MEMBER SUB-BROKER AGREEMENT-MCX

Transcription

1 MEMBER SUB-BROKER AGREEMENT-MCX This Agreement entered into this day of 20 at Ahmedabad between True Value Commodities Pvt. Ltd. Trading-cum-Clearing Member of Multi Commodity Exchange of India Limited (MCX) ordinarily carrying on broking activity in futures contracts in commodities in the name and style of True Value Commodities Pvt. Ltd. (hereinafter referred to as member ) From Sheraton, Opp. Ketav Petrol Pump, Polytechnic Road, Ambawadi, Ahmedabad and a Sub-Broker ordinarily carrying on/desiring to start business in futures trading in commodities in the name and style of having its corporate office at (hereinafter referred to as the Sub-Broker.) WHEREAS the said Member is a Member of MCX (hereinafter referred to as the Exchange ) and also holds a certificate of Membership, AND WHEREAS the Sub-Broker is affiliated to the Member Shri and is eligible for becoming a Sub- Broker, AND WHEREAS in terms of Rules and Bye laws and Business Rules of MCX, the Sub-Broker is required to enter into an agreement with the said Member specifying the scope of their authority & responsibility, in relation to the business of dealing in futures contracts in commodities between them. NOW THEREFORE this agreement witnessed as follows: 1. The Member hereby acknowledges and confirms that the Sub-Broker is affiliated to him and that the Sub- Broker shall within the scope of the authority given under these presents, be entitled to act as a Sub- Broker within the meaning and subject to the Rules, Bye-Laws and Business Rules as amended from time to time, between the said Member and the clients for assisting the latter in buying, selling or dealing in futures contracts in commodities through the said Member. 2. The Sub-Broker may conduct business on behalf of his client with the Member as may be mutually agreed upon and subject to such condition as may be agreed to mutually between the Member and the Sub-Broker. Such agreement shall not contravene any provisions of this agreement and said rules and regulations. 3. The Member agrees that he shall not, except with the previous consent of the Sub-Broker, commit on the latter s behalf transactions in commodity futures in excess of the amount mutually agreed upon in writing from time to time being the aggregate value of such transactions agreed to be transacted in any contract and the maximum outstanding position of a client will also be limited to such limits as may be specified by the Sub-Broker. 4. The Sub-Broker hereby declares that his present line of business is as detailed below and they have interest in the following business: 5. The Sub-Broker shall maintain separate books of accounts in respect of his dealings with each of affiliating Member, if he is doing business with more than one Member and under no circumstances, he shall mix the funds received from or payable to one Member with that of another Member. 6. The Member and the Sub-Broker agree that they shall abide by all the statutory responsibilities and obligations imposed on them by the said regulations and/or any other rules or regulations applicable to the Members and Sub-Brokers in general either framed by the Exchanges or FMC. 7. The Member and the Sub-Broker shall abide by the code of conduct as may be specified by the Exchange. X

