NATIONAL COMMODITY & DERIVATIVES EXCHANGE LIMITED
Circular to all trading and clearing members of the Exchange
Circular No : NCDEX/COMPLIANCE-011/2013/297
Date : September 27, 2013
Subject : Annual Compliance Report for FY 2012-13
______
In terms of Regulation 6.2.2 of the Regulations of the Exchange, members are required to conduct an annual review of their business to assist them in complying with the provisions of the Bye Laws, Rules and Regulations of the Exchange. The review shall be structured in a manner that would assist them in detecting and preventing violations of compliance required by the Exchange.
Based on such a review, members whose memberships were activated on or before March 31, 2013 are required to submit an Annual Compliance Report (ACR) for the year ended March 31, 2013 (irrespective of the financial year followed by members) in the format given in the Annexure. The ACR should be submitted in soft form through NCFE Portal as well as in hard copy to reach the Registered Office of the Exchange on or before October 31, 2013.
Members are directed to carry out the review with due care and diligence and report all compliances correctly. Any incidence of wrong declaration in the ACR would attract a penalty of Rs. 1,000/- per instance.
Failure to submit the ACR to the Exchange by October 31, 2013, would be treated as non-compliance and attract a levy of late submission charge of Rs 100/- per day till the date of submission of ACR. The Exchange also reserves the right to take disciplinary action including levying of higher fines /penalties/ suspension of membership, for non-submission of ACR and/or wrong declaration therein.
For and on behalf of
National Commodity & Derivatives Exchange Limited
Amit Mahesh Pujara
Vice President – Compliance, Inspection & Audit
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For further information/clarifications, please contact
1. Customer Service Group on Phone 022 - 6640 6609-12, 011- 2334 4795, Fax 022 - 6640 6899
2. Customer Service Group by e-mail to :
Annexure to Circular no NCDEX/COMPLIANCE-011/2013/297 dated September 27, 2013
(To be given on the letter head of the Member)
Annual Compliance Report 2012 - 13
To
The Vice President
Compliance, Inspection & Audit
National Commodity & Derivatives Exchange Limited
1st floor, Akruti Corporate Park
Near G. E. Garden, LBS Road
Kanjurmarg (West)
Mumbai 400 078
I/We, M/s. ______a Trading Member of the Exchange (TMID______) hereby certify and confirm that for the year/period ended March 31, 2013, have complied with all the provisions of the Bye Laws, Rules, Regulations, Circulars and Directives issued by the Exchange/Forward Markets Commission from time to time, in general and in particular all the specific areas listed in the Annexure of this Report. Details of non-compliance(s), deviation(s) and exception(s), if any, are also listed therein with appropriate remarks.
I/We, hereby declare that the details furnished in the Annexure are true and correct to the best of my/our knowledge and belief.
For and on behalf of ______
(Name of member, TMID)
Place: ______
Date : ______
Signature of Managing Director/Whole Time Director/ Managing Partner /Proprietor/Karta/Compliance Officer
