0.00 1.41 0.84 0.00 0.00 0.00 2.24 0.00 TOTAL 2.24 1.57 0.22 1.78 ‐ 2.24 ‐

Sauda Date

Party Code



MarginShortage

Shortage (%)

Gross Overall

Shortage (in Lacs)

Net Overall Shortage (in Lacs)

Exposure

in Lacs

08/09/2006

S11233 SALIM CHIMTHANWALA

83,705.92 1,517,170.56

442,526.18 0.00 0.00 % 0.00 ‐990,938.46 27.36

Exhibit 9

In the above client code (Exhibit.9), it can be seen that the client has a ledger debit of Rs.0.16 lacs with NIL collateral and margin requirement of Rs.1.80 lacs. Thus, in

the collateral column a figure of Rs.1.96 lacs is reflected, which includes mark to market loss plus margin requirement on account of his open position. Even margin shortage column is reflecting the same amount as reflected in the collection report.

*************************

Ledger

DepositPartyCode


Holding

Allowed Net

Default

Collection BSE NSE

FO (Net)

NCDEX (Net)

MCX (Net)


0.22 0.00 1.96 0.00 0.00 0.00 2.18 0.00 A3614ATISH RAMESH AGRAW

2.18 0.21 0.00 0.21 0.00 2.18 ‐

0.22 0.00 1.96 0.00 0.00 0.00 2.18 0.00 TOTAL 2.18 0.21 0.00 0.21 ‐ 2.18 ‐




MarginShortage

Shortage (%)


Net OverallShortage(in Lacs)

Exposure in Lacs

08/09/2006 A3614 ATISH R AGRAWAL

15,971.64 0.00 180,196.55 196,168.00 108.86 % 196,168.19 196,168.19 9.00

Exhibit 10

In the above client code (Exhibit.10), it can be seen that the client has a ledger credit of Rs.1.30 lacs, collateral of Rs.1.48 lacs against Margin and a margin requirement of Rs.0.84 lacs. Since the summation of the ledger balance and collateral is sufficient to cover the entire Margin requirement, there is no margin shortage. The summation also shows net overall shortage credit of Rs.1.94 lacs. However, in the collection report, credit of only Rs.0.46 lacs is reflected. This is on account of ledger credit of Rs.1.29 lacs minus margin requirement of Rs.0.84 lacs. No credit of collateral is given in the collection report.

*************************

Ledger

DepositPartyCode


Holding

Allowed Net

Default

CollectionBSE NSE

FO (Net)

NCDEX (Net)

MCX (Net)


0.00 0.00 ‐0.46 0.00 0.00 0.00 ‐0.46 0.00 S11140 SURESH KUMAR B JAIN

‐0.46 1.70 0.11 1.81 0.00 ‐0.46 ‐

0.00 0.00 ‐0.46 0.00 0.00 0.00 ‐0.46 0.00 TOTAL ‐0.46 1.70 0.11 1.81 ‐ ‐0.46 ‐

Sauda Date

Party Code



MarginShortage

Shortage (%)


Net OverallShortage(in Lacs)

Exposure

in Lacs

08/09/2006

S11140 SURESH KUMAR B JAIN

‐129,681.96 148,421.25 83,706.63 0.00 0.00 % 0.00 ‐194,396.58 4.77

Exhibit 11

In the above client code (Exhibit.11), it can be seen that the client has a ledger debit of Rs.0.14 lacs with collateral of Rs.0.29 lacs. In this case, although there is net overall shortage credit of Rs.0.15 lacs, the collection report shows a debit of Rs.0.15 lacs. This is on account of the mark to market loss suffered by the client, which needs to be collected as the same cannot be adjusted against Collateral.

***********************

Ledger

Deposit Party Code


Holding

Allowed Net

Default Collection

BSE NSE FO

(Net) NCDEX (Net)

MCX (Net)


0.03 ‐0.23 0.15 0.00 0.00 0.00 ‐0.05 0.00 R5246 RAJESH KUMAR D ‐0.05 0.58 0.00 0.58 0.00 ‐0.05 ‐

0.03 ‐0.23 0.15 0.00 0.00 0.00 ‐0.05 0.00 TOTAL ‐0.05 0.58 0.00 0.58 ‐ ‐0.05 ‐




MarginShortage

Shortage (%)


Net Overall

Shortage (in Lacs)

Exposure in Lacs

08/09/2006 R5246 RAJESH KUMAR D

14,527.89 29,637.75 0.00 0.00 0.00 % 0.00 ‐

15,109.86 0.00

Exhibit 12

In the above client code (Exhibit.12), it can be seen that the client has a ledger

credit of Rs.7.47 lacs with NIL Collateral and margin requirement of Rs.7.69 lacs. Thus, the summation results in margin shortage of Rs.0.21 lacs. Here you can see, there is a figure of Rs.5.02 lacs in the MTM loss column. This column represents the loss incurred by the client on account of options sold by him.

13. SB credit:

Sub‐broker credit interest is given on the sub‐broker brokerage and deposit with angel. The calculation and logic is as under:

Credit is given:

• Sub‐broker’s brokerage ledger across all segments is taken as a net figure to derive the amount in column (A).

• Sub‐broker’s cash deposit across all segments is taken as a net figure to derive the amount in column (B).

• Debit of all clients under the sub‐broker having amount less then Rs 1000/‐ on which no penalty is levied, are added and reflected in column (C).

• Debit and pure risk above Rs.1000/‐ which have not been penalized are summed up and represented in column (D).

• Debit of the clients on which the penal is charged for that day is added in column (F).

Party Code Party Name Ledger Balance


MarginShortage

Shortage (%)

Gross OverallShortage(in Lacs)

Net Overall

Shortage (in Lacs)

Exposure in Lacs

MTM Loss

in Lacs

S8884 SHAH SANDEEP J

‐747,166.94 0.00 768,510.82 21,344.00 2.77 % 0.21 0.21 0.71 5.02

14. Penal Charges

Clients having debit for more than prescribe days,(which is more than actual Pay‐in days to the exchange plus the additional day given by Angel) will be charged interest in their ledger.

Logic and calculation of the same is as under:

It runs on a concept of voucher date and effective date to calculate the penal charges. Voucher date is a date on which the transaction is done and posted in the back office ledger. Where as effective date will be actual pay‐in days as per exchange + Excess days granted to a clients to pay the required amount. So the transaction date will be the T day and effective date will be the T+4 day in the Penal software. For example clients buys on Monday (T day) and he need to pay the required amount by T+4 i.e. Friday. In this case Monday’s date will be consider as the voucher date and Friday’s date will be considered effective date.

Separate ledger will be maintained by the penal software to calculate the running balance of a client which will be different then the back office / Risk management ledger. Penal software ledger will run on Effective date and not on voucher date. Entries in the penal ledger will be considered / posted on the Effective Date only and not on voucher date. For example if any buying is done on Monday. The debit will reflect in the back office/ risk management ledger on the same day i.e. Monday, but the same will be posted/considered in the penal ledger only on subsequent Friday

which is the Effective date.

Effective date for debit/buying will be considered on T+4 as defined to a Region(Can differ from region to region), where as credit /selling transaction will be done on T+2 to all the clients. All the Cheque entry will be considered on T day itself, the effective date for Cheque entered in the system is the same as voucher date.

In case of derivatives segments (Equities + commodities) effective date will be one day lesser then the cash segment for example if a particular region is on T+4 days calculation then for derivatives it till be on T+3. Margin will be completely adjust against the non‐ cash collateral if any, In‐case of excess non cash collateral the balance will be ignored. Incase if the margin is still short after adjusting with non‐cash collateral then it will be adjust against the ledger(cash collateral) to compute final debit/credit for that segment individually.

Individual segment running balance will be computed as per the effective date and then netted off for that calendar date. The net balance if debit will then attract penal charges @ 18% p.a

Clients whose net balance is less then Rs 1000/‐ for a day and clients who have not traded for last six months across segments are excluded from penalty.

15. Risk Management Checklist

Risk Management Review Check List Activity Purpose

Before 9.15 a.m

Report on Clients in Pure / Projected Risk with Open Position in Futures & Options

Market

Status

Remarks

Sub Broker / Client Report with Incremental / Dereamental in

Comprehensive & Collection Gross & Net.

Attending Pre‐Market Dealers meeting First Follow with the Sub Broker / Clients regarding their Risk according to the reports obtained above

Sending the Reports along with the Remarks regarding the follow up and taking collective actions to CSO & the

Branch Dealing Team Login the Online Systems (Ideally in Diff

PC.)

Identifying Pure risk customer

Between 9.15 to 9.45

To update the dealers regarding the Current Risk

status of their clients and the plan of action during the day

with respect to Risk Management.