2 8. The Member Can having regard to the size of the business handled on behalf of the Sub-Broker ask the Sub-Broker to deposit such amount as may be mutually agreed upon for securing Sub-Broker s obligations to his clients and to the member. The deposit of the Sub-Broker shell be utilized by the member only for discharging the liabilities of the Sub-Brokers. On termination of the agreement, deposit shall be refunded to the Sub-Broker. If the member wants to retain a part of the deposit to meet the anticipated future liabilities on account of past transactions of the Sub-Broker the same shall Be immediately transferred by the broker to the exchange by way of deposit, which will be held by the Exchange in trust on account of the sub broker. 9. The Sub-Broker and the member shall co-operate and help each other in solving issues relating to sales tax forms or declarations like IX C or F forms. 10. The said Member and Sub-Broker agree that each of them shall ensure due protection to the clients regarding their rights and neither of them shall jointly or severally do anything which is likely to harm the interest of clients with whom and for whom they may have had transactions in commodity futures. 11. It shall be the responsibility of the member to inform the Sub-Broker and keep him apprised about trading/ settlement cycles, delivery/payment schedules, any changes therein from time to time, and it shall be the responsibility in turn of the Sub-Broker to comply with such procedures of the said exchange of which the Member is a Member. 12. The Member shall maintain a separate record including accounts in respect of the dealings in commodities futures entered into on behalf of the Sub-Broker. The Sub-Broker if he holds or receives money on account of a client shall forthwith pay such money to current or deposit account at bank to be kept in the name of Sub-Broker in the title of which the word client shall appear (hereinafter referred to as client account ). The Sub-Broker may if he/it desires, keep one consolidated clients account for all the clients or account in name of each client as he thinks fit. If the Sub-Broker receives a cheque or draft representing in part money belonging to client, and in part money belonging to Sub-Broker, he shall pay the whole of such cheque or draft into the client account and effect subsequent transfer to his own account of such amount that rightly belongs to him. The Member and Sub-Broker shall reconcile their accounts at the end of each Quarter or earlier with reference to all the settlements during the quarter. 13. The Member shall issue consolidated instrument-wise contract notes to the Sub-Broker in respect of all the instruments traded on behalf of the latter showing execution price of transaction and brokerage separately. The Sub-Broker; in turn, shall issue split confirmation memos to each of his clients within 24 hours of receipt of contract note from the main Member, wherein Sub-Brokers registration number allotted by the Exchange, the name of the Member who has executed the order and Members id, the name of the Exchange, reference number of the consolidated contract notes of the Member, the rate at which the sale or purchase is made and the brokerage shall be shown separately. There shall be a clear mention on the face of the confirmation memo that disputes with the Sub-Broker shall be brought to the notice of main broker by the client within 6 months from the date of dispute. Commission if any charged by the Sub-Broker shall not exceed one and one-half of one percent of the value mentioned in the respective sale or purchase note. Also the Sum total of commission & Brokerage charged by the Sub- Broker and Broker shall not exceed the maximum brokerage as prescribed under the Business Rules of the Exchange. 14. The Member and the Sub-Broker hereby agree that they will assist and co-operate with each other in ensuring faster settlement of any arbitration proceedings arising out of the transactions entered into on behalf of the Sub-Broker and would accept arbitration awards in respect of the transactions entered into on his behalf. 15. The Member and the Sub-Broker agree that they shall mutually decide from time to time the volume of business which will be transacted during a settlement period by the Member with the Sub-Broker and if the Sub-Broker is dealing with more that one Member, then the agreed aggregate volume of business of the Sub-Broker including that with the other Member(s), shall also be informed to all the affiliating Members. 16. The Member and the Sub-Broker hereby mutually agrees that:- a. all transactions in commodity futures on behalf of the clients of the Sub-Broker shall be settled by delivery and/or payment or squaring off or settlement as per the Due Date Rate specified by the Exchange, between the contracting parties in accordance with the provisions and bye-laws and Business Rules of the said exchange and subject to the procedures for settlement of transactions laid down by the authorities of the said exchange from time to time. b. The Member and Sub-Broker shall not encourage sales/purchase with the object of generating brokerage/ commission.

