Policies and Procedures
Welcome to Vachana Investments private Limited. The domain name www.vachanainvestments.com (hereinafter referred to as “VACHANA”) is owned by Vachana Investments private Limited , a company incorporated under the Companies Act, 1956 having its registered office at #412, 4th Floor, 2nd Main Road,Near Dattatreya Temple, Malleswaram,Bangalore, Karnataka-560003. The trades of clients shall be carried out in the respective client code only. The dealers shall take utmost care while executing the trades of the clients regarding the accuracy of Client Code, Quantity and Price, etc. Product Types under which Orders are to be placed.
System of Payin and Payout of FUNDS:
Clients can transfer funds into the Trading Account only from such bank accounts which are registered with Vachana. Any transfer from a non-registered bank account will not be considered and the client does not get any trading limit credit for such transfers. Note: In case of non-registered bank transfer, we can map the bank details as secondary bank; Client has to provide signature on addition of bank form and personalized cancel cheque Or Bank Statement
- The client can transfer funds from the instant payment gateway facility available on the trading platform or on the backoffice. Such transfers will be charged at ₹9 + GST per transfer.
- Client can transfer the funds by using NEFT or by means of cheque, there will be no cost.
- We won’t accept the cash transactions.
- Withdrawing funds from your trading account is pretty simple. Please note Client can place Payout on the Backoffice access provided to him or he can also raise a withdrawal requests by sending email to RMS@vachanainvestments.com and we don’t take any requests on our support desk. All payout requests will be processed electronically and the credit shall come to the client’s primary bank account within 24 hours of having processed the payout request.
- Withdrawal requests will be processed at 3:30 PM on working days. If you place a withdrawal request before 3:30 PM, the money will be credited to your account the next bank working day. If you place a withdrawal request after 3:30 PM, it will be processed on the next working day and you will receive the funds in 48 hours.
- Note: Payout windows are closed on Saturday and Sunday – this means if you place a request on Saturday or Sunday or after 3:30 PM on Friday, it will be honored only on Monday.
- As a policy we say it will take 24 hours from when we process the withdrawal request, but please do understand that once processed the time taken is not really in our hands, it then depends on the time taken by NEFT/RTGS.
Vachana Provides consolidated Margin for Equity and FO Segment. Vachana does not engage in the business of Client Funding. Clients are required to have sufficient balance in their accounts to hold/carry forward positions. NSE Equity Margin: Vachana has a policy of giving up to 10 times leverage for stocks on which F&O trading is allowed. All margins are given only for trading Intraday. No margin is given for delivery trades. The client needs to have enough money in his trading account to take delivery failing which Vachana can cut the position. NSE Futures: 40% of Total Margin (Span + Exposure) is required to take intraday positions. Leverage provided here is subject to market conditions and changes in its proportion are dynamic. 100% of Total margin is required to carry forward positions.
|Margin Benefit for intraday trades (MIS)||Upto 10 times||40% of Exchange prescribed margin||Nil for buying. For Sell same as Futures|
|Intraday Margin Time (MIS)||9:15 to 15 min before market closes||9:15 to 15 min before market closes||9:15 to 15 min before market closes|
|Intraday products (MIS) square off timings||3:20 PM onwards||3:20 PM onwards||3:20 PM onwards|
*Note: Intraday square off timings can change based on the discretion of our risk management department.
A Call & Trade charge of ₹20 will be applicable for all positions squared off by our RMS desk, including auto square off.
- Intraday Margin leverage is provided subject to volatility & market conditions. In case of high volatility or adverse conditions the margins can be raised up to 100% Only FNO traded scrip’s can be placed in MIS.
- Clients are advised to maintain adequate funds in their Accounts & in case the funds available in their account are short of exchange specified margins – Any open positions can be squared off from our RMS Desk. During times of extreme volatility, there will be no margin call before the position is squared off. The loss could be more than the funds available in your account before the position is squared off. All resulting charges or debits from such square offs will have to be borne by the client.
