Shaveta Stock & Securities Pvt

SHAVETA STOCK & SECURITIES PVT. LTD.

POLICIESANDPROCEDUREFORPREVENTIONOFMONEYLAUNDERING(IssuedaspertherequirementsofthePMLAAct2002)

1.FirmPolicy

It is thepolicyof the firm to prohibit and actively prevent money launderingand any activitythat facilitatesmoneylaunderingorthefundingofterroristorcriminalactivities.Moneylaundering isgenerallydefinedasengaginginactsdesignedtoconcealordisguisethetrueoriginsof criminallyderived proceedsso thattheunlawful proceedsappeartohavederivedfrom legitimate origins or constitute legitimate assets.

2.PrincipalOfficerDesignationandDuties

ThefirmhasdesignateditsComplianceOfficerasthePrincipalOfficerforitsAnti-Money LaunderingProgram,withfullresponsibilityforthefirm’sAMLprogram.Thedutiesofthe PrincipalOfficerwillincludemonitoringthefirm’scompliancewithAMLobligationsand overseeingcommunicationandtrainingforemployees.ThePrincipalOfficerwillalsoensure thatproperAMLrecordsarekept.Whenwarranted,thePrincipalOfficerwillensurefilingof necessary reportswith theFinancial Intelligence Unit (FIU – IND)

ThefirmhasprovidedtheFIUwithcontactinformationforthePrincipalOfficer,including name,title,mailingaddress,e-mailaddress,telephonenumberandfacsimilenumber.Thefirm will promptly notify FIU of any change to this information.

3.CustomerIdentificationandVerification

Atthetimeofopeninganaccountorexecutinganytransactionwithit,thefirmwillverifyand maintaintherecordofidentityandcurrentaddressoraddressesincludingpermanentaddressor addresses of the client, the nature of business ofthe client and hisfinancial status as under

Constitutionof Client / ProofofIdentity / ProofofAddress / Others
Individual / 1.PAN Card / 2.Copy of Bank Statement, etc / 3.N.A.
Company / 4.PAN Card
5.Certificate of incorporation
6.Memorandum and ArticlesofAssociation
7.Resolution of Board ofDirectors / 8.As above / 9.ProofofIdentity of the Directors/Oth ers authorized to trade on behalf of the firm
Partnership Firm / 10. PAN Card 11. Registration
certificate 12. Partnership / 13. As above / 14. ProofofIdentity of the Partners/Othe rs authorized

SHAVETA STOCK & SECURITIES PVT. LTD.

deed / to trade on behalf of the firm
Trust / 15. PAN Card 16. Registration
certificate 17. Trust deed / 18. As above / 19. ProofofIdentity of the Trustees/ others authorized to tradeonbehalf of the trust
AOP/ BOI / 20. PAN Card21. Resolution of
the managing body
22. Documents to collectively establishthe legalexistence ofsuch an AOP/ BOI / 23. As above / 24. ProofofIdentity of the Persons authorized to tradeonbehalf of the AOP/ BOI

25. Ifapotentialorexistingcustomereitherrefusestoprovidetheinformationdescribed abovewhenrequested,orappearstohaveintentionallyprovidedmisleadinginformation, ourfirmwill not open the new account.

26. AllPANCardsreceivedwillverifiedformtheIncomeTax/NSDLwebsitebeforethe account is opened

27. Thefirmwillmaintainrecordsofallidentificationinformationfortenyearsafterthe account has been closed

4.Maintenanceofrecords

The Principal Officerwill be responsible for the maintenance forfollowing records

allcashtransactionsofthe value of morethanrupeestenlakhs or itsequivalentinforeign currency;

allseriesofcashtransactionsintegrallyconnectedtoeachotherwhichhavebeenvalued belowrupeestenlakhsoritsequivalentinforeigncurrencywheresuchseriesof transactions have taken place within a month;

1)allcashtransactionswhereforgedorcounterfeitcurrencynotesorbanknoteshavebeen used as genuine and where any forgery of a valuable security has taken place;