Understanding and use of the comprehensive Risk report


Inform the CSO about the status of the Major Risk clients and seconding to the dealers for not executing the saudas for

debit clients for real Time basis Risk

Management

1st Collection Follow up Between 9.55 to 12.00

Keeping the Client on Square up Mode (if required)

Monitoring the Online Risk Management and Informing the SB / Clients regarding the new Position and the MTM against

the Shortfall

Status for the Overall Risk Clients

for real Time basis Risk Management

Pay Out Check (if fresh buying is seen, stop the payout‐ both in terms of cash

and securities for debit clients) Sending the 1 st Collection Report follow up to CSO along with the list of clients

taken the limits for intra day

For avoiding pay out against Debits aroused during the

market


2st Collection Follow up (in consideration with feedback given in the First Follow

up)

Monitoring the Online Risk Management and Informing the SB / Clients regarding the new Position and the MTM against

the Shortfall Pay Out Check (if fresh buying is seen, stop the payout‐ both in terms of cash

and securities for debit clients)

Informing the Clients which have taken Limits for Intraday Trading to Squaring up

the Position. Between 3.00 to 4.00

Monitoring the Online Risk Management and Informing the SB / Clients regarding the new Position and the MTM against the Shortfall to Square up the Position

Informing the Clients which have taken Limits for Intraday Trading to Squaring up

the Position. Finally Preparing the Final Collection Report along with the Remarks and the

Total Collection Figure Final Pay Out Check (if fresh buying is seen, stop the payout‐ both in terms of cash and securities for debit clients)and inform the CSO banking Team for Stop the Payout process for the Debit Clients

Sending the Final Report the CSO

Informing the SB / Clients regarding the


Final Positions which have exposed them to Risk.

Checking the Cheque returns are done for the clients in Shortfall

Instructing the CSO regarding the Fund /Securities Transfer at Client Level to

other Segments and Collateral Account. Process Training Process Test

Process Test Score Back Up

Branch Process Manual NCFM / BCCM Certified

Subbroker Revenue Generation comparison with Risk & limits of the SB

Fortnightly Basis Bad Debts and Action taken

Sub Broker Payout File Error Trade Details

Helplines Contact Person Designation

CSO/RO

Appeared/Not Cleared/Not

Name of the Person RM

Week basis On 4th & 14th of Every Month.

Daily after Market Hours

Location

Tel no – Extn

Mr. Bhavin Parekh

Mr. Vishal Kanani

Mr. Vishal Gohil

AVP – Online Risk Mngmt

Sr.Manager – Risk Mngmt

Asst. Manager – Risk Mngmt

Akruti

Akruti

Akruti

(022) 2835 8800 – 333

(022) 2835 8800 – 227

(022) 2835 8800 ‐ 224

Mr. Shoaib Qureshi

Asst. Manager ‐ QA

Premiere House 02240358600 – 291

CHAPTER ‐ XIII Margin Funding

CHAPTER COVERAGE

1. Introduction

2. Policy

3. Account opening for Margin Funding

4. Margin Requirements

5. Buy

6. Sell

7. Funds Payout

8. Shares Payout

9. Risk Management

10. Interest Charge

11. Repayment

1. Introduction

“Margin Funding” allow you to take higher exposure on the funds as well as unlock the value of your existing portfolio & take advantage of investment opportunities in the market without the involvement of fresh funds. One can use the shares in his current portfolio to make fresh purchases in the market.

If utilized prudently, this product can help unlock the value of Securities even during depressed Stock Market conditions and provide customers with the much‐needed liquidity during pressing times.

Advantages:

1. Provide instant liquidity without having to sell your Securities. 2. Allow you to grab investment opportunities instantly without any need to pay first. 3. Leverages your funds available for investments. 4. Benefits like bonuses and dividends continue to accrue to the borrower. 5. Any appreciation in the value of the Securities given as margin would automatically allow

enhancement in drawing power. 6. Interest calculated on the amount utilized & the time for which it is utilized.

2. Margin Funding Policy Margin funding is a facility where client can keep his position to the extent of his drawing power and margin value, where drawing power would be based on respective margin on approved list of securities as specified by Angel Infin Private Limited (AIPL):

1. Facility will be provided against approved Scrips categorized into A, B and C with approved limits and margin requirement of respective Scrip in the said categories. AIPL reserves the right to modify, alter, delete, add any of the scrip appearing in approved list without assigning any reason. In case where the client want to take exposure in any specific scrip (other than the scrips where unlimited exposure is allowed) for more than 0.25% of market cap of the company, then client would have to give higher margin i.e. 30%,40% & 45% on respective A,B & C category.

2. It is necessary to have client’s IT return & balance sheets/net worth certificates & other relevant document as required by AIPL as per KYC guideline issued by RBI on Feb. 21,2005.

3. All clients have to provide upfront margin in the form of securities/Cheques. (Incase of securities as margin, hair‐cut as applicable to various categories of approved securities would apply).In case cheque is given for margin then margin requirement would be fulfilled on clearance of the cheque.

4. If any security is withdrawn from approved list, Client would not be allowed to take additional position in such scrip & if he does so then such additional position would be treated as unapproved. Also, withdrawn scrips provided as security earlier would be required to be replaced by other approved scrips or by cash collateral.

5. Client would have to pay the margin shortfall before the margin percentage falls by 60%. The client would be informed at every stage when the margin Percentage begins to fall from the desired levels. (For Example, client X is having ‘B’ category scrips is required to keep margin at 35%. Each time the margin falls below 35 % client would be informed for the same until only 14% is left (35‐60%of 35) and if the margin continues to remain unfulfilled, AIPL would square off the positions to get the margins back to acceptable levels. Square off would take place at the moment the scrip price comes down to the extent so as to trigger the square off even if the price recovers afterwards Incase of square off, the ‘C’ category scrips would be sold first and then ‘B’ and at last ‘A’ category scrip.AIPL reserves the right to square off in any manner as it decides.

6. Securities purchased will be transferred to Demit a/c of client on which AIPL would have POA and AIPL will have full authority on the securities lying in the demat account.

7. ALL the securities would be valued at last traded/Closing price of either BSE or NSE as per discretion of AIPL but in case of margin requirement, the lowest price during the trading hours would also be considered.

8. In case Square up done by AIPL at its discretion, all the losses in relation to same will be borne by client. AIPL would not be responsible incase the securities are not squared up for any reason like no buyer of securities etc. even if value of securities fall below the debit balance of client in AIPL and client would have to fulfill the margin requirement.

9. The client should confirm the available quantity & unsettled transaction before liquidating the position for any scrip. Any loss occurred due to such transaction would be borne by clients.

10. In case of purchase made by the client is more than the total available limit i.e. margin and funding amount, then AIPL would have right not to accept the whole transaction and client would be responsible for any amount due to broker because of such transactions.

11. AIPL may require, at any point of time, any additional margin on the basis of volatility or risk perception in the scrip.

12. MTM loss can be accepted in the form of cash and/or approved securities or combination of both.

13. If the client want any securities funded by AIPL in his another demat account through off market transfer, he has to pay so much of the amount so as to keep the margin as per norms.

14. There would be no funding on the securities purchased during the No Delivery period or lock‐in shares.

15. The shares purchased/Sold would be used first for Margin funding subject to other things are complied with. If client want to buy/Sell any approved scrip as a normal Buy/Sell (it means not to be considered for margin funding) then client has to intimate the same to us by 4 PM on the same day otherwise the positions would be considered first for margin Funding.

16. If the client is buying same scrip in one exchange and selling it to another exchange then this would be treated as square off transaction unless the client informs otherwise well in advance.

17. The minimum loan amount would be 1 lakh.

18. The interest would be charged on T+2 basis from client.

19. Any credit received in the loan account of the client would be first appropriated against interest due, penal interest and finally, the balance in the principal loan account, if any.

20. The AIPL would charge the interest at such rates with right to revise at its discretion , which would be debited at the end of the month calculated on the basis of daily outstanding.

21. If the client makes default in making payment of interest on time then AIPL would charge 2% penal interest per month over and above the normal interest charged to him.

22. The shares purchased under margin funding can be sold but client’s ledger must have a sufficient credit balance in his ledger at the end of the day of sale, to repay the dues to AIPL otherwise shares would not be released for pay in.

23 Any sell trade done by client for shares lying in margin funding would be released for pay in obligation even if there is any margin shortfall in margin funding subject to condition that the client is not under the risk at angel level after considering all segments(for which client is registered with us) but client has to fulfill the margin shortfall in next 7 trading days otherwise the open position in normal broking books would be squared off to the extent to recover the margin shortfall in margin funding

24. The back dated trades for last 15 days can be funded subject to condition that client should be active on the date of trade which is to be funded

25. AIPL would have right at its sole discretion to add, alter, modify, delete any or all clauses of this policy.

3. Account opening for Margin Funding

The client, who is willing to avail Margin Funding facility, should execute the following documents with the assistance of angel’s relationship manager.

