Risk Management System (RMS) Policy

A Risk Management System is integral to an efficient Risk system. We have implemented a complete risk management system, constantly upgraded as per the Exchange, SEBI norm, and the Market Movement.

The Model of RMS in Enrich Financial Solution Pvt Ltd. consists of ENRICH MONEY Owned Branches, Franchisee & Sub-brokers-Authorized Person.

All the staff, Branches, Branch Manager, and Sub-broker needs to understand and follow the policy as it is an integral part of a company.

RMS Function includes:

• To check capital adequacy for exposure and requirements of the client

• Monitoring of Clients Order, Patterns of Trade, Order rejections, increasing of Exposure/limits.

• Monitoring MTM profit/loss incurred out of trades.

• Benchmarking Margin v/s Exposure of client.

• Decision-taking with regard to squaring off positions on account of MTM loss, Margin shortfalls, or any other reasons that may come across

Risk management in relation to all the trading activities for Clients is handled by RMS & Surveillance Department

Risk Management (RMS) Policy

Exchange: NSE & COMMODITY

Enrich Financial Solution Pvt Ltd. This risk management policy document has been designed to understand the margin policies of the company in the Equity and Commodity trading segments. Risk Management is an integral part of any organization. Various risks include credit Risk, Market Risk, default Risk, liquidity Risk, delivery risk etc.

POLICY FOR SETTING THE EXPOSURE LIMIT

Products	TYPE	Exposure – NSE Cash	NFO- Derivatives	MCX- Derivatives
NRML	Delivery	NA	1x	NA
MIS	Intraday	5x (Nifty 500 List)	1x	1x
CNC	Delivery	1X	NA	NA
CO &BO	Intraday	NA	NA	1X

1. Square off /close out of the Positions/ Stocks etc. by ENRICH.

ENRICH reserves and retains the right to sell/liquidate or square off the client’s open positions at any time to meet the trading obligations/ Margins/ MTM/ Debits etc., including the CUSA account stocks/ Demat account stocks with POA etc. Under no circumstances ENRICH shall not be held responsible/liable for any loss/opportunity losses/ charges due to the square off /non-square off positions as per this policy. It is the responsibility and onus of the client to continuously monitor his positions and square off them well before the stipulated cut off time for time based square off.

MTM Loss beyond 75% or ledger debit whichever is earlier the position will be squared off

Payments from clients can be accepted in the form of Cheque or Fund Transfer, only after the fund has been cleared, limit will be provided.

The Balance and trade Confirmation are sent via SMS on Daily Basis on EOD

2. Margin Square Off:

When the client margin shortfall exceeds 101% (margin shortage >1%) or more of the required margins, client margins could have reduced due to MTM loss incurred or increase of exchange margins required on carry forward positions. ENRICH shall reduce or completely square off the client’s open positions to reduce the margin shortfall deficit. It is possible that due to extreme volatility / high leverages used by the client’s / market freeze or any other conditions, the Margin shortfall may exceed much beyond 101% of the required capital / margin placed by the client before ENRICH can successfully square off / reduce the positions.

Exchange uploads multiple margin files during the trading day, and if the Peak margin penalty if any will be debited to the client’s respective accounts

Note: Realized Intraday profits are not considered as the margin for the trading on the same day

3. MTM Square Off

Square-off order initiated when the MTM reaches 75% of loss and the order can be matched only on the available price in the market and we can’t guarantee the square-off taken place at 75% all the time. The % can vary depending on the matched price of the square off order. Further, since some of these actions are not automated in the system, ENRICH can only square off positions on a best effort basis. It is possible that due to extreme volatility / high leverages used by the clients / market/scrip freeze or any other conditions, the MTM loss may exceed even 100% of capital / margin placed by the client before ENRICH can square off the positions.

4. Intraday Square off - MIS / Cover Order (CO) and Bracket order (BO) -Time based Square off:

Equity /CM	Futures & Options	Commodity
3:15 PM	3:15 PM	20 minutes before the market closure.