Name: ______
Office seal
Email IDs
Annexure
1. Maintenance of Books of Accounts, Records, Registers etc.
1. / Regulation 7.1, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Sauda Book (Register of Transaction)
2. / Regulation 7.1, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010, NCDEX/COMPLIANCE-011/2011/315 dated October 13, 2011 / Exchange-wise client ledgers
3. / Regulation 7.1, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / General Ledger
4. / Regulation 7.1, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Journals
5. / Regulation 7.1, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Cash Book
6. / Regulation 7.1, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Bank Pass Book / Statements
7. / Regulation 7.1, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Register of Complaints/ Investor Grievances
8. / Regulation 7.1 / Register of Commodities
9. / Regulation 7.1 / Records in respect of Premium / Discount
10. / Regulation 7.1 / Records in respect of brokerage
2. Dealings With Clients
1. / Regulation 6.3, Regulations 6.6, NCDEX/COMPLIANCE-004/2009/269 dated October 01, 2009,
NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010, NCDEX/CSG-003/2011/346 dated November 28, 2011, NCDEX/LEGAL-001/2012/002 dated January 03, 2012 NCDEX/LEGAL-010/2009/295 dated October 23, 2009 / Know Your Client (KYC) Application Form, Uniform Risk Disclosure Documents, Rights & Obligations of Members, Authorized Persons and Clients, Do’s and Don’ts for the Clients, is obtained from all clients before accepting or placing orders on their behalf. Tariff Sheet and Information on contact details of Senior Officials is issued to all the clients
2. / NCDEX/ MEMBERSHIP-002/2009/355 dated December 18, 2009, NCDEX/MEMBERSHIP-002/2010/224 dated August 31, 2010 / Not accepted orders in Inactive Client’s accounts without an undertaking from them in prescribed format to re-open those accounts and in case there are material changes in the client details the required formalities of fresh KYC is done
Trades are executed in the same client code i.e. the client code issued earlier to the concerned client
3. / NCDEX/MEMBERSHIP-005/2007/099 dated April 20, 2007 NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / PAN details is obtained from all active clients and uploaded to the Exchange
4. / NCDEX/LEGAL-05/2009/ 199 dated July 14, 2009 NCDEX/COMPLIANCE-009/2011/309 dated October 07, 2011 / Pre-funded instruments (Pay Orders and Demand Drafts) / Electronic Fund Transfer
5. / Regulation 7.1, NCDEX/CSG-008/2008/ 236 dated October 17, 2008, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 NCDEX/CSG-002/2011/ 068 dated March 11, 2011
NCDEX/TRADING-101/2011/277 dated September 08, 2011NCDEX/COMPLIANCE-010/2011/313 dated October 11, 2011 / Unique client codes have been allotted to all clients and Mapping of the client codes used at the time of order entry in the trading system with unique client code is maintained
6. / NCDEX/COMPLIANCE-007/2012/093, dated March 19, 2012, NCDEX/COMPLIANCE-010/2012/426, dated December 28, 2012, NCDEX/COMPLIANCE-001/2013/036, dated February 11, 2013, NCDEX/COMPLIANCE-002/2013/067 dated March 08, 2013 / Not placed orders of the clients whose mobile numbers and / or E-mail id is not uploaded in the UCC database of the Exchange w.e.f. March 01, 2013
7. / NCDEX/CSG-001/2009/063 dated February 27, 2009 / No orders have been placed for deleted client codes
8. / Regulation 6.4, NCDEX/COMPLIANCE-004/ 2009/269 dated October 01, 2009 / Evidence of client placing order (in physical form and / or in the form of Voice Recording System)
9. / NCDEX/COMPLIANCE-004/ 2009/269 dated October 01, 2009 / All trades of clients are executed only after completing KYC formalities
3. Margin Requirements
1. / Regulation 5.7, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010
NCDEX/RISK-017/2011/ 184 dated June 16, 2011 NCDEX/COMPLIANCE-011/2011/315 dated October 13, 2011
NCDEX/COMPLIANCE-001/2012/001 dated January 02, 2012 / Upfront initial margins are collected from clients before entertaining any order from them
2. / Regulation 5.1 / Margins are collected from the director or an employee of the Member
3. / Regulation 5.7 / MTM settlement is collected from the constituents as prescribed