1) Master Financing Agreement ‐ The agreement would be executed between Client & Angel Infin Pvt. Ltd.(referred as “AIPL” afterwards). It would contain all the terms & Conditions between both of the parties regarding disbursement, interest, Margin and Repayment. This is a basic document which would decide the future course of transactions.

2) Irrevocable Power of Attorney – This Contains the Power granted by Client to Angel for opening & operating the client’s Bank as well as Demat account. In simple term, both Bank & Demat account would be under Control of AIPL and AIPL would execute all transaction on the behalf of clients. This power is grated to AIPL because for margin funding facility client has to compulsorily open a specific bank account from where AIPL would meet the client’s exchange obligation after financing to him/her. So it is the only way to give the funds to client.

3) Letter of Continuity – This document states that the facility would be of continuation nature and disbursement and repayment can happen any number of time within the limits of amount sanctioned to client.

4) Demand Promissory note – By this, Client Promises to repay the loan as and when called by Lender i.e. Angel Infin Pvt. Ltd.

All the above docs should be sent by branches to CSO after completion of all the requirements. The branch should make ensure that all documents as required are in place and photocopies are verified with originals. The responsibility of Credit Verification i.e. sanction amount, interest rate to be charged etc. of the clients entirely lies at the Branch end. CSO has the right to approve or reject any or all of the parameters.

Opening of Demat & Bank Accounts under POA of AIPL

For Margin Funding facility, two bank accounts (Current account & savings account with Kotak mahindra bank) and one Demat account would be opened in client’s name. The current account & Demat account would be used for margin funding (has to be opened under POA of AIPL) and savings account would be opened to facilitate fund transfer to the client. Both the account opening forms would be part of our Margin Funding Loan Document Kit.

The current bank account of client would be opened in Mumbai under POA of AIPL and client would have no control on this account. The margin funding to client would be done in this account so that client’s exchange obligation would be met through this account. (This account would be Zero balance maintenance account).

The savings account would be opened with Kotak bank’s branch nearest to client’s location so that client is able to operate it easily. This account would be Zero balance account and client will get cheque book and ATM card and phone banking facility for this savings account. The ATM can be used at any of Kotak and HDFC bank’s ATM network free of charge. The payout to client would be given in this savings account. (Payout can be given by DD also on request of client ).

The Branch will coordinate with Kotak mahindra bank at local level to open the bank account of the client, as the both current(with Mittal court, Mumbai) & Savings (Local branch of client location) account can be opened by any Kotak bank branch.(it means the Client residing at kolkata, both current and savings account can be opened by kotak’s kolkata branch). This process would make the bank account opening process faster as branches can resolve the bank account related discrepancies at local level and get the account opened earliest. For this branch has to provide the bank account opening form duly filled up with all respects to Kotak mahindra bank. The Power of attorney would be given from CSO end to Kotak bank directly for all cases.

The demat account would be opened with CDSL DP of Angel broking limited under POA of AIPL irrespective of the fact that client is already having demat account . For Demat account, client would have to give POA in favour of Angel Broking Limited also for Auto Pay in/Pay out against the exchange obligation of client, in normal course, the way its currently carried out. The branch will send DP forms duly filled up to CSO for account opening.

In addition to above, After opening of bank account as well as Demat account, the client would be mapped for margin funding

Please note that he above mentioned documents / procedures are mandatory, & in any case no account will be opened if any of the documents in not submitted / any discrepancy is found in the same.

The charges of account opening would be debited from client ledger.

4. Margin The client has to give the margin to AIPL before availing the margin Funding facility. The margin can be given either in cash or in the form of share. The shares given as margin must be in approved scrip list of AIPL. The shares would be valued after applying the appropriate haircut on it.

In case of cash margin, the cheque should be in favour of Angel Infin Pvt. Ltd. In case of margin in form of shares, then shares must be transferred from client’s demat account to AIPL account and CMR should be given to branch which in turn send it to CSO for updation in records.

Limit setting Once the client has given the margin, The system would calculate the limits available to client but this would be on higher side i.e. taking into consideration that client would buy all ‘A’ group Scrip only. IF client is going to buy ‘B’ & ‘C’ group scrip, then client has to calculate how much funding would be available to client on the margin given by him.

Explanation: If a client has given margin say Rs. 1 lakh then system would fix the limit of Rs. 4 lakh assuming that all ‘A’ category scrip are going to be bought. ( On A group margin is 25%, so funding would be 3 lacs and total buying allowed would be 4 lacs). If client want to buy ‘B’ category scrip, then he can buy shares of Rs.285714/‐ i.e. 35% margin on B category so taking 1 lakh margin buying allowed would be 100000/35%=285714/‐)

5. Buy The client would be made available the list of approved scrips and Funding percentage allowed on them through back office login. The client would buy/Sell shares from his normal trading account and if client has given the margin then only approved scrips bought by client would be considered first for margin Funding and remaining would not be considered for funding purpose for which client would have to make full payment as per normal transaction. The client would be able to view the trades which are considered for margin funding through back office login.

The funds to the extent of buying obligation against approved scrip subject to funding limits set for client, will be transferred to Client Kotak bank account (POA) from AIPL Bank A/c. The funds are further transferred to broker’s account from Client’s POA account to meet the exchange obligation on T+2 Day. The amount of funding given to client would be reflected in client’s ledger and on this amount interest would be charged.

The shares are credited in client DP account (under POA of AIPL). The shares lying in such Clients DP account will be then transferred to AIPL A/c on T+2 day.

Shortage/Auction :‐ Incase client has not received full quantity of shares as bought then the no. of shares delivered short may be either given the delivery after 2 days or payout of funds can be received by the client. In case there is no delivery of shares and Auction payout is received then the amount would be credited in client’s account on payout day and No. of shares short would be reduced from client’s holding under Margin funding.

Buy Process

6. Sell

The client would sell the shares from his trading account as a normal and if the shares sold by the client are lying under margin funding facility then these shares would be taken first as sold unless the client informs otherwise to branch by 4 PM on the day client has sold the shares.

The sales proceeds are credited to client’s bank account (under POA) on T+2 day and than further transfer from client POA Bank account to AIPL bank account would be done.

The shares earlier transferred to AIPL pool A/c, will be Transferred back to Client POA A/c to the extent of quantity sold , from where broker would debit the client account to meet the exchange obligation.

After deducting the Principal Amount & interest charged, the balance amount will be margin of client to be used either for further purchase of shares or Pay‐out to client (as the case may be).In case of funds payout, the amount would be transferred to client’s savings bank account (Kotak) or DD to be issued as per request by client.

Sell Process

7. Funds payout

If the client wants to withdraw the funds, then withdrawal would be allowed only to the extent that after withdrawal the margin is maintained as per the norms. If the withdrawal request can be processed then funds would be transferred to Client’s Kotak saving bank account or issue a DD to client as per request of the client.

8. Shares Payout If the client wants to transfer the shares to his Demat account, then withdrawal would be allowed only to the extent that after withdrawal the margin is maintained as per the norms. If the withdrawal request can be processed then shares would be transferred to client’s demat account from AIPL account after obtaining the CMR for the Demat account where the shares are to be transferred.

9. Risk Management The client has to maintain the margin at all times as per the requirement. The risk management team would keep a close watch on all the client’s position and incase the margin is required from the client then client would be informed accordingly from CSO. The client would have to meet the margin requirement before the square off triggers. The square off would trigger once the margin percentage goes down by 60%. In case the client is having various categories of shares then the weighted average margin requirement would be considered i.e. the combined effect of category of shares and margin percentage would be considered. Incase after informing to client and the margin requirement is not fulfilled then square off would take place and C category shares would be sold first and after it B and A category would be sold. The selling would be done to the extent the margin comes to the required level and after square off client would be informed for the same.

10. Interest Charge It is to be noted here that, the interest on funding amount will be calculated on Daily outstanding i.e. ledger debits and posted in client’s ledger at the end of the month. In case the client fails to pay such interest , penal interest of additional 2% p.m. may be levied to the client. The Ledger of client would be sent on quarterly intervals.

11. Repayment Every sell off done by the client would be first adjusted against the interest charge and than towards the loan. The client can repay the loan and again take it till the agreement is active. If client want to repay and close the account, then client would have to repay whole debit balance and the interest charge till the date of repayment and once there in no dues to client the account can be closed and if any payout is due, it would be given to the client.

CHAPTER ‐ XIII Technology at Angel

1.

2.

3.

4.

5.

6.

7.

8.

9.