5. Physical settlement of the derivative contracts in the future/ Option segment

Depends upon the client requirements.

6. Commodity Tender Period Positions (FUTURE):

At ENRICH, we do not allow clients for Physical Delivery Positions. All the deliverable contracts of MCX “Tender Period positions” as mentioned by exchange from time to time.

Clients’ open positions will therefore be Squared OFF one day prior to the start of the “Tender Period” of the contract. No positions will be allowed to carry over in Tender Periods.

Please note, the contracts will be blocked to fresh trade 1 day prior to Tender period start

7. Commodity Options Contracts & Devolvement Process

The term Devolvement means conversion of a commodity option in the money (ITM) / Close to money (CTM) contract to commodity futures contract on expiry day. ENRICH shall not allow any option contract to be devolved to the future Contract. Clients’ open positions will therefore be Squared OFF after 6.00PM on expiry day.

8. Physical settlement of the derivative contracts in the future/ Option segment

ENRICH shall not allow any scrip to be settled for physical delivery on the expiry day. All the physical delivery Future and option open positions for current month shall square off (Both in the Money & Out of the Money) on the expiry day if not squared off by the client.

9. Additional Surveillance Margin: (ASM) & Graded Surveillance Measures. (GSM).

In order to enhance market integrity and safeguard the interest of the investors, SEBI has introduced additional surveillance margin (ASM) on securities that witness abnormal price rise, which not commensurate with the net worth and fundamentals of the company. ENRICH as a risk containment measure shall allow trading in these shares only on Cash & Carry product (CNC) i.e., 100% margin on the first stages, and trading in the ASM/ GSM stages of 2 and above are blocked and square off allowed.

10. Pay-in and Payout.

Clients can transfer the amount online at any time, through the fund transfer facility offered by Enrich, i.e., UPI/RAZZOR/ ATOM, /IMPS/NEFT/RTGS. The amount will be credited to the back office and trading terminal accordingly. (Refer pay-in /payout policy in the web site).

11. Payout of funds:

Payout are allowed during the trading hours, and if the clients place the withdrawal request, on any working day before 4.00 PM in any segments, funds will be processed and transferred to the client respective bank account on the same day. If the withdrawal request is placed on any working day after 4.00PM, the funds will be processed and transferred to the client respective bank account on the next working day.

1) If the customer performs Pay-in via UPI or Net banking (through Razorpay or Atom) then Enrich shall not allow Pay-out on the same day

2) If the customers transfer funds via Net banking (NEFT, IMPS, RTGS, UPI) then the current settlement policy of same day Pay-out shall continue

3) Payout requests made on any bank holidays/trading holidays/ 2nd and 4th Saturdays and Sundays, will be processed and credited to the client respective bank accounts on next working day.

12. Penalty

1) Any delayed payment (after T+2) will attract 21% interest p.a.

2) Any penalty by the exchange on the transaction will be debited to the respective client.

3) In case of Bounce cheque penalty of Rs.120/- will be debited to account

4) In case of Commodity Margin or Peak Margin shortfall, 1% or 5% penalty will be debited in the account

Note: Policy will be periodically reviewed and update on ENRICH RMS Policy as per the regulate requirements.

RMS Policies and Procedures

(I) Setting up client's exposure limits:

The Exchange may, from time to time, fix client exposure limits in the interest of orderly working of the markets. Within that overall ceiling, a client can trade within the exposure limit set from time to time by the Broker for the client.

ENRICH MONEY impose new limits urgently based on risk perception, the risk profile of the client, and other factors considered relevant, including but not limited to limits on account of exchange / SEBI directions/limits (such as broker level/market level limits in security-specific / volume specific exposures, etc.).

Sometimes ENRICH may be unable to inform the client of such variation, reduction, or imposition in advance. ENRICH won't be the authority for such contrast, reduction, or client's inability to cause any order through the online trading system on their trading account of any such contrast, reduction, or imposition of limits.

