Whereas the MEMBER is registered as TRADING MEMBER of the Multi Commodity Exchange of India Ltd. (TM ID: 35260) Whereas the CLIENT is desirous of investing / trading in those commodities admitted for dealing on the Exchange as defined in the Bye-Laws of the Exchange.
Whereas the CLIENT has satisfied himself of the capability of the MEMBER to deal in commodities and wishes to execute his orders through him and the CLIENT shall continue to satisfy himself of such capability of the MEMBERS before executing orders through him.
Whereas the MEMBER has satisfied and shall continuously satisfy himself about the genuineness and financial soundness of the CLIENT and investment objectives relevant to the services to be provided.
Whereas the MEMBER has taken steps and shall take steps to make the CLIENT aware of the precise nature of the MEMBER’S liability for business to be conducted, including the limitations on that liability and the capacity in which it acts. In considerations of the mutual understanding as set forth in this agreement, the parties there to have agreed to the following terms and conditions.
1. MEMBER reserves the right of refusing to execute any particular transaction, and it shall be at the discretion of MEMBER to amend or charge from time as Member deems fit any of the terms and conditions recorded in this agreement
2. MEMBER shall Charge Brokerage as per the terms decided from time to time.
3. MEMBER has the right to call for advance for the amount which MEMBER deems fit, falling which MEMBER may square off the transaction at the clients cost. The client will have to
make payment when the MEMBER raises the Bill/Estimated Bill or on demand whichever is earlier while the delivery of commodities would be handed over to the client after the pay-out by
the exchange subject to the receipt of clear funds from client.
4. The client shall give the delivery Instruction along with duly signed transfer slip (of respective DP) to Member within 24 hours
from the allocation of delivery by the Exchange , falling which MEMBER may Charge penalty as charged by the exchange.
5. MEMBER shall not be liable for any loss which may arise if it is prevented from discharging its obligations due to any causes arising out of or related to any Act of God or Act of State, or any such unforeseen circumstances outside the control of the MEMBER.
6. The MEMBER reserves the right to withhold the payment of the client arising out of dues from the company for meeting contingent liabilities arising out of his previous trades.
7. The client shall be responsible and liable to settle all the claims arising out of his trades.
8. The provision of the agreement shall always be subject to Government notifications, any rules, regulations and guidelines issued by FMC and Commodity Exchange rules, regulations and bye-laws and term and conditions of Samdhyan Commodities Brokers Pvt. Ltd. that may be in force from time to time.
9. In the event of death or insolvency of the CLIENT or his otherwise becoming incapable of receiving and paying for or delivering or transferring commodities which the CLIENT has
ordered to be brought or sold, MEMBER may close out the transaction of the CLIENT and the CLIENT or his legal representative shall be liable for any losses, costs and be entitled to my surplus which result there from.
10. The agreement entered into between the MEMBER and the CLIENT shall stand terminated by mutual consent of the parties by giving at least one month written notice. Such cancellation or termination shall not have any effect in transaction executed before the data of such notice of termination and the parties shall enjoy the same rights and shall have same obligation in respect of such transaction.
11. The instructions issued by an authorized representative of the CLIENT shall be binding on the CLIENT in accordance with the letter authorizing the said representative to deal on behalf of the CLIENT.
12. The Exchange may cancel a trade suo-moto without giving any reason thereof. In the event of such cancellation, MEMBER shall be entitled to cancel relative contract(s) with CLIENT.
13. All the trades, transactions and contracts are subject to the Rules and Regulations of the Exchange and shall be deemed to be and shall take effect as wholly made, entered into and to be performed in the city of _________ and the parties to such trade shall be deemed to have submitted to the jurisdiction of the courts in _________ for the purpose of giving effect to the provisions of the Rules and Regulations of the Exchange.