CHAPTER COVERAGE

How Importance of IT for angel

What are the Hardware requirements for our clients

What Service standards which angel follows for an ideal IT setup

Which are the different technologies which angel provides for connectivity

For all exchanges: cash, F&O & commodities

Processes followed by IT at regional branches.

Annexure 1: Odin checklist: followed everyday

Annexure 2: Wan link testing: followed on weekly basis

Annexure 3: UPS testing: followed fortnightly

10. Angel – Advancing with technology

11. New Branch Commissioning

1.

2.

Importance of IT for Angel

The rapid advances and the paradigm shift in the attitude towards

adopting the latest technology have changed the broking industry in

recent years. This massive orientation has resulted in the process of cutting down

heavily on operational costs, the benefits of which are being ultimately

passed on to the clients. Angel provides its customers with the latest technologies available. Thus, technology speeds up, and further enhances, the flow of information

between the trading floor and the end customer, which is crucial in

today’s fast paced trading environment. This, in turn, has given Angel a competitive edge over other broking

firms.

Fig. 1

Hardware requirements for the clients

Following are the Hardware requirements:

PC configuration: 2.2 GHz Core 2 Duo, 1 GB RAM, 80 GB Hard Disk, CDROM / DVD ROM, K3/Mouse/LAN card

10/100. Operating System: Microsoft Windows 2000 Professional (with Service Pack 4) or XP Professional (with Service Pack 2).

Effective Antivirus Software, which the clients have to regularly update with latest patches, to avoid virus problem. The clients also have to make sure they update the Operating System

with the latest Windows update patches which are released by Microsoft

from time to time.

Monitor Recommendation: 15” tft to be used for back office & marketing

people. 17” LCD can be used for dealing

17” LCD can be provided to HNI

3. Service standards which Angel follow for an ideal IT setup

Clean & Dust‐free server room with proper AC / cooling. Entry must be

restricted to selected IT personnel only.

Network/computer/power cables near sitting places should be properly dressed & away from the body parts. All the cables should be properly

numbered.

Environment near the PC must be dust free. Proper UPS power with proper earthing should be maintained. Avoid eatables, tea, coffee, soft

drinks near the PC.

Printers: Use proper stationary (Do not use papers punched with holes/

stapled paper/ improper recycled papers). Do not use any stickers for network laser printers. Maintain stock register for incoming/ outgoing material with all details.

All processes instructed from Angel IT‐CSO have to be followed strictly ‐ such as ODIN checklist, WAN link testing, Activity of the day report,

MIS specifications/Inventory details, UPS testing.

Patch Deployment – Windows Antivirus: Regularly update all O.S with

latest windows patches. Also have proper antivirus in place, which should be regularly updated.

4. Different technologies which Angel provides for connectivity

Different technologies available for connectivity are:

Technologies available for connectivity are:

4.1. PSTN Dial Up:

Advantages: • No Capex • Fast & Easy deployment • Good for initial setup

Disadvantages: • Supports only one PC • Costly for long hours. • Depends on condition of line.

4.2. ISDN Dial Up: • Better quality of line. • Multiple terminals on one single line. • Low Capex.

4.3. Private V‐Sat Network:

Advantages: • Stable and cost effective connectivity. • Not exposed to environmental condition. • Faster delivery & deployment.

Disadvantages:

5.

• Initial onetime cost & recurring cost involved

• Higher response time.

4.4. ADSL / Fixed ISDN Line:

Advantages: • Higher band‐width at lower cost. • Fixed cost irrespective of usage. • No capex – CPE provided by Tata.

Disadvantages: • Availability depends on Tata feasibility.

4.5. Tulip – RF Wireless Connectivity

Advantages: • One time installation cost & recurring cost involved • Better response than V‐Sat. • ISDN backup irrespective of the solution. • Fixed cost irrespective of.

Disadvantages: • Site feasibility is a must.

For all exchanges: Cash, F&O and Commodities.

5.1 ODIN Diet Snapshot: Single Client Code (Exhibit.1)

Exhibit.1

6.

5.2 ODIN Client Snapshot: Multiple Client Codes (Exhibit.2)

Exhibit.2

Processes followed by IT at regional branches:

Following “ODIN Checklist” daily as per the excel sheet.(Annexure.1)

Pro‐actively checking the UPS status, Network equipment, Servers on daily basis.

Testing of ODIN Backup Server occasionally, to ensure that it is

functioning properly and can be used during disaster.

Hardware Requisition Slip for ordering any hardware from CSO. Filling up Call Reports – for Desktops calls attended. Testing of UPS on weekly basis for backup time.

Material movement form for inter‐branch transfer of material. Branch visit report – IT person visiting the R.O from CSO.

Maintaining stock register for material received & issued.

Approval of price from IT, CSO before placing local orders.

Daily MIS report, Server downtime reports – reporting to CSO. Carrying out preventive maintenance periodically from vendors for printers UPS.

6.1. Documentation:

Maintaining proper filing system for installation reports, delivery challans,

vendor quotes, HRS, Daily call reports.

Maintaining machine specifications up‐to‐date for desktops, servers,

printers, network equipment, WAN links & ISP’s, internet connectivity,

UPS, IP list for local LAN & server.

Maintaining test reports, WAN link testing and UPS testing.

(Annexure.2 & 3)

6.2. Server Hardening:

Server Harding is the succeeding service from the Server Scanning services,

by hardening or closing the vulnerable holes found in the Server. Servers are depended upon to deliver data in a secure, reliable fashion.

There must be assurance that data integrity, confidentiality and availability

are maintained.

One of the required steps to attain this assurance is to ensure that the servers are installed and maintained in a manner that prevents

unauthorized access, unauthorized use, and disruptions in service.

Server hardening is the first line of defense against a possible intrusion.

The process ensures that all non‐essential services are shut down and a strict access control policy is put in place. All relevant security updates are applied to the system to safeguard against

all known vulnerabilities.

6.3. Some of the general steps included in the Server Hardening procedure

include:

Installing the operating system from an IT approved source.

Applying vendor supplied patches, latest service packs & windows patches, hot fixes.

Removing unnecessary software, system services, and drivers.

Setting security parameters, file protections and enabling audit logging Implement a Hardware Power On password.

Disabling or changing the password of default accounts.

The server must run legally licensed versions of the operating system and

software. The server must run only necessary services. All unnecessary services should be shut down.

After the administrator determines what default accounts are required on a server, all other default accounts must be disabled.

6.4. Knowledge Management:

The idea behind having a knowledge base is to create a database for sharing knowledge across all the Angel branches.

Solution for any problem worked out by a particular branch should get

updated in this system & all other branches can get the ready solution. This

will help us reduce our down‐time. For this we have created user IDs for all the regional Hub’s to access this

software, with the help of which they can share knowledge regarding

client’s issues as well as server‐related issues. Following are the two ways to access this software. (Exhibits.3&4)

1. Through MPLS : “http://196.1.115.136/helpdesk”

2. Through Internet : http://203.199.13.173/helpdesk

Exhibit.3

Exhibit.4

7.

Annexure.1

ODIN Checklist: Followed everyday

8.

Annexure.2

WAN Link Testing: Followed on weekly basis.

9.

Annexure.3

UPS Testing: Followed fortnightly

10.

11.

Angel – Advancing with technology

Angel perennially endeavors to tender to all the clients the best of quality and value‐added services that shall prove useful to their functioning.

It has always been Angel’s quest to make our services very easy, convenient and comfortable for all our clients to access, utilize and reap the benefits.

Angel has always laid the emphasis on technological innovations and has believed that with better, faster, newer and more efficient technologies coming in, the same should necessarily be forwarded to all our clients so that they can have the best of services delivered to them.

We provide dedicated terminals both at the Branch premises and at the premises of the client.

Our latest technology facilitates trades in BSE/NSE, Cash /Derivatives Segment through a single connectivity.

We also enable installation of BOLT / NEAT terminals at remote places via advanced connectivity technology.

New Branch Commissioning

We have an exclusive team at the CSO to handle new branch roll‐outs.

This team takes care of the entire setting‐up of upcoming offices across India, right from the designing of the data center to implementation, recruitment of IT personal, procurement of IT equipment, setting up of processes, till the time the Data Centre is handed over to the operations team.

Escalation Matrix

Network (022‐28358800)

ISDN, L/L , TATA

Response ADSL & Fixed ISDN VSAT SAAZ NMS Time

Level 0

Level

1

NAME

Sachin

Nayan

Ext No. NAME Hema Chandran Madhavi Pawar Vijay /Kiran Naralkar

Ext No. NAME

404

174 Mohammadi

411 Siddiqui

Ext No.