At the sole discretion of the Commodity Broker, a client may be allowed to trade beyond the exposure limit, or the limit may be increased. A client having availed such indulgence shall not be heard to complain about his trades only on this account and shall meet the margin shortfall at the earliest without waiting for the reminder. The golden rule is to Limit your exposure to limit your risk to your means.

While computing the available margin following parameters consider-

• Margin-based limit is set on NSE & MCX Segment.

• clear credit lying in the client's settlement and margin ledger account

• Any online funds transfer or hold quantity through bank entree.

• Margin quantity of open positions (in case of derivatives)

• Outstation cheques are not entertained. All the cheques collected against the trading positions would have a valid MICR number.

• All the cheque dishonor cases were viewed seriously, and debit certain amounts in such accounts will be cleared from the surveillance dept.

2. Exposure limits shall be only against the current month's contract as decided by the Enrich Financial Solution Pvt Ltd. from time to time.

3. In the case of Futures, Clients shall be allowed to trade only up to the applicable client-wise position limits set by the Exchanges/Regulators from time to time

(II) Setting up Terminal/Branch level limits

Trading Terminals are allotted to Members by exchanges. These terminals enable members to place, modify and execute orders on behalf of clients. There may be instances where due to punching error, unusual orders may be placed at high prices, which might lead to the execution of unrealistic orders or orders being executed at unrealistic prices. In cases where the order/price of such orders is high, it might lead to huge losses to the broker. To avoid such a situation, certain limits must be prescribed for each terminal allotted to a member broker.

We ensure documentation of internal controls on areas like order modification/cancellation, client code changes, and post-trade activities are in place and are being updated from time to time.

We guarantee an observance mechanism for clients’ debits/obligations and acceptable assortment procedures.

The following limits shall be defined for each terminal:

• Quantity Limit for each order

• Value Limit for each order

• User value limit for each user ID

• User quantity limit for each user ID

• Branch value limit for each Branch ID

• Spread Order Quantity and Value Limit (Commodity Segment) Checks in place

• We have a dedicated Risk monitoring team who monitors the exposure, limit, etc.

• We have NEST Terminal, which has a facility to block the client and restrict overexposure use.

• Terminal limits will be set up by the Front Office official designated at Corporate Office.

• Direct terminals will be allotted on an exceptional basis only.

• No user/ branch will be provided an unlimited limit.

• Limits shall be monitored daily, taking the following criteria: Turnover, Exposure, past trends, Location, and Deposit/Collateral.

• Trading in illiquid commodities shall not be permitted.

(III) Order Receipt and Execution

Our risk department monitors all Orders routed through Nest, and status orders get executed after their confirmation about the client's finances and margin.

The dealers take utmost care while executing the clients' trades regarding the accuracy of Client Code, Quantity and Price, etc. The dealers promptly execute the orders from the clients, and the oral confirmation of the placement of the orders is immediately provided to the clients. Moreover, only registered clients are allowed to enter the dealing room to place orders.

The clients are divided into groups among the dealers and sub-brokers at the head office level so that a particular dealer can serve a specific group of clients, which helps the dealer to understand the client investment strategy in a better way & serve them accordingly. The orders are entered instantly by the dealer on the instruction given by the client. Upon executing valid orders into trade, dealers confirm the trade with the client to avoid future disputes.

At the end of the trading hours, the dealer informs the clients about the execution of the orders placed by the clients. Also, a trade confirmation SMS message covering details of all the trades executed is forwarded to the client after completion of trading hours on the registered Mobile No. of the client.

We have a telephonic recording system for the receipt of orders. We maintained the said record in the machine, increased the hard disk capacity to store increased data, transferred the same record in tape, and maintained the said record in safe custody forever.

(IV) Monitoring of Debit Balances

We have a system for monitoring client debit balances daily and online. We have dedicated resources to monitor the debtors as well as ask for the margin cheque. Clients are followed up by tele-calling, sending SMS and emails, and remarks are noted for each client.