- All Intraday positions will be subject to square off if your losses exceed 50% of the available funds in your account. During times of extreme volatility, there will be no margin call before the position is squared off.
- Option premium received from writing options will not be considered as Cash receipt.
- Fines levied by the exchange for shortage of margin will be payable by the client.(Any Margin Shortfall)
- Collateral margin will not be considered for equity delivery buying.
- Call & Trade charge of Rs.20 is applicable for all positions squared off at RMS desk.
- Market rate orders are not allowed for illiquid Options Contracts.
- All MIS positions will automatically be squared off at the end of the each trading day.
- Payments will only be accepted from the client’s registered bank account, cash and DD payins are not accepted.
- Because of illiquidity of stock option contracts, market orders have been disabled on stock options. Only limit orders are allowed. Place a limit buying order higher than the current price or selling order below the current price, this will act as good as market order but will also protect from any impact cost due to illiquidity. Instruments available for trading at Vachana are subject to the discretion of the risk management team, and these may change from time to time for various reasons.
- On the start of the delivery intention period, clients will not be informed before closing any open positions to avoid compulsory delivery notice. Clients are advised to close their positions well in advance.
- In case your account is in debit balance and/or if you have insufficient funds to manage your trading positions, you will be charged an interest of 24% p.a. as delayed payment charges.
- If any intraday position is not squared off on the same day due to any reason, it shall be treated as a Cash and Carry in case of Cash Segment or NRML position in case of F&O Segment and will be carried forward to the next trading day. In such cases, position will be squared off by the Client. If there is any margin shortfall in Client’s account, our RMS desk shall square off any such position without any margin call
If any intraday position or an MIS trade is not squared off on the same day due to any link or system failure or any risks associated with internet/wireless based trading which may occur at the end of the Client, Vachana or the respective Exchange, it shall be treated as a Cash and Carry (“CNC”) or NRML position and carried forward to the next trading day. In case of such a situation arising, the onus of squaring off the position will be on the Client. Our RMS desk shall square off any such position, without the requirement of a margin call, if the necessary cash is not available in the Client’s account.
All information mentioned here is subject to change at the discretion of our Risk management team.
We understand that not all our clients can bring in cash to trade and since securities are assets, we could give margin against such assets for our client to trade. Vachana gives margin to its clients for the exchange approved securities held by the client in their demat account.
- For all pledge requests placed before 3:45 PM, the collateral margin will be available to trade on T+1 day (next working day). All requests placed after 3:45 PM will be processed only on the next working day.
- Margins will be provided after the applicable haircut. A haircut of 12.5% would mean that if you pledged stocks worth Rs 1,00,000.00 Rs.87,500.00 will be added as collateral margin to your trading account.
- You can see this margin under the heading Collateral Update Qty on our trading platforms NEST.
- You will be able to use this entire margin after haircut for taking intraday or overnight positions in Futures, and for writing Options of equities and indices. You will not be able to use this margin to buy Options or take further positions on the equity segment.
- Exchanges prescribed Cash Collateral ratio is 50:50 that for overnight F&O positions, 50% of the margin needs to compulsorily come in cash and the remaining 50% can be in terms of collateral margin. So, if you take positions that require a margin of Rs 1 lakh, you will need at least Rs 50,000 in cash irrespective of how much collateral margin you have.
- Liquid bees are considered as cash equivalents by the exchange, so the above 50% rule wouldn’t apply. So margin received from pledging liquid bees will be as good as having cash in your trading account.
- All pledged stocks will be debited from your demat account until they are unpledged again. The entire process of pledging and unpledging will cost Rs 32 plus GST per scrip irrespective of the quantity. So if you pledge 100 shares of ITC and 200 shares of infosys, the total cost (pledging + unpledging) will be Rs 64 plus GST (Rs 32 x 2). This charge will be debited from your ledger the day you place the pledge request.