3 X 17. If any dispute arises between the Member and Sub-Broker the same shall as far as possible be settled with the help of the officials of the said exchange and if no such settlement is possible the parties hereby agree to refer such dispute to arbitration in accordance with the rules, byelaws and Business Rules of the said exchange. The Member and the Sub-Broker hereby agree that they shall co-operate with exchange officials and provide all relevant documents in their possession so as to expedite the settlement through arbitration process. If any dispute arises between Sub-Broker and client the same shall be brought to the notice of main broker within 6 months from the date of dispute and same shall as far as possible be settled with the help of Member failing which it shall be brought to the notice of exchange officials for resolution. If the dispute persists, the same shall then be referred to the arbitration in accordance with the Rules, Bye-laws and Business Rules of the said exchange. 18. Either Party shall be entitled to terminate this agreement at will and without giving any reasons to the other party notice in writing of not less then six months at their respective addresses mentioned above. The above shall also be intimated to the Exchange. 19. This agreement shall forthwith terminate; i. if the for any reason ceases to be a member of the Exchange including cessation of membership by reason of the member s death, resignation or expulsion or if the certificate issued by the Exchange is cancelled or suspended. ii. Upon the demise/insolvency of the Sub-Broker or the cancellation or suspension of his / its Registration with the Exchange. iii. notwithstanding any such termination, all rights, liabilities and obligations of the parties arising out of or in respect of transactions entered into prior to the termination of this agreement shall continue to subsist and vest in/be binding on the respective parties or his/her /its respective heirs,executors,administrators,legal representatives or successors, as the case may be. 20. In addition to the above terms of agreement, the Member and the Sub-Broker specifically agree to the below mentioned terms and conditions for smoother operations and better clarification of individual roles, right and responsibilities i. Sub-Broker agrees that it will not request the Member to open an account for any prospective client until SUB-BROKER has in its possession all account documents which Infinity requires or may require by MCX or FMC. Without limiting the generality of the foregoing, with respect to every cash or futures segments account, we agree that: a. Sub-Broker will accurately complete a new account report, including all documentation necessary to comply with Member s Anti-Money Laundering Policies and Procedures. b. Sub-Broker will obtain and approve an executed Client Agreement with an acknowledgement of receipt of the Risk Disclosure Statement. It will also obtain any other documentation required by Member, exchange or FMC from time to time. c. Sub-Broker will promptly deliver the original new account documents as set forth to Member at its place of business or as otherwise directed. d. Sub-Broker will conduct credit investigations for all Clients and where available will arrange for Member to receive confirmation of such inquiries directly. Member will solely determine credit criteria for Clients transacting business with Member. e. Sub-Broker shall be responsible for all liabilities incurred in connection with investment advice rendered by it and its employees. Any liabilities arising from the exercise by Sub-Broker s officers or employees of discretionary authority over any Client s account shall be Sub-Broker s sole responsibility. ii.sub-broker further agrees that: a. Member reserves all rights to refuse to accept any account or any new order for the account for any reason and may terminate any account which it does not wish to carry for any reason as determined by Member; b. Member reserves the right to conduct its own credit inquiries on any Client introduced by Sub- Broker, although they will not be obligated to do so; and C) Member assumes no responsibility or liability for any Client s accounts if Sub-Broker fails to deliver promptly all necessary documents for such account. iii.sub-broker agrees to adhere to and abide by all upfront, maintenance and other margin requirements in place at the MCX where trades are cleared for clients of Member. Member reserves all rights in all cases to raise or lower the upfront margin, maintenance or other margin requirements so long as they are not below the minimum requirements of the appropriate Exchange or any regulatory body. ivẇhen an account fails to satisfy margin requirements, Member may proceed with the liquidation of the account and reserves the right to take any such remedial action as they may deem necessary, in their sole discretion, with or without prior notice to SUB-BROKER or Clients. Member agrees to provide SUB-BROKER and Client with subsequent notice of any such action.