• No trade is allowed if the debit balance continues for 3 days

• No fresh trade is allowed unless old dues are recovered.

• They and we both handle clients of Sub-brokers and Authorized Persons

• The debits in the client's account are either secured against sub-brokers deposits or are secured against collaterals.

• The company has a policy to transfer the securities of the client till the payment in respect thereof is received.

Exchanges follow a settlement schedule of T+1 in the Commodity segment, daily MtoM settlement & Final Settlement in the Futures segment.

As per ENRICH MONEY policy, the customers need to pay the debit balance on the day of purchase itself or on the next day. The left-out clients' debit won't be allowed to carry forward happening on the next few days. No extension is possible happening on the next day in, whatever the circumstances. All the debits over 3 days will be cleared from the Surveillance dept without further intimation to branches.

(IV) Client Code Modification:

Trades are made only on the exchange platform, and if any trades need to be transferred because of the wrong punching code, it is done in the exchange platform system. Client code changes were accepted only through an e-mail or written letter before the post-closing session. Client code modification will be done within the time limit given by the respective exchange.

Every request for client code modification is to be sent to the RMS dept in the predefined format, and proper care should be taken in filling the Exchange order number, trade number, old client code, new client code, and the reasons for wrong Punching.

The reason for the modification is to be analyzed by the risk management department regarding the client's ledger a/c; trading pattern etc. & if found genuine, then the modification will be approved. The modification will only be allowed in delivery trades where an error has occurred genuinely.

Penalties & actions taken by the exchange against the broker/member shall be passed on to the respective client & in addition, penalties & action shall be taken against the Sub-Broker's/AP / Branches/ Dealers.

(V) Margin Collection Procedure

ENRICH MONEY has an RMS department at its corporate office situated at #241,85-86, Ziat Court, Rangarajapuram Main Road, Kodambakkam, Chennai - 600024. The ENRICH has an RMS (Risk Management System) Team, who is responsible for setting up the Client wise Trading limits, Margin collection & Reporting procedure as described below:

Client Limits are allowed as per margin norms of the relevant exchanges. Clients must provide an upfront margin in the form of funds before any trade.

The RMS department monitors all orders & trades given by clients and executed in the trading terminal. The departments are also vigilant about all order rejections and spurt in exposures. The ENRICH MONEY takes proper and adequate margin from clients per the exchange/SEBI norms in the form of funds reported to the exchange as per the exchange guideline.

We take margin in the form of Funds through Account Payee Cheque, Electronic Fund Transfer, and Securities. We have most monitoring systems that bar the acceptance of third-party cheques.

At the end of the day, the Shortage of Client margin is calculated and reported to the exchange. During the trading hours, if any short margin is observed, the RMS team follows internal RMS policy and due diligence and updates the status to the respective branch/ SB/AP and clients; if the client doesn’t respond RMS team Sq-off the open position and subsequently intimate to the client.

The trading limit is set by RMS based on the available margin amount and calculated by considering the trading price before the trading day (T—1 day) daily. The debit and credit status is emailed or SMS to the client daily. In the case of debit balances, a regular follow-up has been done. The RMS team does monitor the debtors, and if the client exceeds the exchange norms, the trading is halted unless and until the debit is not cleared by the client.

(VI) Margin Reporting Procedure:

Daily Exchange provides Margin Files to the Trading member in Commodity Segment.The ENRICH MONEY report details of Initial Margins collected from their clients for the commodity segment

The ENRICH report details of Initial Margins collected from their clients for Commodity segment

The Mechanism For Regular Reporting of Margin

• Free Balance available on the current day (T Day) with the client in NSE & MCX segments of the Exchange will be considered for margin collection

• Cheques dishonored/reversed or not cleared up to T+4 working days should not be considered for Margin Money.