- You will continue to get benefits of all corporate actions like dividends, splits, bonuses, etc. on the stocks you have pledged
- This facility is available only for those clients who have opened a Trading and demat account through Vachana with POA.
- On Clients request through the back office login the shares will be moved from Client Demat account to Vachana Client collateral Account through an Off-Market transfer.
- Such Shares moved for margin can be viewed in the back office login as Pledged Shares
- All pledged stocks will be debited from your demat account until they are unpledged again.
Contract Notes and Margin Statement
Vachana will issue contract notes & margin statements to its clients within 24 hours of the trade day. Along with the Contract Note, the client shall also be furnished with a copy of the daily margin statement as prescribed by the Exchanges. Contract notes are also available in client Backoffice login.
The Compliance Officer shall be the designated officer for handling the Investors Grievances and Client Complaints. The email ID on which you can write in case you have any grievance is complaints@ vachanainvestments.com. The resolution of the Complaint shall be done at the earliest and the same shall be recorded in the register along with the date of resolution. Procedure to file a complaint on SEBI SCORES: Register on SCORES portal. Mandatory details for filing complaints on SCORES: Name, PAN, Address, Mobile Number, E-mail ID. Benefits: Effective Communication, Speedy redressal of the grievances
Account opening – ₹ 499 Annual Maintenance Charges for Demat (payable at the beginning of the year) – Rs 400 (Market rates are Rs 400 to Rs 1000) Annual Maintenance Charges for Trading Account – ZERO. DP Charges – 0.03% or Rs.9 whichever is higher plus ₹5.5 (CDSL) (applicable only when you are selling your Delivery position after having held for more than two days). (Market rates are usually between Rs 12 to Rs 25) STT, GST, NSE Turnover and Transaction Charges, SEBI charges are all as applicable market-wide GST will be levied additionally on all charges mentioned in this document as and wherever applicable.
INACTIVE ACCOUNT POLICY
Scope: To define procedures to ensure that no unauthorized trades are done in any INACTIVE client account. Background & Definition: Client Account would be treated as INACTIVE if there is no transaction (trade) in the account for 12 Calendar months from the last trade.
Checks & Balances: Clients trading in F&O segments have to update their financial status by providing one of the below listed documents:
- Copy of ITR Acknowledgement
- Copy of Annual Accounts
- In case of salary income – Salary Slip,
- Copy of Form 16 Net worth certificate
- Copy of demat account holding statement
- Bank account statement for last 6 months
- Any other relevant documents substantiating ownership of assets
- Self declaration with relevant supporting documents
Whenever there is request for trade in INACTIVE account, the client must specifically provide in writing either thru his registered Email ID or thru a Letter requesting to reactivate the INACTIVE account. The back office executive should also confirm from the Client of any changes in details provided by him in the interim – which should be supported by adequate duly attested documents and the same to be updated in the back office and UCC before the Client is allowed to trade.
Once the account is identified as INACTIVE, any Funds/Securities lying in our account will be returned to the client.
Policy on Pre Funded Instruments and Electronic Fund Transfer
If the aggregate value of pre-funded instruments is Rs. 50,000/- or more from client per day per client, we may accept the instruments only if the same are accompanied by the name of the bank account holder and number of the bank account debited for the purpose, duly certified by the issuing bank. The mode of certification may include the following either:
- Certificate from the issuing bank on its letterhead or on a plain paperwith the seal of the issuing bank.
- Certified copy of the requisition slip (portion which is retained by the bank) to issue the instrument.
- Certified copy of the passbook/bank statement for the account debited to issue the instrument.
- Authentication of the bank account-number debited and name of the account holder by the issuing bank on the reverse of the instrument. We also maintain an audit trail of the funds received through electronic fund transfers to ensure that the funds are received from their clients only
Error Account Policy
- The modification to the client code is done only in exceptional cases and not as a routine one.
