POLICY REGARDING TREATMENT OF DORMANT / INACTIVE ACCOUNTS AND RE-KYC

This document is the sole property of Bondbazaar Securities Private Limited (“BBSPL”). Any use or duplication of this document without express permission of BBSPL is strictly forbidden and illegal.

1. Background:

   SEBI vide Notification No: MIRSD/SE/Cir-19/2009, dated December 3, 2009, NSE vide Circular No. NSE/INSP/13606, dated: December 03, 2009 and NSE/INSP/14048 dated Feb 03, 2010; and BSE vide Notice No. 20091204-7, dated: December 04, 2009, and 20100203-30 dated Feb 03, 2010; have advised to the Stock Broker that a policy be framed to deal with the inactive/dormant accounts. The policy may vary depending on various rules, regulations and bye laws as may be prescribed by SEBI, exchanges or any other authority or as per internal policy of BBSPL from time to time.

   Further, in order to ensure uniformity across all the stock brokers, NSE vide Circulars NSE/INSP/43488 dated February 10, 2020, NSE/INSP/46506 dated December 01, 2020, NSE/INSP/ 49743 dated September 27, 2021, NSE/INSP/51770 dated March 25, 2022 and BSE vide Notice No.20200210-47 dated February 10, 2020, 20201201-27 dated December 01, 2020, 20210928-53 dated September 28, 2021, 20220325-58 dated March 25, 2022 have issued the below mentioned guidelines regarding the treatment of Inactive (Dormant) accounts of the clients.

2. Objective:

   In order to ensure safety & security of the Investors and prevent any “Error” and/or “Fraud” this “Dormant / In-Active Account & Re-KYC (Know Your Client) Policy” has been formulated, in compliance with the specific guidelines of Prevention of Money Laundering Act (PMLA) and/or as mandated by Securities and Exchange Board of India, the Stock Exchanges where the Company is a Trading Member and the Depositories where the Company is a Depository Participant.

   The Policy lays down the procedure shall be followed when an instruction for debit /credit or buy/sell is received from an account which is Dormant or In-Active. This Policy gives full description like the time period and method considered for terming an account Dormant or In-Active as well as various steps required for re-activating such Dormant Account / In-Active Account in both Trading & Demat Accounts of the Clients of the Company.

3. Concepts:

   The Compliance Officer shall at regular fortnightly intervals, shall review and analyze the Trading Accounts of the Clients and classify and flag them as “Dormant Accounts” or “InActive Accounts” based on the parameters defined below, as part of Customer Due Diligence Process.

   “Dormant / In-Active Account” – The term inactive account refers to such account wherein no trades have been carried out since last 12 months across all Exchanges / Segments/ RFQ / IPO

4. Treatment of Dormant / In-Active Account

   1. The Compliance Officer shall review and analyze the Trading Accounts of the Clients and classify and flag them as “Dormant” / “In-Active” Account(s) based on the parameters defined in Point No. 2, as part of Customer Due Diligence Process.
   2. Process of inactive will be run every day.
   3. If a client does not trade in NSE / BSE (Exchange, RFQ , IPO) Platform during a period of last 12 months, such client codes shall be identified as Dormant Accounts/Inactive Account and will be flagged as ‘Inactive’ in backoffice and UCC database of the exchanges.
   4. All Dormant Accounts/Inactive Accounts shall be frozen immediately and the client shall not be permitted to undertake any further transaction in such Dormant Account upon the instructions of the Compliance Officer.
   5. The RMS Officer shall De-Map the Client Code upon the instructions of the Compliance Officer.
   6. The Operations Team shall mark the Client Code as In-Active over the Stock Exchange Interface.
   7. A Dormant Account or In-Active Account shall be “Re-Activated” only upon proper due-diligence process and fulfilling of such conditions as detailed below.

5. Analysis

   1. Upon the receipt of any written application for activation and /or reactivation of Dormant Account / Inactive Account is received from the client, the same shall be reported to the Compliance Officer.
   2. The Operations Team shall seek necessary clarifications and supporting documents from the Client to satisfy himself/herself in respect of Identity and Bonafide of the client and shall report to the Compliance Officer.
   3. The Operations Team shall upon Careful Due Diligence shall analyze the genunity of the Client and upon satisfaction shall allow the Re-Activation of the Dormant Account / In-Active Account, with necessary reasoning and clarifications.
   4. If in case in the opinion of the Compliance Officer that the request for reactivation of Dormant Account /Inactive Account violates the applicable Rules or Regulations for the time being in force, the same shall be reported to the Designated Directors and necessary steps shall be initiated.