4 X v.whenever Member notifies Sub-Broker of any margin calls, or other calls for funds, SUB-BROKER will take all necessary action to effect proper payment. Member reserves the right, at its discretion, to contact the Clients for margin funds and to take whatever other actions it deems appropriate. viṡub-broker agrees to indemnify and hold Member harmless from and against any and all losses, damages, claims, actions, judgments, liabilities or expenses, including attorneys fees and other legal expenses, which Member may sustain or incur arising from or connected with any property, cash, checks, drafts, notes and other instruments of exchange received by Member from SUB- BROKER or others for any Client s account which shall be claimed to be counterfeit, forged, spurious or invalid, or arising from or connected with any dishonest, fraudulent or criminal act of any person or persons connected with or associated with SUB-BROKER. This indemnity shall include losses resulting From trading, whether in the name of a genuine client, or in the name of a SUB-BROKER or in a fictitious account, or arising from or connected with any act of negligence or omission on the part of any person or persons connected with or associated with SUB-BROKER. vii.without limiting the generality of the foregoing, SUB-BROKER also agrees to indemnify and hold Member harmless for any losses, damages, claims, actions, judgments, liabilities or expenses, including attorneys fees and other legal expenses which Member may incur arising out of any act or omission of such SUB-BROKER, which is a violation of the Act, its rules and regulations there under, or any of the rules and regulations or policies & procedures of MCX or FMC, any statutes of the various States and/or territorial possessions of India, and any applicable laws of governments and any national exchange or other regulatory or self-regulatory bodies. viii. Commission amount to be paid by Member to the SUB-BROKER will be calculated as (Total brokerage during the previous month from SUB-BROKER s clients) (Member s share of brokerage) (Any due or not recovered amount from the SUB-BROKER or SUB-BROKER s clients) = (Commission passed on to the SUB-BROKER) ix. Member reserves the right to change commission arrangements with SUB-BROKER for any account at their discretion and will provide SUB-BROKER with timely notice of any such changes. At present the generalized Minimum Brokerage and the sharing of the Brokerage between the Member and the Sub-Broker is as stipulated in Schedule 1 attached herewith and forming part of this agreement. x.any client failing to make the payment in part or full on time will be charged a Penal Interest as per the company policy till the time client s security deposited assets or equities are liquidated in the market and or the full amount is recovered from him. xi. Sub-Broker agrees to deposit with Member an agreed upon amount to be held in an account in Sub-Broker s name as a Security Deposit. xii. Member shall, in its reasonable and sole discretion and without notice to SUB-BROKER, have a right to withhold and apply net remittances payable and such other assets or funds of SUB-BROKER in the possession, custody or control of Member or any of its affiliates, in whole or in part (in such order as Member shall elect), against any amount owing at any time to Member by SUB-BROKER, including but not limited to (i) debit balances in Client Accounts (ii) expenses paid or advanced by Member on behalf of SUB-BROKER, or (iv) indemnities of SUB-BROKER hereunder (collectively the Obligations ). Member agrees to promptly notify SUB-BROKER after the exercise by them of their right of set off hereunder, provided, however, that the failure to give such notice shall not affect their validity of such set off. xiii. Member shall not be responsible for any money or other securities paid or delivered by any client until such money or property are (1) paid or physically delivered to Member, or (2) received by and credited to a third party bank account for the benefit of the client or (3) received by and credited to a CM bank account for the benefit of the client. xiv. The SUB-BROKER shall not charge its client s brokerage less than the minimum stipulated and mutually agreed between the SUB-BROKER and the Member. It shall be the sole discretion of the Member to accept or reject any special proposal for lower than stipulated brokerage from the SUB- BROKER. 21. The Sub-Broker agrees that he/it shall enter into detail agreement with all his/its clients & maintain database of all such clients. IN WITNESS WHEREOF, the parties hereto have set their hands and signature on the day, month and year first above written Signed for and on behalf on Signed for and on behalf of Broker: True Value Commodities Pvt. Ltd. Sub-Broker:... By:... By:... Signature:... Signature: x... Title:... Title:... Witness:... Witness:...

5 Sign:... Sign:... Schedule - 1 (Forming Part of the agreement) Minimum Brokerage to be charged from Client : Intraday / Futures / Square up % Delivery % Minimum Brokerage to be charged from the Sub-Broker : Intraday / Futures / Square up % Delivery % Product Based Minimum Brokerage from Sub-Broker : Product Intraday / Futures Delivery Sharing of brokerage between Member & Sub-Broker: Share of Member Share of Sub-Broker Software & Terminal Charges :Rs. /month/year Note: All the above Brokerage shall be on net basis and all the other charges, as agreed upon including statutory charges, as applicable from time to time shall be charged separately. Other Remarks:

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