- The reason for modification will be ascertained and analysed and genuineness established along with its impact on the clients studied before the modification. Voice recording of the trade in question in case done thru Call and Trade will be verified for the above analysis.
- Client code changes of non-institutional clients are allowed only for the following criteria;
- Error due to communication and/or punching or typing such that the original client code/name and the modified client code/name are similar to each other.
- Modification within relatives (Relative for this purpose would mean ‘Relative’ as defined under sec. 6 the Companies Act, 1956).
- For easy identification of error account, a separate client code in the UCC database of the Exchange is classified as “error account”.
- The Exchanges will be informed, by end of day along with the reasons for modification of client codes of non-institutional trades based on the aforesaid objective criteria.
- All such issues will be reported to the senior level Manager/Director and only with his approval, the modification will be carried after being satisfied that it is genuine the same is done to protect the interests of the client.
- The facility to modify the client codes will be available only at the Corporate Manager level and will not be given to the branches/franchise/ Authorised Person.
- Training program will be conducted for all the Dealers and they will be explained how code modifications can be misused and what steps should be taken to avoid the same. It also will be explained that code modifications should not be encouraged to the clients except for cases like ‘punching errors’/’typing errors’.
Physical Delivery – Derivative Contracts
F&O positions held till expiry used to be settled in cash on the basis of price of the underlying stock. However, since October 2019 the settlement takes place by giving or taking delivery of the actual shares. SEBI in their circular has mandated physical settlement of all derivative open positions. Starting from October 2019 expiry, all stock F&O contracts will be compulsorily physically settled. Open position in stock derivatives will be physically settled & settlement obligation computed accordingly.
The margins applicable depend on the delivery value of your contract. As mandated by exchange, the following positions in respect of contracts identified by Exchange shall be physically settled :
- Long futures shall result in a buy (security receivable) position
- Short futures shall result in a sell (security deliverable) position
In-the-money call options
- Long call exercised shall result in a buy (security receivable) position
- Short call assigned shall result in a sell (security deliverable) position
In-the-money put options
- Long put exercised shall result in a sell (security deliverable) position
- Short put assigned shall result in a buy (security receivable) position
Quantity to be delivered/received = Market lot * Number of contracts that result in delivery settlement.
Vachana RMS Policy on Physical Settlement
For Stock Futures
Margins requirement for all Futures Stock contracts will be increased one day prior to expiry (Wednesday and Thursday) in a phased manner and it will range from 50% to 100% of contract value by expiry day. Physical Delivery margin will be debited to your ledger along with Span and exposure. Example: SBIN Future margin requirement is 20% then you will be debited additional 40% each for last 2 days taking the total margin to 100% on Expiry day.
VACHANA RMS Policy on Physical Settlement
For Stock Options To prevent last minute delivery defaults, Delivery margins on open positions starts 4 days prior to expiry day. In a phased manner it will range from 20% to 100% by expiry day. The margins will be levied as illustrated below: For In the Money Options: ITM
|EOD||Premium + Additional Margin||Days|
|Expiry -4th trading Day||20% of VAR+ELM||Friday|
|Expiry -4th trading Day||40% of VAR+ELM||Monday|
|Expiry -4th trading Day||60% of VAR+ELM||Tuesday|
|Expiry -1 trading Day||80% of VAR+ELM||Wednesday|
|Expiry Day||100% of VAR+ELM||Thursday|
Applicable Additional Margin as Per Exchange
- However, at Vachana, on Wednesday and Thursday of the expiry week, we charge 50% of the contract value(This will cover the exchange stipulated margins explained above as well)
- Exchanges have defined Close to money (CTM) contracts which are a subset of ‘in the money (ITM)’ or contracts that expire with some intrinsic value.