After preparing the margin report file, the RMS person forwards the reporting file to the person who is authorized to recheck the report file before uploading it on exchange.The status of the file uploaded shall be checked regularly on the day of uploading after a few hours of uploading the same.

Penalty if any occurring out of the short payment will be debited to the respective client’s account after t+5 days Information related to margin applicable, utilized and required / balance in respect of each client is to be sent daily to the respective clients in both the segments.

• Client code and name, Trade day (T)

• Total margin deposit placed by the client up to day T-1 (with a break-up in terms of cash, FDRs, BGs, and securities)

• Margin used up to the top of day T-1

• Margin deposit placed by the consumer on day T (with a break-up in terms of money, FDRs, BGs, and securities) Margin adjustments for day T

• Margin standing (balance with the member/due from the client) at the top of day T

(VII) Margin Shortfall Penalty

Short-collection/Non-collection of client margins (MCX Segments)

With reference to SEBI circular no. CIR/DNPD/7/2011 dated August 01, 2011, wherein it has been stated that “Stock Exchanges shall levy a penalty for short collection/ no collection of margins from clients in MCX segments. W.e.f. September 01, 2011. As per the above circular, the penalty applicable to the client’s trading account for the MCX segment will be as follows w.e.f. September 01, 2011:

Margin Shortage per day for each Segment	Penalty %
(< Rs 1 lakh) And (< 10% of applicable margin)	0.50 %
(≥ Rs 1 lakh) Or (≥ 10% of applicable margin)	1.00 %

(VIII) Right to Sale of client’s securities or closing the client’s open position without giving notice

1. ENRICH MONEY maintains specific banking and depository accounts, informed to the clients from time to time, for handling clients’ funds. The clients shall ensure timely availability of funds in the required form and manner, within the stipulated time, and in the designated bank and depository account(s) for meeting their liabilities and obtaining proper credit. ENRICH MONEY does not undertake responsibility for any delay or other consequences arising from payment to any other account or non-receipt in time and manner in the designated account(s).

2. In the event of the shopper failing to take care of / provide applicable margin cash needed to sustain the outstanding market positions of the shopper, the corporate shall be entitled, at its possibility and liberty, to liquidate/shut out all outstanding market positions or any half thereof specified the outstanding market positions area unit either zeroed out or reduced to AN extent wherever on the market margin covers the market positions remaining when such determine.

3. Any and every one of the losses and the monetary charges on the mercantilism account equivalent to liquidation/closing-out will be charged to and borne by the shopper. The company shall also have the right to close out any intraday positions taken by the client in the above circumstances. Such liquidation/close-out may be without any prior reference or notice to the client.

4. RMS Team may initiate liquidation of commodities in the following circumstances:

• In the case of Margin Trades, if the open position is neither square off nor regenerated to Delivery by Client(s) at intervals of the stipulated time.

• In the case of Margin Trades, where Mark to Market Loss on the open position has reached the 80% of the margins placed with Enrich Financial Solution Pvt Ltd., the client (s) have not taken any steps to refill the margin or cut back the Mark to plug loss.

• In all alternative cases, wherever the margin placed by the client (s) falls wanting the need or the bounds given to the client (s) are broken

• where the client (s) have defaulted on their existing obligation/ failed to make payments/deliver to Enrich Financial Solution Pvt Ltd.with the stipulated time

• Extreme volatility in the market, in particular, the mcx segment

• There are any restrictions imposed by the exchange or regulator on the contract

• The client is undertaking any illegal trading practice, or the client is suspected to be indulging in MCX commodities.

• The client has taken or intends to take a new position in a commodity in the next or far month's contract.

• There are any unforeseen adverse market conditions or any natural calamity affecting the operation of the market.

• When the margin amount due from the client is not received by T+2 days.

• When any initial margin available in the client’s account is less than the requirement for SPAN margin or Initial Margin

• In case of liquidating a client position arising from MTM loss, Enrich Financial Solution Pvt Ltd.informs the client about the MTM loss on the trading platform once MTM loss is 35% and every 5% incremental.

