RMS Policies

RMS stands for Risk Management System - To manage the risk of the company from the volatility of the market.

1. RMS works on the following concepts:

  • 1.1Cash: The clear balance available in the customer’s ledger account in our books.
  • 1.2Margin: The underlying stake provided by the customer in the form of cash, FDR and/or stock to mitigate market (price) or settlement (auction) risk
  • 1.3Exposure:The aggregate of the customer’s obligations arising out of buy + sell trades awaiting settlement in the cash segment and profit/ loss amounts that are yet to be settled on the closed positions.
  • 1.4Exposure multiple:The number of times that exposure is allowed on the underlying margin on the cash segment would have to be made either on the availability of cash margin or on the availability of the stocks (which are to be sold) in our margin account, by executing a transfer before any order is initiated.
  • 1.5Stock qualifying for margin in cash segment transactions:Securities in the approved list of SSPL.
  • 1.6Total Deposit:The aggregate of client deposit available with us in the form of cash, shares (after applicable hair cut) and FDR.

2. NATURE OF CUSTOMER TRANSACTIONS

  • 2.1Intraday - Cash segment: The amounts of purchase (or sale) in a scrip on any trading day that is reversed by the end of the day by making a contra sale (or purchase) of the exact same quantity, thereby nullifying the original position.
  • 2.2 Delivery Trades: The net purchase or sale of a scrip in a client account that is settled by way of a delivery on T+2(or as per settlement schedule). Delivery in respect of sale transactions in the cash segment has to be settled by the client by tendering securities in demat form before the pay-in deadline. Else the client faces the risk of auction.
  • 2.3 Sell against Buying: A purchase order executed on the Exchange today and the (undelivered) purchased stock sold in its entirety on the next trading day. In this case the first transaction would be settled on T+2 while the sale would be settled on the third business day after the purchase transaction

Note – SSPL will not be responsible for any Short payout of security from exchange

3. MANAGEMENT OF RISK
We have margin based automated RMS system. Total deposits of the clients are uploaded in the system and client may take exposure on the basis of margin applicable for respective security as per VAR based margining system of the stock exchange and / or margin defined by RMS based on their Risk perception. Client may take benefit of “credit for sale” i.e, benefit of share held as margin by selling the same by selecting delivery option through order entry window on the trading platform, the value of share sold will be added with the value of deposit and on the basis of that client may take fresh exposure.
In case of exposure taken on the basis of shares margin the payment is required to be made before the exchange pay in date otherwise it will be liable to square off after the pay in time or any time due to shortage of margin.

For Example:
Client ABC trade in Capital Market Segment and having: -

Ledger Balance : Rs.500000/- Cr.
Stock Before Hair Cut : Rs. 250000/-
Stock After Hair Cut : Rs. 175000/-
Total Deposit : Rs.675000/- Cr.

VAR margin on XYZ Ltd is 20%, ABC can take position in XYZ Ltd upto Rs. 33,75,000/- . Margin on position is Rs.675000/- (3375000 X 20%) and he has to make payment of Rs. 28,75,000/- (exposure less Ledger credit balance) before the T+2 Day.

RMS Policy applicable at Present

A. Intraday and Delivery Limit. : Intraday Limits for the client on Credit + Stock (after hair cut) shall be 3 times of var Margin or around 8-10 times of value in front line scrip But, Client may take delivery of maximum 3 times (1 time for Illiquid Scrip) of Credit or A. Stock with Sachdeva Stocks Pvt. Ltd. And such Outstanding is to be cleared by T+2 day.

B. Charges of interest on Outstanding amount if Debit not cleared by T+ Days Although the selling in account with continuous debits may be done by RMS division on any day after T+2,all debits standing for more than T+2 days, an Interest shall be chargeable @ 24% p.a. on such debits from date of debit i.e. the purchase date of stock.

C. RMS Division may sell the stock any day after T+2 days on non-payment, but normally in following Cases RMS Division shall sell the stock, without any prior information to client.

In case of Continuous Debit for last 5 days: Stock will be sold on T+5 day For Example, if Debit Comes in any client code on Monday (i.e 04/04/2013) and it is not cleared by Saturday (i.e. 09/04/2013), then stock of the client will be sold on Monday (i.e.11/04/2013) up to the amount of outstanding debit.

RMS Division/Company shall not liable for any loss arise due to RMS selling on nonpayment as well as loss in case where RMS selling may not be done as mentioned above by RMS due to any reason. Sachdeva Stocks Pvt. Ltd. Reserves the right to change the above policies any time in general or in particular case within the Exchange/SEBI regulations/ guidelines.