Allsuspicioustransactionswhetherornotmadeincash.Suspicioustransactionmeansa transaction whether or not made in cash which, to a person acting in good faith -

SHAVETA STOCK & SECURITIES PVT. LTD.

ogivesrisetoareasonablegroundofsuspicionthatitmayinvolvetheproceedsof crime; or

oappears to be made in circumstances of unusual or unjustified complexity; oroappears to have no economic rationale or bonafide purpose; or

ogivesrisetoareasonablegroundofsuspicionthatitmayinvolvefinancingof the activitiesrelating to terrorism

The recordsshall containthe followinginformation: the nature of thetransactions;

the amount of the transaction and the currency in which it was denominated; the date on which the transaction was conducted; and

the parties to the transaction."

The recordswill be updated on daily basis, and inany case not later than 5 working days

5.MonitoringAccountsForSuspiciousActivity

ThefirmwillmonitorthroughtheautomatedmeansofBackOfficeSoftwareforunusualsize, volume,patternortypeoftransactions.Fornonautomatedmonitoring,thefollowingkindsof activities are to be mentioned as Red Flags and reported to the Principal Officer.

·Thecustomerexhibitsunusualconcernaboutthefirm'scompliancewithgovernment reportingrequirementsandthefirm'sAMLpolicies(particularlyconcerninghisorher identity,typeofbusinessandassets),orisreluctantorrefusestorevealanyinformation concerningbusinessactivities,orfurnishesunusualorsuspiciousidentificationor business documents.

·Thecustomerwishestoengageintransactionsthatlackbusinesssenseorapparent investmentstrategy,orareinconsistentwiththecustomer'sstatedbusinessorinvestment strategy.

·Theinformationprovidedbythecustomerthatidentifiesalegitimatesourceforfundsisfalse, misleading, orsubstantially incorrect.

·Uponrequest,thecustomerrefusestoidentifyorfailstoindicateanylegitimatesource for his or herfunds and other assets.

·Thecustomer(orapersonpubliclyassociatedwiththecustomer)hasaquestionable backgroundoristhesubjectofnewsreportsindicatingpossiblecriminal,civil,orregulatory violations.

·Thecustomerexhibitsalackofconcernregardingrisks,commissions,orother transaction costs.

·Thecustomerappearstobeactingasanagentforanundisclosedprincipal,butdeclines orisreluctant,withoutlegitimatecommercialreasons,toprovideinformationoris otherwise evasive regarding that person orentity.

·Thecustomerhasdifficultydescribingthenatureofhisorherbusinessorlacksgeneral knowledge of his or her industry.

·Thecustomerattemptstomakefrequentorlargedepositsofcurrency,insistsondealing onlyincash,orasksforexemptionsfromthefirm'spoliciesrelatingtothedepositof cash.

SHAVETA STOCK & SECURITIES PVT. LTD.

·Thecustomerengagesintransactionsinvolvingcashorcashequivalentsorother monetaryinstrumentsthatappeartobestructuredtoavoidtheRs.10,00,000government reportingrequirements,especiallyifthecashormonetaryinstrumentsareinanamount just belowreporting orrecording thresholds.

·Fornoapparentreason,thecustomerinsistsformultipleaccountsunderasinglenameor multiple names, witha large number of inter-account or third-party transfers.

·Thecustomerengagesinexcessivejournalentriesbetweenunrelatedaccountswithout any apparent business purpose.

·Thecustomerrequeststhatatransactionbeprocessedtoavoidthefirm'snormal documentation requirements.

·Thecustomer,fornoapparentreasonorinconjunctionwithotherredflags,engagesin transactionsinvolvingcertaintypesofsecurities,suchasZgroupandTgroupstocks, whichalthoughlegitimate,havebeenusedinconnectionwithfraudulentschemesand moneylaunderingactivity.(Suchtransactionsmaywarrantfurtherduediligenceto ensure the legitimacy of the customer's activity.)

·The customer's account shows an unexplainedhigh level of account activity

·Thecustomermaintainsmultipleaccounts,ormaintainsaccountsinthenamesoffamily members or corporate entities, for no apparent purpose.