14. The MEMBER hereby undertakes to maintain the details of the CLIENT as mentioned in the CLIENT registration from or any other information pertaining to the CLIENT, in confidence and that he shall not disclose the same to any person/ entity except as required under the law. Provided however, that the broker shall be allowed to share the details of the CLIENT as mentioned in the CLIENT registration from or any other information pertain to the CLIENT with parties/ entitles other than required under the law with the express permission of the CLIENT.
This agreement is made at Ahmedabad this _______________________by and between Samdhyan Commodities Brokers Pvt. Ltd. having his registered office at 301, Aasthan complex, Above Vijaya Bank, Ambwadi, Ahmedabad- 380015 (hereinafter called “MEMBER”), and ____________________________________________________________________ company / trust / firm / individual or any other body duly formed and registered under the _________Act, having it’s registered office address / resident at ________________________________________________________________________ ________________________________________________________________________ (hereinafter called “CONSTITUENTS).
WITNESSTH :
Whereas the member is registered as TRADING AND CLEARING MEMBER (Member) of MULTI COMMODITY EXCHANGE OF INDIA LTD. (hereinafter called MCX or the Exchange) Whereas the CONSTITUENT is desirous of investing/trading in those contracts admitted for dealing on NCDEX as defined in the Bye-Laws of MCX.
Whereas the CONSTITUENT has satisfied itself of the capability of the MEMBER to deal in those contracts admitted for dealing on MCX and wishes to execute his order through him and the constituent shall continue to satisfy himself of such capability of MEMBER before executing any orders through him.
Whereas the MEMBER has satisfied and shall continuously satisfy himself about the genuineness and financial soundness of the CONSTITUENT and objectives relevant to the services to be provided.
Whereas the MEMBER has taken steps and shall take steps to make the CONSTITUENT aware of the precise nature of the MEMBER’s liability for business to be conducted, including any limitations on the liability and the capacity in which its acts.
In consideration of the Member agreeing to handle the transactions of MCX on my/our behalf, I/We the Constituent hereby agree that:-
1. We have read the Risk Disclosure Document appended hereto and understand the trading & risk involved in the trading of these instruments and are fully responsible for our dealing in these instruments.
2. We shall be bound by the constitutions, bylaws, rules, regulations and customs of MCX.
3. We shall deposit with you monies or other property, which may be required to open and maintain our account.
4. We shall not, either acting alone or in concert with others, directly or indirectly, hold and control excess number of permitted contracts as fixed from time to time by the Exchange.
5. We shall not exercise a long or short position where, acting alone or in concert with others, directly or indirectly We have exercised in excess of limit of permitted contracts as may be fixed from time to time by the Exchange.
6. All monies, securities or other property, which you may hold on our account, shall be subject to a general lien for the discharge of our obligations to you under this agreement.
7. We hereby authorize you, should you deem it necessary for your protection to buy, sell or close out any part or all of the contracts held in our account with you. We will reimburse any or all such incidental expenses incurred by you.
Now, THEREFORE, in consideration of the mutual understanding as set forth in this agreement, the parties hereto have agreed to the terms and conditions as follows:
1. The agreement entered into between the Member and the Constituent shall stand terminated by mutual consent of the parties by giving at least one month notice to each other. Such termination shall not have any effect on the transaction executed till the date of termination and the parties shall enjoy same rights and shall have same obligation s in respect of such transactions.
2. In the event of death of insolvency of the Constituent or his otherwise becoming incapable of receiving any paying for or delivering or transferring commodities which the constituent has ordered to be bought or sold, the Member may with the approval of the Exchange, close out the transaction of the Constituent and the Constituent or his legal representative shall be liable for any losses, costs, damages including statutory/regulatory charges, if any and be entitled to any surplus which may result there from.
3. All trades, transactions and contracts are subject to the Rules, Bye-Laws and Regulations of the Exchange and shall be deemed to be and shall take effect as wholly made, entered into and to be performed for the purpose of giving effect to the provisions of the Rules, Bye-Laws and Regulations of the Exchange.
