Nbfc Write-Up

EMKAY FINCAP LTD.

MARGIN FUNDING WRITE-UP

 Margin funding facility shall be provided through EMKAY FINCAP LTD., which is a subsidiary company of Emkay Global Financial Services Ltd. Clients, who wish to avail the same, will have to fill up the client registration form and register themselves with Emkay Fincap Ltd. Client registration form contains details of the client, Loan cum Pledge agreement, Power of Attorney in favor of FINCAP for operations of client’s DP account.

 All clients will have to open a bank account operated through Power of Attorney (POA). Clients will have to open the bank account with Kotak Mahindra Bank or with HDFC Bank Ltd. Client will have to execute the POWER OF ATTORNEY in favor of FINCAP for operating this bank account. FINCAP will arrange to get the bank account opened with Kotak Mahindra Bank or HDFC Bank as the case may be.

 All clients will have to open a DMAT account operated through Power of Attorney (POA) with Emkay Global Financial Services Ltd. Client will have to execute the POWER OF ATTORNEY in favor of FINCAP for operating this DMAT account. All shares on which funding is done by FINCAP shall be routed through this DMAT account.

 Minimum amount of initial funding shall be not less than Rs.5 Lacs per client. Client will have to get their funding limits sanctioned from FINCAP. And for increasing the limits first they will have to obtain the sanction from the FINCAP management.

 Before starting any account client will have to make upfront payment of 30% margin money to Emkay Global or client’s new bank account. AND Shares will not be accepted towards such margin payments. i.e. if client want to buy shares of Rs.10 Lacs than he will have to give cheque of Rs.3.00 Lac as margin and the balance amount of Rs.7.00 Lacs will be funded by FINCAP.

 FINCAP shall fund only those shares, which are approved AND appearing in Emkay Fincap Approved list of funding. All other securities, which are not in the approved list of funding will not be funded by FINCAP and client will have to separately make the payment of such purchases. And it is also mandatory that such funding clients should always settle their debits in Emkay Global in time.

 If shares are purchased on T day and sold on T+1 day and if any shortage comes towards shares purchased from exchange than client will have to make good of the deficit and transactions shall be solely at the risk of the client AND all AUCTION debits / losses will be to the client’s account in such cases. Hence, it is always advisable that such transactions are avoided and sale is made only after confirming the receipt of the shares. We prefer that client should not do BUY TODAY SALE TOMORROW (BTST). The best way is to do the sale transaction on T+ 3 day only.

 Only delivery based buying will be funded by FINCAP. And no funding will be done for intra-day losses and client will have to pay towards the same separately.

 We prefer that that when client purchase any shares for margin funding, value of such shares should be more than Rs.25,000/- i.e. Rate X Qty should be more than Rs.25,000/-. This will reduce our back-office work of handling of Dividend, Right, Bonus and other corporate actions.

 Daily valuation of shares of client with FINCAP will be done and at any stage funding should not exceed 70% of the value of the shares available. In the event of fall in value of the shares lying with FINCAP, client will have to give the cheque to FINCAP towards shortfall immediately on margin call. And no securities shall be accepted towards the additional margin call. Further if margin call at any particular time remains outstanding and the valuation of the stock falls below 115% (i.e. if a outstanding loan is of Rs.10/- Lacs, shares value should not fall below Rs.11.50 Lacs ), then FINCAP has the right to sell the securities and make good the shortfall in the margin call and client will only be responsible for losses if any.

 If the client has shortfall of margin calls for n number of times then FINCAP has all the rights to close such type of accounts immediately.

 FINCAP account and DP account opening charges will be charged Rs.430/- in the first year (Rs.430/- for FINCAP towards franking and notary charges of form).

 Interest will be charged on daily reducing balance basis at the end of the month, and client will have to make the payment of such interest separately by way of cheque to FINCAP immediately AND the same will not be allowed to form part of the funding. And if the same is not settled than FINCAP will charge interest on this amount also and no further funding shall be allowed till the interest amount is settled.

 If there is any credit in Emkay Global than such amount will be paid to FINCAP in settlement of client’s dues towards FINCAP. And if the client does not want this adjustment to be made than he will have to separately instruct not to adjust. BUT if the shortfall or margin requirement is there in FINCAP than compulsorily adjustment will be made by FINCAP.

 FINCAP shall provide copy of the bank statement at the end of every quarter to all the clients.

 FINCAP will always have the right of selection and continuity of client to whom the margin funding should be provided.

 All corporate actions will be in account of the client.

 If at any point of time approved list of securities is modified by FINCAP then upon FINCAP’S intimation to the client, such securities has to be removed from margin funding by way of selling the same or making full payment to FINCAP.

 Margin Funding facility will only be for Resident Individuals, HUF’S, Partnership Firm’s and Corporate Only.

 Clients will not get any cheque-book, Netbanking passwords etc. Further clients cannot withdraw any amount from the POA bank account opened by FINCAP, they can only deposit the amount in this account.

 If the client wishes to opt out of the margin funding facility he has to give 7 days prior notice and will have to clear all the outstandings of FINCAP.

 If FINCAP wishes to stop margin funding to any of its client then it will also give 7 days notice to client.

 Portfolio of your client should have minimum four securities and value of any one security should not be more than 30% of the portfolio value i.e. if the o/standing position of client is of Rs.100 Lac, value of any one security should not be more than Rs.30.00 Lac.

 Rate of Interest minimum 18% p.a. payable monthly, daily reducing.

Proceedure to transfer the shares in Funding a/c by way of margin:-

As mentioned in earlier paragraph client needs to open the separate DP with Emkay Global for availing margin funding facility.

For giving shares by way of margin client has to transfer shares from his outside DP to his DP account opened for margin funding facility by executing off-market, inter-depository instruction. But, before doing the same client needs to get his outside DP account validated by giving proof in Emkay Global.