297

Immediate

After 15 min

Uttekar 410 Kartik

185

Level

Malcom

Ramdas

Satish

Bhupendra

231

231

After

30 2

Level

Bhoir 440 Shekhar Birari 412 Kartik 388 min

After

45 3 Jayraj Joshi 423 Jayraj Joshi

Systems (022‐28358800)

System Admin Desktop

426 Jayraj Joshi 426

Application (Odin etc.)

min

Response Time

Level NAME Ext No. NAME Ext No. NAME Ext No.

408 /

After 15 1

Level

Jitesh/Uday 407 Dilesh/Vishal 407 / 433

Uday 407 / 433

Shetty

Roopesh

406 408 / 406

408 /

min

After 30 2

Level

Randhir

Farhad

409 Jitesh/Randhir 407 / 433 Vaibhav

Devang

406 408 / 406

min

After 45 3

Level 4

Mavji 189 Farhad Mavji 189

Ajay Govale 408

Kuntesh Desai 786

min

CHAPTER – XIV Commodities Operations

CHAPTER COVERAGE

1. Introduction

2.

3.

Essential Reports to be viewed by branches

Deliveries & Settlement

1. Introduction

The ensuing pages contain the list of procedures to be followed by the branches in relation to Commodities Operations not specifically covered elsewhere. Hence KYC, Banking, Compliance, Dealing, Risk Management, Marketing procedures relating to commodities are not covered here.

The branches are expected to ensure compliance with these laid down procedures.

The chapters are divided as follows: • Functioning of Back Office Software • Collaterals • Deliveries & Settlement • Commodities SB registration • Help Line

2.

Essential Reports to be viewed by branches

Exhibits related to Commodity Back Office Operations. Angel Commodity Back Office.

Exhibit A.1

To begin with, the Branch should access Angel Back Office by going to our Website at http://www.angelbackoffice.com/

Exhibit A.2

Select the relevant Company, e.g.: Angel Commodities Broking (P) Ltd NCDEX, for the purpose of logging in the system for either of the Segments i.e. NCDEX & MCX.

User’s Login: Exhibit A.3

On selecting the Company, the login screen opens (Exhibit A.3) Enter the distinctive User Id and Password allotted to the Branch, in order to view the next screen.

NCDEX Back office Main page. Exhibit A.4

On entering the user name & password, the above screen is displayed (Exhibit A.3) This is the main screen, through which all subsequent Reports can be accessed, depending on the rights allocated to the Branch.

Links under the Back Office Report:

MCX Client‐Wise Margin:

Path: Share Accounting → Share Reports →FO Reports→ MCX Client‐ Wise Margin

This is a customized report which gives client‐wise basic funds status for the segment , taking the Margin Levied on the client’s open position on a given day into consideration.

We can see the Client Bill Amount (MTM) for the day, the Ledger Balance, the Net Cash Available (after adjusting the Bill amount with the Ledger Balance, the Collateral (i.e. Cash & Non Cash) Available, Total Margin (i.e. Initial Margin, Exposure Margin & Additional Margin) and lastly, the Net Funds (i.e. shortage /excess )after adjusting the Net Cash Available and the Total margins.

MCX Confirmation Report:

Exhibit A.5

Path: Share Accounting → Share Reports →FO Reports→ MCX Confirmation Report. The Confirmation report gives the details of the trades executed for a client on a particular date. This report gives similar details as provided in the Contract Note to a Client. The report displays details of the commodity and the contract in which the client has traded along with its Order No, Trade No, Date &Time of trade, Sell/Buy Quantity, Rate, Terminal No., and contract value, along with the taxes levied on them.

Exhibit A.6

MIS Report :

Path: Share Accounting → Share Reports →FO Reports→ MCX –MIS Report.

The MIS Report consists of various customized reports which help one do Business analysis.

Exhibit A.7

Sauda Summary :

This report gives the details of the total Saudas done by a client / Sub broker for the selected period in the report. The report can be viewed Branch‐Wise, Sub broker‐Wise, Client‐Wise, and Commodity – Expiry date‐Wise.

Net Position :

Exhibit A.8

This report gives an important overview of the daily trading activities, with details of a client’s Net Open Position for a commodity on a given Expiry date.

Exhibit A.9

Note: In this report the date is an important field, without which the data reflected would be incorrect.

Turnover Report :

This report gives details of the Total Volumes generated and the Gross Revenue earned through trading by the clients of a given branch, for a selected date. The report can be viewed Branch‐Wise, Sub broker‐Wise, Client‐Wise, and Commodity – Expiry date‐Wise. The report can be customized by using the Option Report Type. The Turnover & the Levies which give the details of other charges levied on the client trade like Turnover /Transaction Charges, Stamp Duty will be displayed.

Exhibit A.10

Bill & Contract Printing:

Path : Share Accounting → Share Reports →NCDEX_Print_ Reports

• Through this option, the client / sub broker can print bills & contracts.

Exhibit A.11

Finance accounting: Finance Report: Display Report:

The Link provides the Sub‐link for the financial details for the Client /Sub‐ broker/Branch.

Party Ledger: As the name suggests, it shows the ledger of the client. The ledger consists of the MTM Bill posting, the Banking entry, the Other Charges entry etc.

General Ledger: The ledgers of the Sub broker Mapped under the branch can be obtained from the General Ledger. The ledger may consist of the Provisions for the brokerage Shared with the Sub broker by Angel, other Charges levied on the Subroker.

Utilities: Utilities service

Exhibit A.12

The link gives way to further sub‐links like Client Details and Research Report.

In Client Details, the report shows details of the Clients, mapped under each

Branch. The report provides details like the Client Name &Code, his Address, and the Branch Tag & the Sub broker Tag which the client is mapped under, as well as the PAN card number, DP Account & Brokerage slab details, the active / active Status along with the activation date.

The Angel Research report ‐ all the research views & material provided by Angel can be seen through this link.

Exhibit A.13

3.Deliveries & Settlement

Commodity Physical Settlement Introduction:

The deliveries in commodities should be planned well in advance as the delivery involves:

1. Sales Tax Law / VAT laws of the state where the delivery center is situated. 2. Separate Demat Account in NSDL & CDSL 3. Warehousing Cost 4. Other procedures : The Commodities traded on the Exchange platform as on date can be broadly classified into the following three categories a. Compulsory delivery: On the expiry of the contract, all the outstanding open positions mandatorily result in delivery. b. Seller option contract: Delivery is marked to the corresponding buyer randomly, on receipt of the valid delivery intention by the Seller to give delivery. Such buyers will compulsorily have to take delivery, whether they have requested for delivery or not. c. Intention Matching Contracts: On expiry, exchange matches Intentions for both the buyer and the seller. Upon successful matching of request with request to commodity and warehouse location, delivery is allocated.

For more details on delivery procedures, please visit NCDEX physical delivery guide using the following path: http://www.ncdex.com/Downloads/ClearingServices/21§2§Physical_Deliv ery_Guide_06July07.pdf

Pre Requisites for Delivery

Apart from a trading account with the respective exchange, there are the following pre requisites:

Commodity Demat Account

Deliveries may take place in Demat form or in the form of warehouse receipts. It is mandatory to open an electronic (Demat) account with both the depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for taking delivery of commodities, since the pay‐out may be received at either of the depositories and currently there is no provision for Inter‐depository transfers.

Sales Tax / VAT Number:

Both seller & buyer should have sales tax registration at the location of the warehouse. In case the client does not have a sales tax registration, he has to appoint a C&F agent for the same. Angel Commodities Broking Pvt Ltd can offer these services as a C&F agent exclusively for our clients in locations where they do not have Sale Tax Registration. Presently, we have registration numbers at Gujarat, Delhi, Madhya Pradesh, Tamil Nadu, Maharashtra & Karnataka. Clients have to submit their / agent’s Sales Tax information at the time of tendering their delivery intention. Buyer clients have to make pay‐in for the relevant sales tax amount along with delivery funds pay‐in as mentioned earlier. Pay‐out of sales tax amount will be given to seller clients by E+5 day. Seller client has to generate and send the Invoice to buyer client within 2 working days after Sales Tax Settlement is completed. Buyer client will receive the bill after Sales Tax Settlement is completed.

Delivery Policy at Angel:

1. All deliveries must be planned and intimated to the Head‐Office at least 5 days in advance of the contract expiry. The delivery may be either a delivery of sale (obligation to give delivery) or a delivery of purchase (obligation to take delivery). We are enclosing herewith standard formats (as Annexure 'A' and 'B') for the same. The client must give their intimation as per the formats enclosed. In case of intimation to take deliveries (Refer to Annexure 'A'), you have to indicate your preferred location for deliveries. Preferred location is only indicative of client's preference. That in no way means that the client will inevitably get the delivery in the specified location. If the deliveries are from centers other than the preferred location, the client will have to accept his delivery in any other centre where the delivery is received and marked to him by the Exchange.

