Risk Management Policy- Equity

This risk management policy document has been designed to understand the margin
policies of the company in the Equity trading segment. Risk Management is an integral
part of any organization. Various risks include credit Risk, Market Risk, default Risk,
liquidity Risk and other risk.

With a view to enhance customer knowledge and safeguard investor interests, Navia has
devised a comprehensive Risk Management & Surveillance (RMS) Policy to make sure
that customers are aware of the criteria based on which Navia monitors risk and initiates
actions to safeguard the interest.

Margins

Margin is the minimum amount required to buy / sell a equity in the future
segments of the equity segment. Margins are collected in advance. Various margins
applicable are:

1. Span margins (This varies from stock to stock. Use our margin calculator to find out the
margins for various stocks.)
2. Additional/ Exposure Margins.

Trading Platform and product codes

The trading software used for trading is NOW, i.e Neat on Web and different products
type for trading are ……

MIS – Intraday Margin – Span/2 (Square off)

NRML - Normal Product - 1 Time span.
CO - Cover Order - 3% of contract value

Product Span Exposure Margin

MIS 50% 50%
NRML 100% 100%
CO 3% contract value Stop loss price upto
3% compulsory

Intraday Margin scrip details

1. MIS – Equity - Exposure 10 times ( Nifty 50 & Midcap 50 scrip)

2. MIS – Futures - Span /2 (All futures contracts )
3. MIS – Options - Span/2 ( only on the Option selling )
4. MIS - currency - Span/2 ( All currency contracts)
Cover Order –

Cover Order provides intraday margin benefits with compulsory stop Loss order and
thereby maximum loss can be minimized.

1. Equity – CO – 3% of the contract value ( only for Nifty 50 Stocks)

2. Index Futures – 3% of the contract value ( Nifty and Bank Nifty )

Any order placed under MIS and CO , will automatically be squared off after 3.00 PM i.e
is within half an hour before the market closes or the Intraday MTM reaches 80%
whichever is earlier. Also the client can convert an MIS order to normal order (NRML) if
adequate margin is available in the trading account.

Intraday Margin Exceptions

Intraday Margin may be reduced on certain days due to any of the following reasons:
Exchange policy changes or regulation
Government policy changes or regulation
Stock broker internal policy changes
Excessive or abnormal market movement / turnover / volatility

RMS Selling/Square off criteria :

1. Mark- to Market (MTM) square off -

If the MTM reaches 80%, the RMS shall square off the position, including the all open
positions, and the client shall be in square off mode.

2. MIS -Auto Square off

RMS shall square off the positions under this product, if the Mark to Market Loss reaches
80% or at the set time i.e last half an hour session of the normal market trading time,
whichever is earlier.

3. CO – Auto Square off

It is auto square off product and the positions will be squared off automatically if the Stop
Loss triggers. Further if the stop loss is not triggered the system will automatically square
off the entire position after canceling the pending order , at the last half an hour session of
the market trading .

4. Margin Shortfall - Square off for the carry forward positions.

RMS, shall square off the positions, if margin shortfall reaches 140% for the carry forward
positions, and the client has not made the payment towards the margin shortfall.
Navia shall not be liable for any loss arise due to RMS selling on non -payment as well as
loss in case where RMS Selling may not be done as per the above square off policy, due to
any reason.

Navia reserves the right to change the above policies at any time in general or in particular
case within the Exchange guidelines

What are the Risk Parameters measured by the RMS for monitoring the Positions .

1. Navia shall square off all intraday positions within the last half an hour session of
the trading, if not squared off by the clients.
2. Navia shall not allow carrying forward the positions taken under the MIS intraday
product.
3. Navia shall not provide any intraday adhoc margin other than the credit balance
uploaded as base capital.
4. Clients are permitted to convert the product from MIS to NRML with available
margin.
5. Navia has limited the single order value to 2 Crores.
6. Navia shall limit and upload the base capital to 20 lakhs in client cash margin, even
though the clients’ are having more margin in the account.
7. Navia shall square off the House account position on 7th day, if payments are not
received or the credit coverage reaches below 110%, whichever is earlier.
8. Navia shall monitor the house account shares with Navia’s credit coverage policy
for holding in the house account.

Delayed pavment penalty charges

Navia shall debit the client with the delayed payment interest @24% (p.a.) for the short
margin on T+1 day onwards.

Exchange margin shortfall penalty

Exchange shall impose 1%or 5% (as per the number of days) on total margin shortfall as
penalty and this amount will be debited client trading account.

Other Surveillance Actions:

.
i) Regulatory conditions under which a client may not be allowed to take further position
or Navia may close the existing position of the client:

In case overall position in a contract has reached the Regulators prescribed Exchange
limit/ Market wide open interest limit / then client may not be allowed to take further
positions, till such time Regulators prescribed limit comes down to create a new position.
ii) PMLA Guidelines:

Client will be categorized as High, Medium and Low risk customer as per their risk
appetite and their current profile as mentioned in Know your client form (KYC). The same
will be reviewed at regular intervals.

iii) Exposure to client may also be governed by customer profiling mentioned above as
well as clients financial income made available to Navia from time to time.

iv) Suspending Client’s trading account

Navia may withhold the payout of client and suspend his trading account due to any
internal surveillance (if client indulges into manipulative trade practice) / regulatory
orders (debarring orders) / if the client is dormant (not traded > 6 months).

Communication
Client can view details of his ledger, margin, shortfall etc through his secured login portal
on Navia website and the client has to be aware about his position, outstanding balance
and Risk on the holding positions. Further, Navia is under no legal obligation to send any
separate communication other than the contract note and margin details and these shall be
communicated through SMS / Email id’s registered with Navia.

Disclaimer
Navia will have a discretion to alter/change any of Exposure limit, selling parameter
defined in this policy on the basis of prevailing market conditions with or without prior
intimation and can use their discretion to grant any kind of exemption/permission in case
they deem fit on case to case basis.

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