·Thecustomer'saccounthasinflowsoffundsorotherassetswellbeyondtheknown income orresources of the customer.

WhenamemberofthefirmdetectsanyredflagheorshewillescalatethesametothePrincipal Officerforfurther investigation

Broadcategoriesofreasonforsuspicionandexamplesofsuspicioustransactionsforan intermediary are indicated as under:

Identity of Client

-False identification documents

-Identification documentswhich could not be verified within reasonable time -Non-face to face client

-Doubt over the real beneficiary ofthe account

-Accounts opened with names very close to other established business entitiesSuspicious Background

-Suspiciousbackground or linkswith known criminalsMultiple Accounts

-Largenumberofaccountshavingacommonaccountholder,introducerorauthorized signatory with no rationale

-Unexplained transfers between multiple accountswith norationale Activity in Accounts

-Unusual activity compared to past transactions-Use of different accounts by client alternatively - Sudden activity in dormant accounts

-Activity inconsistent with whatwould be expected from declared business-Account used for circular trading

SHAVETA STOCK & SECURITIES PVT. LTD.

Nature of Transactions

-Unusual or unjustified complexity

-No economic rationale or bonafide purpose -Source offunds are doubtful

-Appears to be case of insider trading

-Investment proceedstransferred to athird party-Transactionsreflect likely market manipulations- Suspicious offmarket transactions

Value of Transactions

-Value just under the reporting threshold amount in an apparent attempt to avoidreporting -Large sums being transferredfromoverseasfor making payments

-Inconsistent with the clients apparent financial standing -Inconsistency in the payment pattern by client

-Block deal which is not at market price orpricesappeartobe artificiallyinflated/deflated

6.ReportingtoFIUINDFor Cash Transaction Reporting

AlldealinginCashthatrequiringreportingtotheFIUINDwillbedoneintheCTR format and in the matter and at intervals asprescribed by the FIUIND

ForSuspicious Transactions Reporting

WewillmakeanoteofSuspicionTransactionthathavenotbeenexplainedtothe satisfactionofthePrincipalOfficerandthereafterreportthesametotheFIUINDandthe requireddeadlines.Thiswilltypicallybeincaseswhereweknow,suspect,orhavereasonto suspect:

Thetransactioninvolvesfundsderivedfromillegalactivityorisintendedorconductedin ordertohideordisguisefundsorassetsderivedfromillegalactivityaspartofaplanto violate or evade any the transaction reporting requirement,

Thetransactionisdesigned,whetherthroughstructuringorotherwise,toevadetheany requirements ofPMLAAct and Rulesframed thereof

Thetransactionhasnobusinessorapparentlawfulpurposeorisnotthesortinwhichthe customerwouldnormallybeexpectedtoengage,andweknow,afterexaminingthe background,possiblepurposeofthetransactionandotherfacts,ofnoreasonableexplanation for the transaction, or

The transaction involves the use of the firmto facilitate criminal activity.

WewillnotbaseourdecisiononwhethertofileaSTRsolelyonwhetherthetransactionfalls above a set threshold. We will file a STR and notify law enforcement ofall transactions that raise an identifiable suspicion ofcriminal, terrorist, or corrupt activities.

AllSTRswillbereportedquarterlytotheBoardofDirectors,withaclearreminderoftheneed to maintain the confidentiality of the STRs

Wewillnotnotifyanypersoninvolvedinthetransactionthatthetransactionhasbeenreported, exceptas permitted by thePMLAAct and Rules thereof.

SHAVETA STOCK & SECURITIES PVT. LTD.