2. If client is either giving or taking delivery, the onus to meet the Sales Tax or VAT obligation lies with the client. In case he is appointing a C & F Agent, he must intimate the same to the CSO in the prescribed format (As per Annexure A & B)

3. All open positions of clients in respective contracts on the final expiry date should be backed up by deliveries and/or funds, and the same is to be intimated to the CSO at the time of making the request for delivery.

4. Defaults The client has to bear all the penalties levied by the exchange on account of defaults relating to deliveries, like sales tax number, Demat account number, impure quality , position limits etc, as specified from time to time by the Exchanges. The penalty percentages that the exchange levies depend upon

the category under which the commodity falls, & the penalty percentages are displayed in the contract specification available on the exchange website.

5. Margin The client has to pay the tender period margin from the start of the tender period till the expiry of contract. Tender Period refers to the trading hours during the last 5 working days prior to, & including, the expiry date of the contract.

Other additional information

1. ISIN Information Once buyer/seller gets delivery in Demat form, he has to check the validity of the ISIN. The validity of the ISIN could be checked on the Exchanges’ websites. The link for the same is http://ncdex.com/marketdata/hist_isin_details.aspx (NCDEX) http://www.mcxindia.com/demat.aspx (MCX).

Every ISIN has a validity date and a final expiry date. If the ISIN is valid on the settlement date for the next expiry contract, he can sell the same in the said expiry contract. If the validity period is over, he has to get the commodity revalidated to give delivery on the Exchange platform. However, if validity and final expiry dates are the same, then it cannot be sold on the exchange platform. It has to be remitted and sold in the physical market.

ISIN Information ISIN

Final

Premium /

Contact Contact

ISIN descriptor Validity Grade Expiry Discount(%) Address Number Person

Jeera ‐ NCMSL

INC000051119 Commodity

05 May

Date

05 Sep

‐0.10

Behind Armaan Hotel Near Hero Honda Showroom

02767 ‐

Multilink Point

2006 JEERA12 2006 Unjha‐ Sidhpur Highway Unjha 384170

395996 ‐

For example, in the above ISIN, the commodity is valid upto 05 May 2006 and its final expiry date is 05 Sep 2006. Thereby the client can sell the same for contracts expiring upto April without any revalidation. For selling in contracts from May 2006 upto August 2006, he can do the same by revalidating the commodity. Since the above ISIN is expiring on 05 Sep 2006, it cannot be sold in contracts expiring from September 2006 onwards and has

to be compulsorily rematerialized as the same cannot be marked for delivery at the exchange.

Note: At the time of Re – validation, it is not necessary that the Validity of the ISIN will be extended; it depends on the Commodity’s Quality.

2. Revalidation The beneficiary holding the commodities under an expired ISIN cannot deliver the commodities to the exchange and will make a request for revalidation to the warehouse in the prescribed form. The client has to pay the assaying charges applicable to the commodity. Once the commodity is passed he gets the Demat credit with a new ISIN no. Please note that there will be deduction in the quantity of the commodity received after revalidation as per the standard deduction % prescribed by the Exchanges applicable towards sampling, moisture loss etc.

3. Warehouse Cost The warehouse cost has to be borne by the holder of the commodity till the time he holds the commodity in the warehouse. Warehousing cost differs from commodity to commodity as prescribed by the warehouses from time to time. In case of MCX, the exchange periodically issues circulars with respect to the warehouse charges applicable to various commodities. In case of NCDEX, the indicative warehouse charges for various commodities are displayed in the following link http://www.ncdex.com/ClearingServices/Clearing_Services_others.aspx

4. Remat If client intends to take physical delivery, then he has to make a Remat request. Remat request form has to be submitted at the DP. DP generates the Remat request number. The client can contact the warehouse for the physical delivery. The client can send his representative to the warehouse along with an authority letter, photo id proof and the acknowledged remat request slip.

5. Websites The following websites for MCX & NCDEX respectively can be referred to for further details.

• http://www.mcxindia.com/ • http://www.ncdex.com/aboutus/index.aspx

Note: For further understanding & clarification, please refer to the monthly settlement calendar issued by the Exchanges from time to time.

To,

Annexure ‘A’ (On the client’s letterhead)

Intimation to take delivery

Commodities Operations Team Angel Commodities Broking Pvt Ltd. G‐1 Akruti Trade Center, Road no – 7, MIDC, Andheri (E) Mumbai‐400093 Fax No.28398850

Sub: Intention of Taking Physical delivery

Sir,

We wish to take the delivery of __________ (Commodity) of _________ (Quantity) at the ______ (Exchange) platform through ____________ (Name of the Commission Agent) in the ____________ (Commodity & Expiry) contract. Following are further details:

Commodity ISIN Qty

Location CDSL/NSDL

We request you to transfer the said Commodities to the Commodity Demat Account mentioned below. Sale Tax (VAT) details Person/Entity Name & Address State Sale Tax Number VAT Registration Number

Demat A/c. details are (for CSDL): DP Name: DP ID: A/C. No.:

Demat A/c. details are (for NSDL): DP Name: DP ID: A/C. No.:

We certify that all the information mentioned above is correct and we undertake to maintain all records in our books for necessary inspection and audit by the Exchange/Government Authorities. We further confirm that the delivery given to the Agent as mentioned above shall be deemed to be delivery received by us under the regulation.

Signature& Stamp of the client

To,

Annexure ‘B’ (On the client’s letterhead)

Intimation to give delivery

Commodities Operations Team Angel Commodities Broking Pvt Ltd. G‐1 Akruti Trade Center, Road no – 7, MIDC, Andheri (E) Mumbai‐400093 Fax No.28398850

Sub: Intention of Giving Physical delivery

Sir,

We would like to give the delivery of __________ (Commodity) of _________ (Quantity) at the ______ (Exchange) platform through ____________ (Name of the Commission Agent) in the ____________ (Commodity & Expiry) contract. Following are further details:

Commodity

ISIN

Qty

Location

CDSL/NSDL

Sale Tax (VAT) details Person/Entity Name & Address State Sale Tax Number VAT Registration Number

Demat A/c. details are (for CSDL): DP Name: DP ID: A/C. No.:

Demat A/c. details are (for NSDL): DP Name: DP ID: A/C. No.:

We certify that all the information mentioned above is correct and we undertake to maintain all records in our books for necessary inspection and audit by the Exchange/Government Authorities. We further confirm that the delivery given to the Agent as mentioned above shall be deemed to be delivery received by us under the regulation.

Signature& Stamp of the client

Helpline:

Concerned person Location Contact No.

Mr. Vishal Kachalia Akruti 28358800‐ 471

Mr. Yogesh Shinde Akruti 28358800‐473

CHAPTER ‐ XV Quality Assurance

1.

2.

3.

4.

5.

CHAPTER COVERAGE

Definition of Quality

Key Benefits of Quality to an organization

Angel’s definition of Quality & QA Policy

Role of Quality Assurance Cell at Angel

BPS

1. Definition of Quality:

The degree to which a set of inherent characteristics fulfills the requirements.

This definition of quality could be further explained if we know ‘what do customers require in terms of quality?’

Fig. 1

In short, Quality is nothing but our perception about QCS.

2. Key Benefits of Quality to an organization:

Fig. 2

3. Angel’s Quality Definition:

Products & Services that totally satisfy and often exceed customer needs & expectations, in all respects, to delight him.

4. Angel Quality Assurance Policy:

“We are committed to being the leader in providing World Class Products & Services which exceed the expectations of our customers, achieved by teamwork and a process of continual improvement”.

Fig. 3

Quality Assurance Cell structure

4. Role of the Quality Assurance Cell at Angel:

FEEDBACK / CENTRALIZED HELPDESK

Helpdesk Process Flow:

Fig. 4

Help Desk at the CSO

The Help desk at the CSO is fully equipped to resolve all queries, feedback, suggestions, escalations or grievances of branches, clients and SB’s with regards to trading & other operational issues.

Help Desk Queries :

Fig. 5

The Help Desk at the CSO receives queries via phone, mails and post, pertaining to all the processes or departments. This centralized desk works under direct supervision of the Head of Operations and Quality Assurance cell. This team is well versed with all the processes of Angel which enables it to provide prompt resolutions to client’s queries. The queries received relate to:

Back Office Software usage • BO training to associates / clients. • Resetting of back office user ID and Password • Viewing the net positions • Verifying details in Client Summary page • Security holdings • Client portfolio • Open positions • Deliveries expected • Ledger positions • Transaction details.

