Policy on Pre-Funded Instruments
This policy is framed in accordance with SEBI Circular No. SEBI/MRD/SE/Cir-33/2003/27/08, dated August 27, 2003, which specifies the modes of receipt and payment of funds, including the acceptance of Demand Drafts by stockbrokers.
At AUM Securities Private Limited (ASPL), a Member of the National Stock Exchange Ltd. and The Stock Exchange Mumbai, we do not accept funds from clients in the form of Pay Orders, Demand Drafts, Banker’s Cheques, or through internet banking channels unless specific conditions are met, as outlined below.
Policy Guidelines
1. General Provisions
While SEBI permits brokers to accept pre-funded instruments, such as Pay Orders, Demand Drafts, or Banker’s Cheques, it is critical to maintain an audit trail of funds to ensure compliance with SEBI regulations. This includes verifying the source of funds to prevent third-party transactions and unidentified money, which could compromise the integrity of the securities market.
To address these requirements, ASPL adheres to the following guidelines:
2. Acceptance of Pre-Funded Instruments
Pre-funded instruments will be accepted under the following conditions:
a. Aggregate Value of ₹50,000 or More Per Day Per Client
For instruments with an aggregate value of ₹50,000 or more in a single day, ASPL will accept the funds only if accompanied by proper verification from the issuing bank. This verification must confirm the name of the account holder and the bank account number debited for the issuance of the instrument.
The verification may be provided through one of the following methods:
1.Bank Certificate
A certificate issued by the bank on its letterhead or plain paper, bearing the bank’s official seal.
2.Requisition Slip
A certified copy of the requisition slip (the portion retained by the bank) for issuing the instrument.
3.Passbook/Bank Statement
A certified copy of the passbook or bank statement showing the debit for the issuance of the instrument.
4.Authentication on the Instrument
Authentication of the bank account number debited and the account holder’s name, provided by the issuing bank on the reverse side of the instrument.
3. Audit Trail and Fund Verification
ASPL ensures that all funds received via pre-funded instruments or electronic transfers are traceable to the client. This includes: * maintaining a complete audit trail of funds received.
* verifying that the funds originate solely from the client’s account, in line with SEBI regulations.
By adhering to these guidelines, ASPL ensures compliance with regulatory requirements, promotes transparency, and safeguards the integrity of the securities market.