6. Due Diligence Process:

   The Compliance Officer shall exercise Caution & Due Diligence in respect of “Dormant Account” / Inactive Account” to prevent any “Error” and/or “Fraud” due to their “Dormant / In-Active” status.T

   1. Resumption of Trading for Dormant Account / Inactive Account:

      Once the account is flagged as Inactive, the client will not be able to place any order/trade in any segments/exchanges till its activated again. Further, such client needs to submit Declaration for Reactivation if they wish to activate the account. Account activation through Declaration can be done only within one year from the date of flagging of the client account “as Inactive”, If the account is in Inactive state, client will be enforced to submit the declaration of Reactivation during client login.

      If the account remains inactive (mean no activity for 2 years from the date of last Trade day), then client will have to undergo Re-KYC.

      Reactivation /Re-KYC will be applicable from the client, after 1 year from the date of flagging of client “as Inactive”.

      1. Re-activation shall be allowed only after undertaking sufficient due diligence and on fulfilling the following requirements: On receipt of duly filled and updated Re-KYC alongwith relevant proofs. A “Inactive Account” may be re-activated for trading on receipt of written application for reactivation from the client along with following necessary supporting documents such as: a) PAN Card, b) Latest Proof of Address as mandated under Rules and Regulations and c) Bank Account Statement
      2. The Operations Team shall check whether the client is listed as a Debarred entity.
      3. Necessary clearances shall be obtained from the RMS Officer and Compliance Officer for processing the application for re-activation.
      4. The trading account may get re-activated within 7 working days of submission of application of re-activation, upon the discretion and satisfaction of the Compliance Officer.
      5. The Operations Team upon satisfying himself with the aforesaid process shall reactivate the account over the Stock Exchange Interface and the RMS Officer to map the Client Code to the desired Dealer.

      Note: In case a client has undertaken a transaction in respect of IPO/ Mutual Fund subscription and DP operations during this period, the same may be considered and the requirement for fresh documentation, due diligence and IPV may not be required.

   2. Change of Critical Client Details:

      Request for change in critical client details like Address, Bank Account, Demat Account, Email Address, Mobile Number / Phone Number, etc. shall be processed only after proper written application by the Client along with valid supporting’s and “In-Person” verification of the client by the Operations Team.

   3. Resumption of Activity in Depository Accounts which are In-Active / Dormant Account

      1. Delivery Instructions received in In-Active and/Dormant Accounts are to be brought to the Notice of the Compliance Officer.
      2. Transactions would be undertaken in such accounts upon fulfilling the procedures mentioned herein above.

7. Re-KYC of Clients

   1. The objective of the Re-KYC is to identity theft, Prevention of Terrorist Financing, Money Laundering and Financial Fraud. KYC allows to understand the Customer better and manage risks prudently. Re-KYC is mandatory and there is no escaping the paperwork while investing in financial products.

      Requirement for undertaking an IPV shall not be required where the KYC of the investor is completed using the Aadhaar authentication / verification of UIDAI or when the KYC form has been submitted online, documents have been provided through Digi locker or any other source which could be verified online.

   2. Personal information needs to be provided and has to be signed by the account holder of the Company. The KYC Team is mandated to periodically update its Client's identification data including the Client's photograph, a proof of identity, a NRI status proof and a proof of address. The KYC updation of the Clients shall be done once in every 2 years even if there is no change in the identity or address of the Client.
   3. BBSPL will not undertake any activity including sending oral or written business communications to client to trade in order to prevent accounts from being flagged inactive.

8. Record Maintenance:

   The Compliance Officer shall be responsible for the record maintenance of such activities.

9. Return of Clients Assets:

   All client accounts shall be settled on monthly or quarterly basis (as per the client preferences) in the manner prescribed from time to time.

   In case of non-settlement of the client accounts due to non-availability of client’s bank account and/or demat account details and/or non-traceability of client, efforts shall be made to trace such client(s) to settle their funds and securities.

   An audit trail shall be maintained for such efforts made for tracing such clients and settling funds and securities of such clients.

   In case of inability to trace such clients even after taking all possible efforts, following steps shall be taken:

   1. Open one separate Client Bank/Client collateral Demat account and immediately set aside the funds and securities of such clients in such account.
   2. Maintain audit trail of UCC wise client funds transferred to/from such bank account and UCC wise / Beneficial Owner (BO) ID wise securities transferred to/from such demat account (as the case may be).
   3. Submit UCC wise/BO ID wise and fund/securities information of such account to the Exchangeon quarterly basis. The mechanism and the format of the same shall be shared as directed / guidedby the Exchanges.
   4. In case of receipt of any claims from such clients, accounts of such clients shall be immediately settled and payment/delivery shall be made to the respective clients only.

10. Review:

    The Board of Directors or Compliance Officer of the company shall review and update this policy from time to time and make the necessary changes as per the amendments introduced by the regulators.

Mr. Akshay Narkar

Compliance Officer