Back Office DP • Viewing of the holdings • Transaction charges • DP ID

Client complaints @ QA cell (CSO)

022‐ 2835 5000

[email protected]

Angel broking, 1st floor, premier house, MIDC, Andheri (e), M‐93

• ISIN no. • Resetting the password for using CROSS • Training on other online DP reports and statements

Banking • Pay – in & Pay – out details • Errors in Pay‐ out markings • Confirmations of pay – out cheques

KYC • Change in personal details • Change in bank details • New a/c opening procedures • Confirmation of required documents • View brokerage slabs • Shifting the code from one SBs / Branch to another SBs / Branch

Demat • Checking the holdings in the pool a/c • Demat status • Information on corporate action • Transfer of shares from pool a/c to DP a/c.

Miscellaneous • Provide internal directory numbers to customers. • Information regarding access to Risk management link • Non‐ receipt of Contract bills • Sauda confirmations • Viewing open positions in commodities • Providing other support functions.

Helpdesk at Branches:

Pre‐Setting & Post‐Setting of a helpdesk at branches is the responsibility of the QA cell at CSO, which involves the following:

Fig. 6

Currently, we have been successful in setting up CRM Desks at 68 branches across Country.

Help Desk Manager Software:

Help Desk Manager IP Address: ‐ http://203.199.13.173/helpdesk

Link: http://196.1.115.136/helpdesk

Unique features of Helpdesk Manager Software:

Fig. 7

Core Activities of CSO Help Desk:

Fig. 8

Centralized Helpdesk can be contacted:

Postal Address : Quality Assurance Angel Broking Ltd. Quality Assurance Cell 1st Floor, Premier house, Plot no‐ 38, Central road, Above Citi Financial, MIDC, Andheri (E), Mumbai – 400093

Monday to Friday : 9.00 a.m. to 8.00 p.m. Saturday : 10.00 a.m. to 4.00 p.m. Telephone no : 022 ‐ 2835 5000 (6 Lines) Email ‐ id : [email protected]

Training

Fig. 9

Branch Helpdesk:

Today Customer Service is employed by organizations to generate competitive advantage over their competitors. Also in today’s economy, the best assets for an organization are its customers/clients. Therefore it is essential to invest in driving customer satisfaction and improving upon the quality of customer service.

Thus, Angel has come with the concept of Branch CRM desk, an initiative of QA. Today we are successfully handling this desk at 74 branches.

CRM Training Module:

Customers are the core requirement for any business and as such there is a need to foster and maintain great customer relationships. Quality Assurance Cell’s initiative is to enhance the communication skills, leadership potential, personal effectiveness and effective selling skills among the employees of the organization so that we can attain our customers delight.

Sub‐Broker Induction

One day seminar is coordinated by the QA cell on monthly basis for new Business Associates associated with Mumbai Regional offices / Branches. For outstation Sub brokers the same is done at respective Regional / Branch offices & depending on the size of associates converted during a particular month.

Agenda during the SB workshop:

Training sessions are conducted by the process owners. Sessions include: Quality Assurance

E‐Broking Commodities

Wealth Management Services Research (Technical Analysis) KYC Risk Management DP / Demat Banking

Highlights:

o The Sub brokers receive the latest updates on products & services & important operational processes. o Training kit comprising of latest research report, brochures, Sub broker process manual, compendium of circulars are distributed to SBs. o SBs get an opportunity to clear all their doubts on operations part. o Also they get an opportunity to interact one‐on‐one basis with our process owners. o SBs can then cascade this information to clients maintaining healthy relationships with clients; trying to attain customer delight

Feedback:

Feedback is collected from the SBs towards the end of every training session; the sub‐Brokers

give suggestions & express their requirements through this feedback form.

Format for Feedback form

Date:

Sub Broker Name: _______________________________________

Sub Broker Tag: ______________ Branch Name: _____________

Dear Business Associate,

Thank you for joining us in the Training Programme. We would request you to share your valuable feedback.

1. Do you need further in‐depth training Programme on operational procedures?

Yes No

If yes, please specify in which topics ___________________________________

2. How would you rate our Training Programme?

Outstanding

Very Satisfactory

About average

Somewhat unsatisfactory

Would you like to specify anything particular?

___________________________________________________________________

___________________________________________________________________

3. How would you rate our Training Facility & Customer Relationship Management?

Outstanding

Very Satisfactory

About average

Somewhat unsatisfactory

4. How would you rate our Training Faculty / Presentation?

Welcome Address Excellent Good Average

E‐broking Excellent Good Average

WMS Excellent Good Average

KYC Excellent Good Average

DP/Demat Excellent Good Average

Banking Excellent Good Average

Risk Management Excellent Good Average

Technical Analysis Excellent Good Average

4. Your suggestion and overall observation on the Programme.

___________________________________________________________________

___________________________________________________________________

Thank you for your valuable feedback.

Based on the feedback received from Sub‐brokers a report is generated.

Quality Assurance

[email protected] www.angeltrade.com

Sample SB Workshop Feedback:

Help line

:

Help line:

Quality Assurance Cell

Contact Person Location Tel no – Extn.

Meghana Ganga Premier House (Akruti)

4035 8600 (258)

[email protected]

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Front Office

The Front Office in any organization is the department responsible for the Brand image of the company. It has an influence role of image building; it is the first and last point of contact for a customer.

QA has initiated in providing training to front office at Regional / branch offices. FO executives can assist the Branch Managers and help him to have better control on facility and admin activities at the branch.

Fig. 10

Training for FO includes: I Front office process manual

II Presentation & Interaction session

Corporate presentation Products & Services Operations Processes

Communication Skills Office Administration (Infrastructure & Facility) Quality Standards Housekeeping & Hospitality

III Vocational Counseling by Regional / Branch head

IV Sharing of KPA’s

Online Operation Trainings

Quality Assurance has taken an initiative to assist in providing online training through VNC for various processes across all branches throughout India.

The Benefits of VNC training are as follows:

1) Easy accessibility 2) Cost Efficient 3) Effective utilization of time and resources.

VNC, or Virtual Network Computing, is software that makes it possible to view and interact with a computer from any other computer or device connected to the internet. VNC is even cross‐platform, so a person using a Windows‐based computer can connect to and interact with a Unix system without any problems whatsoever.

Fig. 11

Voice of Customers The "Voice of Customer" (VOC) is a process used to capture the requirements/feedback from the customer (internal or external) to match customer’s expectation on products and service quality. This process is all about being proactive and innovative to improvise services according to customer needs.

At Angel, VOC is conducted for SBs and Clients across the branches It is conducted twice in a year to

Process Flow for VOC:

Fig. 12

Types of Survey:

Fig. 13

Angel Satisfaction Survey‐(Client & Sub‐broker): This is one the most important surveys conducted by the QA cell. In this survey, QA aims to gather a feedback from Angel Business Associates across the country on the factors like service promptness, staff responsiveness, resolutions provided, and understanding of their needs and problems; as also for their clients. This helps to analyze and identify the performance of Branch with respect to the client servicing. This in turn will help the BPS (Branch Process Standardization) team to standardize the Branch operations and performance.

Quality Feedback Request This is one of the unique initiatives taken by the Quality Assurance Cell to the get client feedback immediately after the registration process. The Quality Feedback Form is send along with the Welcome Kit to our new clients to get their feedback regarding our initial services provided to them. QA believes that customer must be delighted from the time he gets associated with Angel.

Call Evaluation and Monitoring Dealers Call Evaluation Process:

The objective of this process is to standardize dealer services in all branches. It mainly focuses on maximizing the accuracy of trades executed via dealer terminals and providing the clients with the best trade services.

Features:

Fig. 14

Process Flowchart:

Fig. 15

• The call recording systems will be installed for dealers at all branches • Weekly calls will be evaluated by a dedicated team at the CSO. • MIS of the evaluation will be forwarded to the Branch Head and the Management. Along with the above feedback mechanism, refresher and other trainings will be provided to the dealers.

Front Office Executive Call Evaluation Process:

Mock call evaluation & feedback are done on a monthly/ Quarterly basis for the front office executives. This is to improve communication skills, call Quality & ensure / excel client servicing. The evaluation is done on certain parameters which are already defined in the Front office process manual. Each call is rated on a scale and the feedback (evaluation report) is shared with the FO executives & Regional / branch managers once in month. One on one tele counseling is given to each FO executive. CSO Feedback Call Monitoring:

Call Monitoring is the key to improve Call Quality & enhance the outcome of customer service provided to them.

As a Quality initiative, Angel has started with the Call Monitoring program for its Helpdesk executives at CSO and is in a process to initiate it at the branches too.

Fig.4 depicts the Call Evaluation cycle.

