RMS STANDS FOR RISK MANAGEMENT SYSTEM - TO MANAGE THE RISK OF THE COMPANY FROM THE
VOLATILITY OF THE MARKET.
RMS works on the following concepts
Cash
The clear balance available in the customer’s ledger account in our books.
Margin
The underlying stake provided by the customer in the form of cash, FDR and/or stock
to mitigate market (price) or settlement (auction) risk.
Exposure
The aggregate of the customer’s obligations arising out of buy + sell trades awaiting
settlement in the cash segment and profit/ loss amounts that are yet to be settled
on the closed positions.
Exposure multiple
The number of times that exposure is allowed on the underlying margin on the cash
segment would have to be made either on the availability of cash margin or on the
availability of the stocks (which are to be sold) in our margin account, by executing
a transfer before any order is initiated.
Stock qualifying for margin in cash segment transactions
Securities in the approved list of Kalpataru.
Total Deposit
The aggregate of client deposit available with us in the form of cash, shares (after
applicable hair cut) and FDR.
NATURE OF CUSTOMER TRANSACTIONS
Intraday - Cash segment
The amounts of purchase (or sale) in a scrip on any trading day that is reversed
by the end of the day by making a contra sale (or purchase) of the exact same quantity,
thereby nullifying the original position.
Delivery Trades
The net purchase or sale of a scrip in a client account that is settled by way of
a delivery on T+2(or as per settlement schedule). Delivery in respect of sale transactions
in the cash segment has to be settled by the client by tendering securities in demat
form before the pay-in deadline. Else the client faces the risk of auction.
Sell against Buying
A purchase order executed on the Exchange today and the (undelivered) purchased
stock sold in its entirety on the next trading day. In this case the first transaction
would be settled on T+2 while the sale would be settled on the third business day
after the purchase transaction.
Note
Kalpataru Multiplier Ltd. will not be responsible for any Short payout of security
from exchange.
MANAGEMENT OF RISK
We have margin based automated RMS system. Total deposits of the clients are uploaded
in the system and client may take exposure on the basis of margin applicable for
respective security as per VAR based margining system of the stock exchange and
/ or margin defined by RMS based on their Risk perception. Client may take benefit
of “credit for sale” i.e, benefit of share held as margin by selling the same by
selecting delivery option through order entry window on the trading platform, the
value of share sold will be added with the value of deposit and on the basis of
that client may take fresh exposure.
In case of exposure taken on the basis of shares margin the payment is required
to be made before the exchange pay in date otherwise it will be liable to square
off after the pay in time or any time due to shortage of margin.
For Example
Client XYZ trade in Capital Market Segment and having