Risk Management & Surveillance Policy
Preface: Risk Management is an integral part of any organization. We need to deal with various kind of risk like Credit Risk, Market Risk, Default Risk, Liquidity Risk and other Risk. The following document describes the risk management policy followed by Vikson.
Adjusted Ledger Balance: This is the clear balance available in the customer’s ledger account in our books. For example, proceeds of shares sold but not delivered will be reversed if credited in the ledger and debited Var Margin will be ignored.
Securities in Margin: In case of F&O and currency derivative segment, company is required to collect margin from respective constituents on an upfront basis. It is to be ensured that the adequate margin amount from respective client is available with the company, on the day the relevant trades are done.
It is mandatory for all trading / clearing members to report details of such margins collected on an upfront basis to the clearing corporation.
Company may collect margins from its respective client in any of the following forms only, after taking into account their risk management system and liquidity aspects.
- Bank guarantee issued by any approved bank.
- Fixed deposit receipts (FDRs) issued by any approved bank.
- Liquid securities in dematerialized form, actively traded on the National Exchanges, which are specifically not declared as illiquid securities. (List of illiquid securities are declared on a regular basis by the Exchanges) with appropriate hair cut as the case may be.
- Units of liquid mutual funds in dematerialized form, whose NAVs are available and which could be liquidated readily with appropriate hair cut as the case may be.
- Government securities and Treasury bills in electronic form with appropriate hair cut as the case may be.
- Any other such collaterals, as may be specified by Clearing Corporations from time to time.
Exposure: Exposure of Client means a client’s obligation arising out of (i) Buy and Sale entered into on behalf of the client in cash segment which are yet to be settled and (ii) open positioning F O segment.
Total Deposit: The aggregate of client deposit available with us in the form of cash, shares (after applicable hair cut) and FDR.
Margin: Derivative Segment is Margin driven segment. Margin will be collected under normal/panic conditions as per the requirement of the Exchange. i.e. SPAN + Exposure Margin + Additional Margin (if any made applicable by the Exchange).
Short Margin Penalty: Short Margin Penalty has to bear by client.
Delayed Payment Charges: DPC charges 21% PA would be charged on T+4 basis.
Position square off: If the client not paying his margin & MTM obligation till T+2 days in F&O segment Vikson Securities Private Limited will reduce or square off his/her position after intimation on Email or Telephone.
Nature Of Customer Transactions
Intraday Cash Segment: The amount 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 exactly the same quantity, thereby nullifying the original position.
Delivery Trades: This is net Purchase or Sale of a particular scrip in client’s account which is settled by Delivery on T+2 Days. 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. By not doing so, the client faces the risk of entering in auction.
Sell against Buy before delivery: 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: In this case Vikson will not be responsible for any short pay out of security received from Exchange resulting in short delivery in client’s account.
Cash Segment: We provide an exposure limit to a client which would be a multiple of the clear ledger balance in the account of the client. The value of the “multiple” will be decided by the company based on market conditions. Normally we provide limit up to 10 times in intraday and 3 times in delivery of Available Margin after Haircut if any, which may vary depending upon long term relationship with clients, payment history and volatility in market. In this system total deposit of client is uploaded in system. In case of BSE B GROUP, T2T ,XC, XD, XT , MT, P and Z category stock we provide limit only on Available cash credit with us and no leverage is provided in BSE B GROUP ,T2T ,XC, XD, XT , MT, P and Z category Shares. Clients can place orders in two products:-
- MIS/CO (Margin Intraday / Cover Order)
- NRML (DELIVERY TRADES)
- CNC (CASH AND CARRY)
If a client wishes to use margin, he/she can place orders with the MIS/CO product code. Once the trade has been filled, only a portion of the full applicable margin will be blocked as per margin requirements for the stock. Vikson will square off all open positions under the MIS/CO at 3.20 PM. If a client wishes to hold a stock overnight or doesn’t want VIKSON to square off, he/she can place orders using the NRML product code. The amount of margin is applicable at the time of order and VIKSON won’t square the position off.Client can Sell his/her holdings in CNC product and carry position according to ledger balance.
F & O Segment: Typically as per exchange rules, margin can be accepted in cash and shares equally. Only liquid stocks (as acceptable to exchange in F&O Segment) are accepted. F&O Margin which will be accepted after a haircut is applicable as per Exchange. Clients can place orders in two products in the F&O segment:-
- MIS/CO (Margin Intraday / Cover Order)
- NRML (Normal)
If a client wishes to use margin, he/she can place orders with the MIS/CO product code. Under MIS/CO, the client will be required to pay margin as required by Vikson. In futures both buying and selling would be allowed whereas in options only short selling will be allowed in MIS/CO product code on futures. Once the trade has been filled, only a portion of the full applicable margin will be blocked as per margin requirements for the stock till the position is held. Vikson will square off all open positions under the MIS/CO at 3:25 PM. If a client wishes to hold his F&O positions futures products overnight he/she needs to place the order under the NRML product code. This will require 100% of the applicable span and exposure margin. In case of Options buying only NRML product code will be allowed and orders placed in MIS/CO will be rejected since they are blocked. For buying options, the full premium margin amount is required. For selling options, the applicable span and exposure margin is required as per the relevant product code.