4. Contract Notes
1. / Regulation 5.5, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010,
NCDEX/COMPLIANCE-003/2011/126 dated April 29, 2011, NCDEX/COMPLIANCE-011/2011/315 dated October 13, 2011, NCDEX/LEGAL-006/2012/379 dated November 2, 2012 / Issued Contract Notes in prescribed format to all the clients
2. / Regulation 5.5 / Contract notes should bear signature of authorized signatory and running serial
number which is initiated at the
beginning of each financial year
3. / NCDEX/COMPLIANCE-003/2011/126 dated April 29, 2011 / Issued / dispatched contracts notes within 24 hours of the execution of trades
4. / NCDEX/COMPLIANCE-004/2009/269 dated October 01, 2009, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Maintained evidence of dispatching Contract Notes
5. / Regulation 7.1,
NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Maintained duplicate Copy of Contract Notes
6. / NCDEX/Legal-005/2004/ 091 dated July 22, 2004 / Complied with requirements related to issue of Digital Contract Notes
7. / NCDEX/ COMPLIANCE-003/2011/126 dated April 29, 2011, NCDEX/LEGAL-001/2012/002 dated January 03, 2012 / Electronic Contract Note ‘ECN Declaration Form’ has been obtained from client specifically indicating his preference for receipt of Contract Notes in electronic form
8. / NCDEX/ COMPLIANCE-003/2011/126 dated April 29, 2011 / Whether ECN declaration has been obtained from the clients afresh before April 01, 2012. (In case of the clients who have provided the ECN Declaration Form in the year 2011-2012)
9. / Regulation 5.6,
NCDEX/LEGAL-006/2012/379 dated November 2, 2012 / Brokerage has been charged separately and indicated separately from the price, in the contract note
5. Handling of Funds and Commodities
1. / Regulation 7.1 / Maintaining Separate Client and Own Bank accounts
2. / Regulation 6.4, Regulation 7.1, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Segregation of Client’s and Own Funds
3. / NCDEX/COMPLIANCE-
011/2011/315 dated October 13, 2011 / Segregation of client accounts in Commodity Futures Exchange and National Commodity Spot Exchanges
4. / Regulation 6.6, Regulations 5.1, NCDEX/LEGAL-010/2009/295 dated October 23, 2009, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Not mis-utilized Clients’ Funds/Commodities
5. / NCDEX/COMPLIANCE-005/2009/271 dated October 5, 2009 / Not involved in cash transactions with clients
6. / Regulation 6.4, Regulation 7.1 NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Full payment of funds and commodities has been made to all constituents within 24 hours of receiving the relevant pay out
7. / NCDEX/COMPLIANCE-004/2009/269 dated October 01, 2009 / Maintained evidence of making payments to clients for Mark to Market gains
8. / Regulation 7.1,
NCDEX/COMPLIANCE-003/2011/126 dated April 29, 2011 / A detailed statement of accounts is sent every month to all the clients in physical form & the proof of delivery of the same has been preserved
9. / NCDEX/COMPLIANCE-005/2012/050 dated February 14, 2012 / Quarterly Settlement of account of client
10. / Regulation 5.1, Regulation 6.4, Regulation 6.6 / Separate client beneficiary account is maintained to hold commodities of client and operated as per provisions of Regulation
11. / Regulation 7.1 / No transfer / withdrawal from clients’ account is made except under the circumstances enumerated in Regulations
6. Trading and Office Management
1. / Regulation 4.2, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Use of Trading Terminals by Approved Users only
2. / Regulation 4.1,
NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / TWS/CTCL terminals have not been extended /installed without the approval of the Exchange
3. / NCDEX/TECHNOLOGY-015/2010/310 dated December 09, 2010, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Details of all CTCL Terminals submitted to Exchange
4. / Regulation 4.2 / Former Member or a user of such Member is not a user without the approval of the Exchange
5. / Regulation 4.1,
Bye Law 6.7, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Member acting for another Member without the prior approval of the Exchange
6. / NCDEX/TECHNOLOGY-002/2011/052 dated February 25, 2011, NCDEX/TRADING-004/2013/014 dated January 11, 2013, NCDEX/TRADING-027/2013/084 dated March 18, 2013 / The Guidelines on Algorithmic Trading/High Frequency Trade (HFT) have been complied with