• Once MTM loss crosses 75%-80%, Enrich Financial Solution Pvt Ltd.would liquidate the client's position if the client has not paid for loss arising in the outstanding open position or has squared off open position.

• Enrich Financial Solution Pvt Ltd has a proper system to maintain all records of communication done with clients and sub-brokers/authorized persons.

• RMS Team can add some of the more criteria based on the circumstances as they may deem fit.

• Risk Head(s) to decide on the priority of the commodity to be squared off from the commodity of a client. i.e., which scrip is to be liquidated first, also, the Commodity futures in which the futures are to be squared off.

• All positions squared off by RMS Team must be intimated to the client at the earliest, but not later than the same calendar day, and contract notes be dispatched as per exchange stipulations without any exception.

(IX) Conditions under which a client may not be allowed to take a further position or his existing position may be closed

Enrich Financial Solution Pvt Ltd shall have absolute discretion and authority to limit the consumer’s volume of business or to shut any existing position of a client while not giving any previous notice to the client under the following conditions:

• SEBI or Exchange imposing restrictions on further exposures in cases of extreme volatility in the market.

• Client or the Broker prodigious or touching exposure limits set by the Exchange within the specific artifact.

• Reasonable doubt as to bonafide of the transaction or identity of the client in the light of the financial status and objectives as disclosed in the KYC form.

• Reasonable doubt on the dealing being cross trade, circular trade, dishonest observation, or connected with value manipulation or market rigging.

• SEBI or different competent authority issuance of a debarment order against the shopper from shopping for, merchandising, or dealing in securities unless the order is vacated.

• The client has taken or intends to take a new position in a commodity that is in an illiquid contract

• The markets are closed due to abnormal rises or falls in the market.

• Enrich Financial Solution Pvt Ltd. shall also have a right to close existing positions of the clients in the above mentioned circumstances

• Enrich Financial Solution Pvt Ltd. shall not be responsible for any loss incurred, and the client shall indemnify Enrich Financial Solution Pvt Ltd. in this regard.

(X) Temporarily suspending or closing a client’s account based on the client’s request

Any shopper devouring or quickly suspending his or her mercantilism account should offer such a request in writing to the management. After management’s approval, further dealing in such a client’s account will be blocked. Whenever trade has to be resumed in any suspended client account, a request in writing should be made by the client to the management.

The management may ask for updated financial information and other details for reactivating such an account. After receiving the necessary documents, details, etc., and approval from the management, the client account will be reactivated, and the transaction will be carried out.Similarly, any consumer apparent to close his / her account for good is needed to tell in writing, and therefore the call during this regard is taken by the management. After necessary approval from the management, the client code will be deactivated. Only after scrutinizing the compliance requirements and a “no pending queries” confirmation is taken funds account will be settled.

(XI) De-registering, a client

• Enrich Financial Solution Pvt Ltd. may, at its absolute discretion, decide to deregister a particular client if found that:

• SEBI or the other regulatory body has passed an Associate in Nursing order against such shopper, prohibiting or suspending such shopper from collaborating within the artifact market

• Such client has been indicted by a regulatory body or any government

• Enforcement agency in case of market manipulation, insider trading, or any other case involving violating any law, rule, regulation, guideline, or circular governing the commodity market.

• On the death/lunacy or other disability of the client

• Such clients account has been lying dormant for a long time, or the client is not traceable

• If the Client is a partnership firm, if any steps have been taken by the client and/or its partners for dissolution of the partnership

• Such consumer has been irregular in fulfilling obligations towards margin or settlement dues

• Such a client has been declared insolvent, or any legal proceedings to declare his/her as insolvent have been initiated.

• Such clients have a tainted reputation, and any business relationship with such clients is likely to tarnish the reputation of ENRICH MONEY or may act as a detriment to Enrich Financial Solution Pvt Ltd. prospects.