4. The Member hereby undertakes to maintain the details of the Constituent as mentioned in the Constituent registration form or any other information pertaining to the Constituent, in confidence and that he shall not disclose the same to any person/entity except as required by the Exchange or as required under the Law; Provided however that the Member shall be allowed to share the details of the Constituent as mentioned in the Constituent registration form or any other information pertaining to the Constituent with the parties /entities other than required under the Law with the express permission of the Constituent.
5. Provisions in case of Default : In the event of the default of a Member on his own account, the Constituent’s money shall not be utilized to meet the Member liabilities. In such case the Constituent’s positions shall be either transferred to another solvent member or closed out as per the provisions of the Rules, Bye-laws and Regulations of the Exchange. The loss, if any, caused to the Constituent because of such action would be recoverable by the Constituent from the Member. In the event of the failure of the Constituent to fulfill his obligations to the Member, the Exchange or the Clearing House, the Constituent’s position may be closed out and the money, if any, of the Constituent available with the Member or any other Member or the Exchange, may be adjusted against the Constituent’s liabilities/obligations. The Professional Clearing Member (PCM), if opted by the Constituent to settle his trades, shall confirm all trades executed as PCM trades on the day the order is executed. In the event of non-confirmation and/or rejection of the trade by such PCM, the Constituent shall be liable to pay forth with the applicable margin as enunciated by the Member on the same day.
6. Collateral : The Constituent shall pay to the Member such amount as an initial deposit (collateral / initial deposit) as decided by the Member, and in such form as may be approved by the Member up-front, on or before creating a position in any contract. The Member shall reserve the mark up margin (commonly referred to as ‘haircut margin’) from the collateral, which shall not be utilized for margin requirements. The collateral reduced by markup/haircut margin shall thereafter be utilized against creating and maintaining the position by the Constituent. The mark up margin shall be subject to the change from time to time as may be decided by the Member and/or Exchange.
7. Utilization by Member of the Initial Deposit by the Constituent : The Initial deposit so paid shall be first utilized towards initial margin requirement as calculated by Exchange from time to time and the balance if any, after such adjustment against initial margin payments, will be available for adjustment against daily margin requirement, Mark to Market (MTM) loss on open positions created by the Constituent. The Constituent shall forward in advance a written request to the Member for adjustment MTM loss against the cash portion of the collateral.
8. Payment of Margin : The daily margin requirement can be adjusted against the collateral maintained by the Constituent with the Member. The Member shall accept from the Constituent further order, which, if executed, will add to the open positions, only if the balance collateral is adequate to meet the initial margin on such new positions. If the balance collateral is not adequate for adjusting the daily margin requirement, the Constituent shall deposit the additional margins as required by the Member. The Constituent shall also be obliged to pay the shortfall of the daily margin, if any, on the immediate succeeding business day when the Member raises such additional margin requirement. The Constituent shall not be permitted to create any new open positions, until receipt of such additional margin. If the Constituent defaults in paying the daily margin, the Member shall be entitled to liquidate/close out all or any of the Constituent’s positions, without prejudice to the Member’s rights to refer the matter to arbitration. Any or all losses and financial charges on account of such liquidation/closing out shall be charged to and borne by the Constituent. The Member is permitted in its sole and absolute discretion to impose additional margin (even though not imposed by the Exchanges, the Clearing Corporation / Clearing House) and the Constituent shall be obliged to fulfill such additional margin requirements.
9. Receipt and Payment of Premium MTM : The Member will block up-front from the collateral maintained with the MTM loss on open positions. The Member shall accept from the Constituent further order, which, if executed, will add to the open positions, only if the balance collateral is sufficient to meet the requisite margin on such new positions. The Constituent shall be obliged to pay the amount of MTM loss blocked against the collateral on the immediate succeeding business day. The Member will adjust the Constituent’s liability towards MTM loss against the initial deposit maintained in cash by the Constituent, provided a written request is given by the Constituent to the Member to this effect. If the Constituent defaults in paying the MTM loss, the Member shall be entitled to liquidate/close out all or any of the Constituent’s positions without prejudice to the Member’s right to refer the matter of arbitration. Any or all losses and financial charges on account of such liquidation/closing out shall be charged to and borne by the Constituent. On a written request from the Constituent, MTM profit (on derivative positions) shall be adjusted towards the collateral maintained with the Member. These adjustment pertaining to the MTM Profit shall be treated as additional collateral bought in by the Constituent and the Member shall reserve the mark up margin from this collateral, which shall not be utilized for margin requirements. The total collateral (inclusive of mark to market inflows) reduced by markup shall thereafter be utilized against creating and maintaining the position by the Constituent.