7. / NCDEX/TRADING-139/2011/374 dated December 27, 2011, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Trades executed for own account have not been subsequently transferred to a constituent and vice versa
7. Membership Requirements
1. / Membership Undertaking NCDEX/MEMBERSHIP-001/2010/217 dated August 23, 2010, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010, NCDEX/MEMBERSHIP-002/2012/143 dated April 16, 2012 / No change in shareholding / profit sharing pattern/ Dominant Promoter Group or their shareholding interest has been undertaken without approval of the Exchange
2. / NCDEX/MEMBERSHIP-008/ 2007/184 dated July 27, 2007,
NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010, NCDEX/MEMBERSHIP-001/2011/051 dated February 24, 2011, NCDEX/COMPLIANCE-011/2011/315 dated October 13, 2011 / Maintained Net worth as per Exchange requirement
3. / NCDEX/MEMBERSHIP-004/2011/259 dated August 19, 2011 / Appointed Compliance Officer appointment and changes intimated to the Exchange
4. / NCDEX/MEMBERSHIP-003/2011/226 dated July 25, 2011 / At-least two users are NICR/NCFM certified
8. Others
1. / Rule 6.5.8, NCDEX/LEGAL-03/2005/ 046 dated February 24, 2005, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / No advertisements have been released for business purposes contrary to the Guidelines
2. / Rule 6.5 / No business has been done with or for the Members who are prohibited to transact, including suspended/expelled/ defaulter Members; defaulting constituents and employees of other Member
3. / NCDEX/COMPLIANCE-004/ 2009/269 dated October 01, 2009, NCDEX/COMPLIANCE-007/2010/195 dated July 22, 2010 / Not indulged in Portfolio Management Services (PMS)
4. / NCDEX/COMPLIANCE-006/ 2009/334 dated November 25, 2009, NCDEX/COMPLIANCE-009/2010/233 dated September 07, 2010 / Guidelines for Anti Money Laundering and Know Your Customer (KYC) Norms are complied with
5. / NCDEX/COMPLIANCE-008/2010/223 dated August 28, 2010, NCDEX/COMPLIANCE-001/2011/053 dated February 25, 2011, NCDEX/COMPLIANCE-006/2012/052 dated February 14, 2012 / Complied with the requirements related to dealings through Authorized Persons
6. / NCDEX/COMPLIANCE-008/2010/223 dated August 28, 2010, NCDEX/COMPLIANCE-006/2012/052 dated February 14, 2012 / Periodic Inspection/ Audit of Authorized Person/s has been carried out
7. / NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / No Offices / Branches or User ID’s / Trade Work Stations (TWS) or Trading Terminal are being used for doing unauthorized / illegal trading / fictitious transactions or any trade outside the purview of the Exchange
8. / NCDEX/COMPLIANCE/002/2006/238 dated September 19, 2006, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / The prescribed details on notice board are prominently displayed at the Member’s main/ branch office as also at the offices of the Authorized Persons
9. / NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Non-payment of statutory dues/duties/fees etc.
10. / NCDEX/MEMBERSHIP-007/ 2005/263 dated November 24, 2005, NCDEX/MEMBERSHIP-009/ 2008/264 dated November 21, 2008 / Obtained valid Members' Fidelity Insurance cover
11. / NCDEX/COMPLIANCE-002/2011/118 dated April 26, 2011 / BPO/KPO Services are segregated from Commodity Derivatives Market
12. / Bye Law 8.7.2 / Brokerage has not been shared with another Member of the Exchange or an employee of another Member or a person with whom Members are forbidden to do business under the Rules, Bye Laws and Regulations of the Exchange
13. / Brokerage has not been shared
with and/or business has not
been transacted with any of the suspended or expelled or
defaulting Members
14. / Brokerage has been shared only with Authorised Persons
9. Clearing & Settlement Operations – Applicable only for STCMs
1. / NCDEX/ MEMBERSHIP-008/2008/262 dated November 17, 2008,
NCDEX/ MEMBERSHIP-001/2011/051 dated February 24, 2011, NCDEX/COMPLIANCE-001/2010/089 dated April 01, 2010 / Initial / Exposure margins and MTMs are collected correctly from the affiliated TMs/TCMs
2. / NCDEX/ MEMBERSHIP-008/2008/262 dated November 17, 2008 / Money of affiliated TMs/TCMs has always been kept in separate bank A/c
.