- For Call Options – 3 ITM options strikes immediately below the final settlement price shall be considered as ‘CTM’. For example, if Wipro contract settles at 243 on expiry day, call options with strike 230, 235, and 240 will be marked as CTM contracts
- For Put Options – 3 ITM options strikes immediately above the final settlement price shall be considered as ‘CTM’. For example, if Wipro contract settles at 243 on expiry day, put options with strike 245, 250, and 255 will be marked as CTM contracts
- For long ITM Put options, you will be allowed to carry your position until expiry if you maintain sufficient margins as explained above. An exercised Put option would result in you having to deliver shares to the Exchange. As such
- If you hold the shares in your demat account, such shares will be debited towards meeting the Exchange settlement obligation.
- If you don’t hold the shares in your demat account, you wouldn’t be able to deliver the shares towards the physical delivery obligation, resulting in short delivery. Appropriate auction penalties from the Exchange shall be charged on your account for such short deliveries.
OTM (Out of the money) options are those strikes that are above the final settlement price for calls and below the final settlement price for puts. There won’t be any delivery obligation if your call option expires out of the money(OTM). Policy regarding Close to Money contracts (CTM) Exchanges have provided an option to not exercise long CTM contracts. We will be using this option on expiry day in case the cash balance and the intrinsic value of the option contract is less than twice the SPAN+Exposure margin (Exchange mandated) required to take a position in the futures contract of the same stock for the current expiry. For example: If you are long 1 lot of WIPRO Oct 19 240 CE and let it expire and WIPRO(Stock) settles at Rs. 243, this contract will be a CTM contract. The intrinsic value of this contract will be 3 [243-240] x 3200(lot size) = Rs 9600. Post-market closing we will check if the client’s free balance (Cash balance + Rs 9,600) > Rs 2,76,518 ( Twice the SPAN +Exposure margin for WIPRO Oct future contract). If client balance is lesser than Rs 2,76,518, this position will be marked as “Do not exercise” and the option contract will expire worthless. If the balance is more than the SPAN+Exposure, we will let the option be exercised, resulting in physical delivery. All costs arising out of such delivery obligations will be applied to the client’s account.
In the money contracts (ITM) All ITM contracts which aren’t CTM will be mandatorily exercised by the exchange. This means that anyone holding an ITM option contract will receive/give delivery of stocks depending on whether one is holding call/put options. All the costs arising out of this delivery obligation will be applied to the client’s account.
Out of the money contracts (OTM) All OTM options will expire worthless. There will be no delivery obligations arising out of this.
- Margin penalties will be charged as prescribed by the exchange for all F&O positions (including long options contracts).
- All costs arising out of such delivery obligations will be applied to the client’s account.
- Delivery of shares: you should have shares in your demat account equal to the deliverable quantity. In case quantity is short will attract auction penalty for entire deliverable quantity, which will be boned by you.
- Delivery of Funds: you should have sufficient balance in your account to take physical delivery. If you have debit balance after physical delivery, Vachana will liquidate the received stocks up to an extent of debit.
- Stocks received by means of physical settlement can only be sold after receiving delivery of stock in the demat account.
- You need to have a demat account linked to your trading account to trade in compulsory delivery contracts. This is to ensure that the stocks are credited in your demat account in the event of physical delivery
- All physically settled contracts will carry an STT levy of 0.1% of the contract value for both the buyer and the seller of the contract value.
- Any notional delivery will attract STT (Long in Futures and short in ITM call Option)
- Fresh long option positions will not be allowed on Wednesday and Thursday of the expiry week. Fresh positions will be allowed for futures and options writing contracts throughout the month.
- In the event that you do not fulfill these margin obligations on time, your positions are liable to be squared off. Any loss arising out of such square off would be the sole responsibility of the client. For any reason our RMS team is not able to square-off a margin shortfall position(s) and leads to compulsory physical delivery, the costs and risks of physical delivery will be applicable to the client.
- Contracts settled through physical settlement are illiquid closer to expiry. Any losses arising out of liquidation of position(s) with margin shortfall by our RMS team have to be borne by the client. It is advisable for a client to square-off such positions on their own well in time or add funds to carry the position(s) to expiry.
