Surveillance Policy

1. Objective

This policy establishes a robust framework for monitoring and managing market activities to detect and prevent potential market abuse, ensure compliance with regulatory standards, and protect investor interests.

2. Scope

This policy applies to all clients, employees, and associated persons engaged in activities related to trading, settlement, and custody of securities. It encompasses all digital and physical platforms used for trading and client interactions.

3. Alert Generation System

To proactively identify suspicious activities, the following alert themes are monitored:

Multiple demat accounts opened with identical demographic details.

Frequent changes in demat account information (e.g., address, email, mobile number).

High-frequency off-market transfers inconsistent with client's income or net worth.

Off-market transfers immediately following modifications in account details.

Unusual pledge transactions not aligned with client's financial profile.

Sudden increase in transaction activities followed by account dormancy.

Off-market transfers with reasons such as gifts or donations to unrelated parties.

These alerts are generated daily using back-office software and are reviewed by the Compliance Officer in collaboration with the Risk Management and KYC teams.

4. Alert Processing and Documentation

Upon generation, each alert undergoes the following process:

Initial Review: Compliance Officer assesses the alert's validity and potential risk.

Client Verification: KYC team contacts the client for explanations and necessary documentation.

Analysis: Review of client's trading history, communication logs, and transaction patterns.

Reporting: Adverse findings are reported to the Depository and regulatory bodies within 7 days.

All actions taken are documented and stored for audit purposes.

5. Time Frame for Alert Disposition

All alerts are reviewed and updated within 30 days. If delays occur, reasons are documented, and extensions are sought from the Depository as necessary. The Board of Directors is informed of any significant delays.

6. Management Information System (MIS) Reporting

A quarterly MIS report is submitted to the Board of Directors, detailing:

Number of alerts pending at the beginning and end of the quarter.

Alerts generated and disposed of during the quarter.

Pending actions and reasons for delays.

This ensures transparency and accountability in the surveillance process.

7. Quarterly Reporting Requirement

In compliance with the latest CDSL circulars on surveillance measures, the company shall submit a quarterly surveillance report to the designated authority within 15 days from the end of each quarter. The report shall include, but not be limited to, the following:

Summary of Surveillance Activities: An overview of surveillance measures undertaken during the quarter.

Alerts & Exceptions: Details of any suspicious transactions, alerts generated, and subsequent actions taken.

Remedial Actions: Steps implemented to address any irregularities or gaps identified.

Regulatory Compliance Status: Confirmation of adherence to SEBI/CDSL guidelines and any deviations observed.

System Enhancements: Updates on improvements made to surveillance mechanisms, if any.

The reports will be provided to CDSL in the following format.

Details of any major surveillance action taken (other than alerts reported to depository), if any, during the quarter:

The report shall be reviewed by the Compliance Officer prior to submission. In cases where there are no reportable incidents, a 'NIL Report' shall be filed within the stipulated timeframe.

8. Employee Certification and Training

All employees involved in surveillance activities must obtain certification in NISM Series VII – Securities Operation and Risk Management (SORM) within one year of employment. Employees performing basic clerical tasks are exempt from this requirement but must be supervised by certified personnel.

9. Data Privacy and Security

We are committed to protecting the privacy of our clients and have implemented necessary measures to safeguard personal information:

Two-Factor Authentication (2FA): Clients must use 2FA for secure access to trading platforms and back-office systems.

Data Encryption: All sensitive data is encrypted during transmission and storage.

Access Controls: Strict access controls are enforced to limit data access to authorized personnel only.

Regular Audits: Periodic audits are conducted to ensure compliance with data protection standards.

These measures are in line with SEBI and exchange guidelines for internet-based trading.

10. Review and Updates

This policy is reviewed annually and updated as needed to comply with regulatory changes. In case of significant regulatory updates, the policy is revised promptly, and all stakeholders are notified accordingly.

11. Escalation Process

In case of suspected market abuse or significant surveillance findings:

Immediate Escalation: The Compliance Officer escalates the issue to the Board of Directors.

Investigation: A thorough investigation is conducted, including reviewing communications, transaction logs, and CCTV footage if available.

Reporting: Findings are reported to the Depository and regulatory bodies in a timely manner.

This process ensures prompt action and compliance with regulatory requirements.

12. Client Responsibilities

Clients are expected to:

Maintain the confidentiality of their login credentials and 2FA information.

Promptly notify us of any unauthorized access or suspicious activities.

Provide accurate and up-to-date information during account opening and KYC processes.

Comply with all applicable laws and regulations governing trading activities.

Failure to adhere to these responsibilities may result in account restrictions or termination.