7.AMLRecordKeeping

a.STR Maintenance and Confidentiality

WewillholdSTRsandanysupportingdocumentationconfidential.Wewillnotinformanyone outsideofalawenforcementorregulatoryagencyorsecuritiesregulatoraboutaSTR.Wewill refuseanyrequestsforSTRinformationandimmediatelytellFIUINDofanysuchrequestwe receive.WewillsegregateSTRfilingsandcopiesofsupportingdocumentationfromotherfirm booksandrecordstoavoiddisclosingSTRfilings.OurPrincipalOfficerwillhandleallrequests or otherrequestsforSTRs.

b.Responsibility forAML Records and SAR Filing

PrincipalOfficerwillberesponsibletoensurethatAMLrecordsaremaintainedproperlyand that STRs are filed asrequired

c.Records Required

AspartofourAMLprogram,ourfirmwillcreateandmaintainSTRsandCTRsandrelevant documentationoncustomeridentityandverification.WewillmaintainSTRsandtheir accompanying documentation for at least ten years.

8.TrainingPrograms

WewilldevelopongoingemployeetrainingundertheleadershipofthePrincipalOfficer.Our trainingwilloccuronatleastanannualbasis.Itwillbebasedonourfirm’ssize,itscustomer base, and itsresources.

Our training will include,ataminimum:howtoidentifyredflagsandsignsofmoneylaundering thatariseduringthecourseoftheemployees’duties;whattodooncetheriskisidentified;what employees'rolesareinthefirm'scomplianceeffortsandhowtoperformthem;thefirm'srecord retentionpolicy;andthedisciplinaryconsequences(includingcivilandcriminalpenalties)for non-compliance with the PMLAAct.

Wewilldeveloptraininginourfirm,orcontractforit.Deliveryofthetrainingmayinclude educational pamphlets, videos, intranetsystems, in-person lectures, and explanatory memos.

Wewillreviewouroperationstoseeifcertainemployees,suchasthoseincompliance,margin, andcorporatesecurity,requirespecializedadditionaltraining.Ourwrittenprocedureswillbe updated to reflectany such changes.

9.ProgramtoTestAMLProgram a. Staffing

The testing of ourAML programwillbe performed by the Statutory Auditors of the company

b.Evaluation and Reporting

Afterwehavecompletedthetesting,theAuditorstaffwillreportitsfindingstotheBoardofDirectors. We will address each of the resulting recommendations.

SHAVETA STOCK & SECURITIES PVT. LTD.

10.MonitoringEmployeeConductandAccounts

WewillsubjectemployeeaccountstothesameAMLproceduresascustomeraccounts,under thesupervisionofthePrincipalOfficer.WewillalsoreviewtheAMLperformanceofsupervisors,aspartoftheirannualperformancereview.ThePrincipalOfficer’saccountswillbe reviewed by the Board ofDirectors

11.ConfidentialReportingofAMLNon-Compliance

Employeeswillreportanyviolationsofthefirm’sAMLcomplianceprogramtothePrincipal Officer,unlessthe violations implicatetheComplianceOfficer,inwhichcasetheemployeeshall reporttotheChairmanoftheBoard,ShriBharatBagri.Suchreportswillbeconfidential,andthe employee will suffer no retaliation formaking them.

12.BoardofDirectorsApproval

WehaveapprovedthisAMLprogramasreasonablydesignedtoachieveandmonitorourfirm’s ongoingcompliancewiththerequirementsofthePMLAandtheimplementingregulationsunder it.

SHAVETA STOCK & SECURITIES PVT. LTD.

ClientCodeModificationPolicy

Companyhasmadeandimplementedastringentpolicytoensurethatthereisnocode modificationatanylevelwithanyulteriormotivesuchastransferofprofit/lossormoney laundering fromone entity toanother,or to shieldany unauthorized transaction, etc.

Allgenuineerrorssuchaswrongcodepunching,incorrectscriporquantityarefirstreportedto theBackOfficeInchargeandthentoComplianceOfficerforverifyingthattheerrorisgenuine ornot.TheComplianceOfficerafterverificationpermitsthecodemodificationtoanERROR CODE,asguidedbyExchangeandSEBIcirculars.Itisalsoensuredthatproperreporting through online modification ofsuch transfersintoerror code to Stock Exchange is done.

Nodealeroranyotherexecutivehasbeenempoweredforanycodemodificationonitsown. Furthertoeliminateincorrectornon-existingclientcodes,allclientcodesafterregistrationare enteredintotheclientmaintenancedatabasefacilityprovidedonthetradingterminalsbythe Exchanges.