10. If the complete recovery not possible then, the Member shall be entitled to liquidate/close out all or any of the Constituent’s other outstanding positions, without prejudice to the Member’s right to recover the damage from the Constituent. Any or all losses and financial charges on account of such liquidation/closing out shalle be charged to and borne by the Constitue.
11. The Constituent acknowledges that all contracts culminating in delivery (which are not squared off and information for giving and taking the delivery is given by the Constituent) would be transaction for purchase and sales between the Constituent inter-se and the Constituent would be personally liable to each other through the contract and relationship are governed and regulated by the Bye Laws, Rules and Regulations of the Exchange.
12. The Exchange may cancel a trade suo-moto without giving any reason thereof. In the event of such cancellation, MEMBER shall be entitled to cancel relative contract(s) with CONSTITUENT.
13. All trades, transactions and contracts are subject to the Rules and Regulations of the Exchange and shall be deemed to be and shall take effect as wholly made, entered into and to be performed in the city of Mumbai and the parties to such trade shall be deemed to have submitted to the jurisdiction of the Courts in Mumbai for the purpose of giving effect to the provisions of the Rules and Regulations of the Exchange.
Constituent shall co-ordinate with the Member to ensures that all requirements for giving/taking delivery are fulfilled. Constituent shall also ensure to comply with all statutory requirements laid down regarding Sale/ Purchase of goods including payment of taxes, local levies and other statutory / regulatory charges as prescribed under applicable laws from time to time.
Constituent shall submit documents such as Invoices, Sales Tax Exemptions or concession form or any other documents as required under the prevalent laws and forward the same to the Counter-party Constituent or any other Member of the Exchange within stipulated period as specified by the Exchange from time to time. Constituent shall be liable to pay sales tax under the Local State Sales Tax Law or the Central Sales Tax Act, 1956, as the case may be and will be solely responsible for complying with all the provisions and regulations of the applicable saletax of the Laws.
In WITNESS THEREOF, the parties to agreement have caused these presents to be executed as of the day and year first written above.
1.1 You should familiarize yourself with the protections accorded to the money or other property you deposit particularly in the event of a firm insolvency or bankruptcy.
1.1.1 Please insure that you have a documentary proof of your having made deposit of such money or property with the trading member, starting towards which account such money or property deposited.
1.1.2 Further, it may be noted that the extent to which you may recover such money or property may be governed by the Bye-Laws and Regulations of Exchange and the scheme of the Investors’ Protection Fund in force time to time.
1.1.3 Any dispute with the trading member with respect to deposits, margin money, etc., and producing an appropriate proof thereof, shall be subject to arbitration as per the Rules, Bye-Laws/Regulations of Exchange or its Clearing Corporation.
1.2 Before you begin to trade, you should obtain a clear idea from your trading member of all brokerage, commissions, fees and other charges which will be levied on you for trading. These charges will affect your net cash inflow or outflow.
1.3 You should exercise due diligence and comply with the following requirements of the Exchange and/or FMC:
1.3.1 Please deal only with and through registered trading members who are members of the Commodity Exchange and are enabled to trade on the Exchange. All registered trading members are given a registration no., which may be verified from Exchange.
1.3.2 Demand any such information, details and documents from the trading member, for the purpose of verification, as you may find it necessary to satisfy yourself about his credentials
1.3.3 Furnish all such details in full as are required by the trading members as required in “Know your client” form, which may be also included details of PAN or Passport or Driving License or Voters Id, or Ration Card, bank accounts and depository accounts, as is available with the investor.