- Since there is a substantial increase in effort and risk to settle these F&O positions resulting in physical delivery, a brokerage of 0.25% of the physically settled value will be charged. For all netted-off positions (spread contracts, iron condor, etc), the brokerage will be charged at 0.1% of the physically settled value.
- If any shortfall of funds and deliverable stocks, on the expiry day, our RMS team may square off all your open positions in ‘In-the-money’ options and stock futures to avoid physical settlement. Vachana will not be responsible for any losses arising out of above actions / square-offs.
Exchange Transaction Charges rs. Per Cr.
Stamp Duty W.E.F 1-Jul-20
SEBI Rs. Per Cr.
|Equity Delivery||0.1% or Rs. 20/ Order whichever is lower||0.1% on both Buy and Sell||NSE:345, BSE:275||NSE: 0.015% on Buyer BSE: Rs.1500 per Cr||10||
@18% on Brokerage, Exchange Transaction Charges & SEBI Fees
|Equity Intraday||0.05% or Rs. 20/ Order whichever is lower||0.025% on the Sell Side||NSE:345, BSE:275||NSE: 0.003% on Buyer BSE: Rs.300 per Cr||10||
@18% on Brokerage, Exchange Transaction Charges & SEBI Fees
|Equity Futures||0.05% or Rs. 20/ Order whichever is lower||0.01% on the Sell Side||NSE:200, BSE:200||NSE: 0.002% on Buyer BSE: Rs.200 per Cr||10||
@18% on Brokerage, Exchange Transaction Charges & SEBI Fees
|Equity Options*||Rs. 20/ Executed Order||0.05% on both Buy and Sell||NSE:5300, BSE:2500||NSE: 0.003% on Buyer BSE: Rs.300 per Cr||10||
@18% on Brokerage, Exchange Transaction Charges & SEBI Fees
Note on Charges Securities Transaction Tax (STT)
STT is the tax levied by the Government when transacting on the securities market through any of the stock exchanges. It is levied on both “Buy” and “Sell” side when trading results in delivery and only on sell side when trading does not result in Delivery (like intraday or in F&O).
Exchange Transaction Charges
Exchange Transaction charges are levied by Exchanges on the traded volume of the customer. This is generally specified in terms of rupees per Crore of Turnover. Please note that BSE charges higher transaction charges separately for various groups of securities (P, R, X and Z group XC, XD, XT, Z and ZP).
Tax levied by the government on the services rendered is calculated presently @ 18% on brokerage, transaction charges, SEBI Fees and any other charges for services rendered by broker or exchange.
The SEBI charges is calculated presently @ Rs. 10 per crore (w.e.f. 01.06.2021) for both intraday and delivery trades on the traded volume of the customer in all segments.
As per Government Notification (CG-DL-E-30032020-218954) dated 30th March 2020, the implementation of Unified Stamp Duty is effective 01st of July 2020 replacing the existing state wise levy …read more.
A nominal amount of Rs. 20 + GST is charged extra per executed order placed through our dealing desk & Intraday (MIS) positions squared by our RMS team.
DP (Depository participant) charges
AMC (Annual maintenance charges)Rs. 400 + GST per year, DP transaction charge of Rs.14.5+ GST per scrip (for any value)will be debited for all sell side transaction only.As per Govt Notification w.e.f. 01st Jul 2020 all Off Market Transactions in Demat account would be subject to stamp duty charges on upfront basis @ 0.015% of the consideration value.DP transaction charge of Rs.14.5+ GST per scrip (for any value) will be debited for all stock movements from client account to Vachana Margin Account.
Payment Gateway charges
Payment gateway charges of Rs.9.00 + GST per transaction.
Collateral Margin Stock Movement charges
Both FNO Margin Pledging and Margin Unpledging will cost Rs.32 + GST per scrip irrespective of the quantity.