SHAVETA STOCK & SECURITIES PVT. LTD.

InvestorGrievanceRedressalMechanism

InvestorgrievancescanbefreelylodgedbytheclientsatthebranchorevenatHeadOfficedirectly.Adesignatedemail()hasbeendisplayedonthewebsitetofacilitatetheclientsinlodgingtheirgrievancesonline.Thesaidmailsareacknowledgedbythecomplianceofficeranddetailsarerecordedforimmediateredressal.

ThedesignatedemailidhasbeendisplayedprominentlyonwebsiteandinKYCformalso

SHAVETA STOCK & SECURITIES PVT. LTD.

PolicyforPre-fundedInstruments

Wehaveadoptedasystemwhereinthepaymentsfromtheclientsareacceptedthroughaccount payees’chequesingeneralandalsothroughBankTransfers,RTGS,NEFT.Thephotocopiesorscannedcopiesofthechequesgivenbytheclientsarekeptforrecordsanditisensuredthatthe paymentsaremadebytheclientsthroughtheirrespectivebankaccountsonly.Asamatterof policy, no third party payment is accepted by us.

WithregardstoanyPre-fundedinstrumentsuchasPayOrderorDemandDraft,wherethename ortheaccountno.oftheclientisnotwritten,itisensuredthatproofsoftheclientconfirming thatprefundedinstrumenthasbeenmadefromtheclientbankaccountonlyisobtainedbefore depositing of instrument.

Similarly,incaseofOn-lineelectronicfundstransferthebankaccount/nameofclientismatchedandincasethedetailsarenottherethentheclientisaskedtosubmitcopyofhisbank transactions confirming his bank accounts.

SHAVETA STOCK & SECURITIES PVT. LTD.

RiskManagementSystemPolicies

WehaveaseparateRMSDepartmenthavingmanpowerstrengthof12executivesandheadedby VicePresident.ThebranchesandsubbrokersaredividedamongtheRMSexecutivessothatall the trading locations andall the clients across these locations are monitored on real time basis.

ThetradefilesofbothCapitalMarketFutures andOptionssegmentareprocessedonrealtime basis intraday and the exposures and the MTM are being monitored.

TheClientdepositsareuploadedonthetradingserverandthetradinglimitsaregivenin accordancewiththeirdepositsavailablewithus.ThetradefileisbeingprocessedinourRisk ManagementSoftwareonrealtimebasisintradayandallMTMlossesandexposuresarebeing monitoredbyexecutives.Similarlythepayments,depositedbythebranchesinourbanksonline areverifiedconsistentlybyourBankingexecutives’sothatthedeposits/exposurestoclientscan be enhanced accordingly.

All paymentsduefrom clientsarealsobeingfollowed byuson theT+1daysothatpaymentsare collectedbeforepay-indeadline. Surveillanceonthetradesexecuted bytheclients isalsokeptto avoid any manipulative activity.

SHAVETA STOCK & SECURITIES PVT. LTD.

UnauthenticNewsCirculationPolicy

1.FirmPolicy

ItisthepolicyoftheCompanytoprohibitandactivelypreventanyunauthenticnewsorrumour onanyissuerelatedtotradingonStockExchanges,anyscriporanymanagementofany companyorgroup.Unauthenticnewsisgenerallydefinedasanyunconfirmednewsorrumour thatcouldhaveanyimpactonthenormaltradingorpricingofanyscriporgroupofcompanies. OnlyExchangeissuedcircularsorSEBIclarificationsarepermittedtobecirculatedamong clientsandbranches.Itisensuredthattheauthenticityofnewsoranycircularisderivedfrom legitimate origins, comprising stock exchanges’ orSEBI’swebsite.

2.Outgoingcommunications

ThefirmhasensuredthatallcommunicationchannelssuchasBulkSMSs,BulkEmails,News prop-uponterminalsetcarecontrolledbyrespectiveDepartmentalheadsonlyandalloutgoing communicationsare verified by theManagement prior to release.

The above is practiced both forInternal and External communication.