1.3.4 Execute a broker-client agreement in the form prescribed by Exchage/FMC and/or the Relevant Authority of Exchagne or its Clearing Corporation from time to time, because this may be useful as a proof of your dealing arrangements with the trading member.
1.3.5 Give any order for buy or sell of a commodity / security in writing or in such form or manner, as may be mutually agreed. Giving instructions in writing ensures that you have proof of your intent, in case of disputes with the trading member.
1.3.6 Ensure that a contract note is issued to you by the trading member which contains minute records of every transaction. Verify that the contract note contains details of order no., trade number, trade time, trade price, trade quantity, name of commodity/security, client code allotted to you and showing the brokerage separately. Contact notes are required to be given by the trading member to the investors latest on the next working day of the trade. Contract note can be issued by the trading member either in electronic forms using digital signature as required or in hard copy. In case you do not receive a contract note the next working day or at a mutually agreed time, please get in touch with the investors Grievance Cell of Exchange
1.3.7 Ensure the payment/delivery of commodities/securities against settlement is given to the concerned trading member within one working day prior to the date of pay-in announced by Exchange or it’s Clearing Corporation. Payments should be made only by account payee cheque in favour of the firm/company of the trading member and a receipt of acknowledgment towards what such payment is made be obtained from the trading member. Delivery of commodities/securities is made to the pool account of the trading member rather than to the beneficiary account of the trading member.
1.3.8 In case pay-out of money and/or securities is not received on the next working day after date of payout announced by Exchange or its Clearing Corporation, please followup with the concerned trading member for its release. In case pay-out is not released as above from the trading member within five working days, ensure that you lodge a complaint with the investors’ Grievance Cell of Exchange
1.3.9 Every trading Member is required to send a complete ‘Statement of Account’, for both funds and commodities/securities settlement to each of its constituents, at such periodicity as may be prescribed by the Exchange from time to time. You should report errors, if any, in the Statement immediately, but not later than 30 calendar days of receipt thereof, to the trading Member. In case the error is not rectified or there is a dispute, ensure that you refer such matter to the Investors Grievance Cell of Exchange
1.3.10 In case of a complaint against a trading member, you should address the complaint to the Office as may be specified by Exchange from time to time.
1.4 In case where a trading member surrenders his trading membership, Exchange gives a public notice investing claims, if any, from investors. In case of a claim, relating to “transaction executed on the trading system” of Exchange, ensure you that you lodge a claim with Excahange/NSCCL within the stipulated period and with the supporting documents.
1.5 In case where a trading member is expelled from trading membership or declared a defaulter, Exchange gives a public notice inviting claims, if any, from investors. In case of a claim, relating to “transaction executed on the trading system” of Exchange, ensure you that you lodge a claim with Exchange within the stipulated period and with the supporting documents.
1. The term ‘constituent’ shall mean and include a client, a customer or an investor, who deals with a trading member of Exchange for the purpose of acquiring and / or selling of commodities / securities through the mechanism provided by Exchange.
2. The term ‘trading member’ shall mean a member or a broker, who has been admitted as such by Exchange and who holds a registration certificate.
( THIS DOCUMENT SHOULD BE READ BY EACH AND EVERY PROSPECTIVE CONSTITUENT BEFORE ENTERING INTO DERIVATIVES TRADING AND SHOULD BE READ IN CONJUCTION WITH REGULATIONS OF MULTI COMMODITY EXCHANGE OF INDIA LTD. (MCX) NCDEX/MCX/ESUGAR has not passed the merits of participating in this trading segment nor has the NCDEX/MCX/ESUGAR passed the adequacy or accuracy of this disclosure document. This brief statement does not disclose all of the risks and other significant aspects of trading. In light of the risks, you should undertake such transactions only if you understand the nature of the contracts (and contractual relationship) into which you are entering and the extent of your exposure risk. Risk of loss in trading in derivatives can be substantial. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. Derivative trading thus require not only the necessary financial resources but also the financial and emotional temperament. In case of any consequences or loss in the Futures segment, the Constituent shall be solely responsible for such loss and the Exchange shall not be responsible for the same and it will not be open for any client to take the plea that no adequate disclosure was made or he was not explained the full risk involved be the member. The client will be solely responsible for the consequences and no contract can be rescinded on that account.