It involves various activities like:

• Call Monitoring • Call Evaluation • Feedback • Implementation *HDE ‐> Help Desk Executive

Call Monitoring Cycle

Fig. 16

Training and Evaluation for Help desk:

In order to have the knowledge enhancement for help desk team, periodic test is conducted for the team .The test papers are designed for separate processes in the objective form so as to check their current skill sets on various operational processes as displayed in sample test papers.

The test series are reviewed by the process owners and thereby training is imparted to them on the respective areas to enhance their process knowledge.

Branch CRM desk Call Monitoring:

This is a new initiative taken by quality assurance team. The calls of the CRM desk based across the branches will be evaluated by CSO and feedback will be provided to them in order to improve on the quality of the services provided by the customer through various parameters. Hence, this process will enhance the quality service to customers at all touch points which will lead to “Customer Delight”.

Recording of calls through

Help ‐ Desk Manager

Query evaluation by Supervisor

Feedback / Corrective

measures given

Implementation on Feedback.

Call hitting CSO Help Desk.

Business Process Standardization or BPS

BPS is a QA initiative with a mission to standardize processes throughout Angel branches. This process aims at building a bridge to connect all Angelites across the country to CSO in order to build a uniform system and help share best practices to support our effort to achieve 'Customer Delight'.

Fig. 17

Fig. 18

Branding through Quality: Setting Basic Quality Standards which brings uniformity across Angel for all departmental functions (Recruitment, BD, Dealing & RM, Quality assurance, Facility & research) across branches. Also, it keeps a check on the practices which have an impact on Customer service and make the needed changes and to continuously work at providing 'Good Service' to all Angel customers across the nation.

Standard Operating Procedures (SOP): A Standard Operating Procedures checklist guides us to follow all mandatory process requirements and also keep a check on any non‐compliant practices. It Identifies knowledge and skill gaps at the Branches and recommend necessary trainings or role reversals will also be a part of this process study.

Ops process wise checklist covers:

• Risk Management • Dealing • Banking • KYC • DP / Demat • Branch Quality STD’s • Facility • Help Desk • Business development (B2C) • Compliance • HR • MF Operations • IT

Continual development plan:

The BPS is also a step to build a culture of continuous improvement across Angel, wherein it becomes a part of life. In order to drive this the 3rd important part of the BPS is the Process & Skill Up‐gradation and Support Plan which translates in the form of:‐

• Quarterly Training calendar • Periodical review of BPS actionable

Quarterly Training calendar

The BPS team submits a list of training needs which they have identified during their study of the branch. This includes Skill, Knowledge and also Behavior related gaps at the Branch. The team also recommends the necessary trainings or role reversals. The Training & Development department at CSO then liaison with the branch manager and roll out a training calendar.

The Training modules are customized as per the gaps identified and any new tools introduced to make the processes more efficient.

Periodical review of BPS actionable

Regular reviews of the actions agreed on will help the branches connect to the CSO and any support needed to help the Branch achieve the ideal standard can be timely provided. There is a yearly follow‐up calendar gets issued for the same.

Branch process standardization flow

Fig. 19

Fig. 20

Ratings / Rankings: Rating and Ranking Process is initiated in order to scale improvements towards BPS initiative in regions and branches. The activity is carried out by QA team in cord with CSO Operations Team. Rating process would help branches to understand their current standings w.r.t different processes and areas for improvement.

Branches are rated on quarterly basis on different processes and are ranked on overall performance which enables CSO & branches to understand their current efficiency level. Ratings and rankings acts a Performance Barometer for BPS which further creates a healthy competition among all branches nationwide.

Root cause analysis (RCA):

Root cause analysis report is generated in order to understand the key factors which are making negative deviation for the process. This report helps CSO operations team to understand the quality level of any process and the reason for its standing at the current scenario. RCA Report is being releases at the end of every quarter. Format of the RCA report is been attached in Appendices:

Branch Precommissioning Desk:

Objective:

Enterprise to maintain collaborative efforts towards a new RO / branch set up, to achieve standardization, cut down on TAT for operation & ultimately helps stream line branch activities.

Core Activities:

1) Branch Precommissioning Manual. 2) Establish a branch – CSO connect. 3) Observe & maintain precom checklist. 4) Receive Precom requirements (e.g. Branding, Admin, IT set up). 5) Coordinate with depts. at CSO & follow up. 6) Help the Regional Director / RM to obtain a final go ahead for start of ops.

Once all the requirements as per precom checklist have been fulfilled & formalities are completed by the RO / branch, necessary standards are achieved; the precom desk obtains a NOC from CSO HOD’s.

NOC format

Based on the NOCs a ‘certificate of completion’ is issued to the new RO/branch.

Checklist I: Pre‐ commissioning

Branch Pre‐commissioning checklist

Process DEPT

RESPONSIBLE WORK STATUS REMARKS

Mandatory Requirements

Application for electricity and Telephone connectivity

Registration of shops and establishment license

SEBI registration certificate.

Requirements for CTCL IDs (NCFM Certificates)

NOC for Generators

NOC for Earthing Pit

VSAT NOC if required

Feasibility Check & finalizing for Service provider

Signage permission from municipality (if reqd).

Awareness Pre‐Commissioning manual

Branch Structure

Target date of Commissioning

Region

Branch Head & contact no

Branch Address

Total Area

Flooring

Color code (walls, furniture)

Reception

Managers cabin

Meeting room

Dealing room

Back office

Server room

Store room

Pantry and washroom area

Cabinets and drawers

Glass coding and soft boards

Branch Requirements

Fire Extinguisher

Water Dispenser or supply of Mineral water Bottles

Cash safe

Tool kit

Lcds

Office Printers

EPABX (MOH, Welcome note, PRI)

No: of telephone lines required

Courier Tie up

Installation Of Air Conditioners

UPS / Generator

Compliance Boards

BSE /NSE Boards

Commodities

F&O Board

DP Id Board

Promotional Materials

OUTSIDE BOARD / Signage/ Glow Sign

Internal posters

Envelopes

Leaflets and Brochures

Research Reports: (Weekly reports, Knowledge series, Budget report

Visiting Cards, letter heads

Display Stand

QA Dispenser

Sample Client Welcome Kit

Canopy (for launch program)

A/Cs

Subsidiary bank account

Cash Verification certificate

Petty cash policy document and Vouchers

Connectivity

VSAT / LEASED LINE / ISDN / ADSL

Installation of VSAT

NSE

BSE

NCDEX

MCX

IT Requirements

IT personnel

Technical training for staff

No. of Computers Required/To be acquired from CSO

VSAT Connectivity

Bill PRINTERS

Connectivity Devices

Servers

INTERNET CONNECTIVITY

preparing the network design

Internal Cabling

UPS for Server room

designing a server room like flooring etc.

Rack for Servers & networking Equipments, modems etc

Air conditioning for Server room

Selection of IP scheme

DHCP Server setup

MPLS connectivity for Back office & admin

Segregation of LAN & WAN setup with proper access‐list

Server installation & hardening

Odin installation

ISDN

Broadband connection

Awareness of Manuals

Pre commissioning

HR Manual

Branch Process Manual

Sales Process Manual

SB Manual (RO copy)

STAFF REQUIREMENT

Total no of Staff

No. of Sales/Marketing B2B or B2C

Dealers.

Risk Management

Banking

CRM & FO exec

DP Demat

Subbroker Registration

KYC

No. of Office boys & Security

IT Person

Submission of Employee documents

Appointment Letters.

Creation of Back office ID for Branch.

Creation of E‐mail Id for Branch Staff.

Hr Induction

Salary Accounts of Employees

Creation of Corporate Employee card

Functional Trainings and Online Test

DP Demat

Kyc

SB regn

Banking

Sales (online Test)

Risk Management

Dealing

Launch

Soft Launch

Launch Event( if any, pls mention the schedule)

Helplines:

Contact Person Designation Location Tel no – Extn.

Ms. Fatima Shaikh Sr. Manager ‐ QA Premier House (022) 24035 8600 – 3

Mr. Siddharth Sathe AVP‐ QA Premier House (022) 24035 8600 – 2

Central Support & Registered Office: Akruti Trade Centre, Road No ‐ 7, MIDC, Andheri (E), Mumbai ‐ 400 093.

Tel : (022) 2835 8800 / 3083 7700 Fax: (022) 2835 8811

Corporate Office: 612, Acme Plaza, M.V. Road, Opp. Sangam Cinema, Andheri (E), Mumbai ‐ 400 059.

Tel : (022) 4000 3600 / 2835 9600 Fax: (022) 4000 3699

Premier House Office: 1st Floor, Premier House, Plot No‐38, Central Road, Above Citi Financial,

MIDC, Andheri (E), Mumbai – 400 093. Tel: 4035 8600

Visit us at : www.angeltrade.com

Branch Process Manual-Feb09

Documents

Transcript of Branch Process Manual-Feb09