Effect of “Leverage” or “Gearing” The amount of margin is small relative to the value of the derivatives contract so the transactions are “leveraged” or “geared”. Derivatives trading, which is conducted with a relatively small amount of margin, provides the possibility of great profit or loss in comparison with the principal investment amount. But transaction in derivatives carry a high degree of risk. You should therefore completely understand the following statements before actually trading in derivatives and also trade with caution while taking into account one’s circumstances, financial resources, etc. If the prices moves against you, you may lose a part of or whole margin equivalent to the principal investment amount in relatively short period of time. Moreover, the loss may exceed the original margin amount. 1. Futures trading involves daily settlement of all positions. Every day the open positions are marked to market based on Settlement price. If the settlement price has moved against you, you will be required to deposit the amount of loss (notional) resulting from such movement. This margin will have to be paid within a stipulated time frame, generally before commencement of trading next day. 2. If you fail to deposit the additional margin by the deadline or if an outstanding debt occur in your account, the broker/member may liquidate a part of or the whole poison. In this case, you will be liable for any losses incurred due to such closeout. 3. Under certain market conditions, an investor may find it difficult or impossible to execute transactions. For example, this situation can occur due to factors such as liquidity i.e. when there are insufficient bids or offers or suspension of trading due to price limit or circuit breakers etc. 4. In order to maintain market stability, the followings steps may be adopted : changes in the margin rate, increase in cash margin rate or others. These new measure may be applied to the existing open interests. In such conditions, you will be required to put up additional margins or reduce your positions. 5. You must ask your broker to provide the full details of the derivatives contracts you plan to trade i.e. the contract specifications and the associated obligations. Risk – reducing orders or strategies : The placing of certain orders (e.g. “stop-loss” orders, or “stop-limit” orders), which are intended to limit losses to certain amounts, may not be effective because market conditions may make it impossible to execute such orders. Strategies using combinations of positions, such as “spread” positions may be as risky as taking simple “long” or “short” positions. Suspension or restriction of trading and pricing relationships Market conditions (e.g., illiquidity) and or the operation of the rules of certain markets (e.g. the suspension of trading in any contract or contract month because of price limit of “circuit breakers”) may increase the risk of loss due to inability to liquidate / offset positions. Deposited cash and property You should familiarize yourself with the protection accorded to the money or other property you deposit particularly in the event of a firm insolvency or bankruptcy. The extent to which you may recover your money or property may be governed by the legislation or local rules. In some Jurisdictions, property that has been specifically identifiable as your own will be pro-rated in the same manner as cash for the purpose of distribution in the event of a shortfall. In case of any dispute with the member, the same shall be subject to arbitration as per the Bye Laws, Regulations of the Exchange. Commission and other charges Before you began to trade, you should obtain a clear explanation of all commission, fees and other charges for which you will be liable. These charges will effect your net profit (if any) or increase your loss. Trading facilities The Exchange offers electronic trading facilities, which are computer based system for order routing, execution, matching, registration or clearing of trades. As with all facilities and system, they are vulnerable to temporary disruption or failure. Your ability to recover certain losses may be subject to limits on liability imposed by the system provider, the market, the clearing house and/or member firms. Such limits may vary; you should ask the firm with which you deal for details in this respect. This document does not disclose all of the risks and other significant aspects involved in trading on a derivatives market. The Constituent should therefore study derivatives trading carefully before becoming involve in it. I hereby acknowledge that I have received and understood this risk disclosure statement.