Surveillance Policy

Applicability

• This policy applies to stock broking operations of Stockology Securities Private Limited.
• The policy is approved by the Board of Directors.
• Framed in accordance with SEBI Circular No. SEBI/HO/ISD/ISD/CIR/P/2021/22 dated 01.03.2021 and NSE Circular No. NSE/SURV/48818 dated 01.07.2021.

Surveillance Framework

• NSE provides alerts based on predefined criteria. Alerts are reviewed and closed with reasons after due diligence, or escalated via Suspicious Transaction Report (STR) filing with FIU-India under PMLA rules.
• Internal surveillance alerts are also generated based on exchange guidance.

Alert Generation Criteria

1. Single-day trading by one client or connected group contributing more than 25% in one scrip or one derivative contract.
2. New/reactivated clients contributing more than 50% of total single-day volume in one scrip or derivative contract.
3. Frequent dealing in small quantities in a scrip.
4. Trading activity disproportionate to reported income or net worth.
5. Demographic change requests (address/email/mobile/bank etc.) submitted at least twice in a month.
6. Clients connected directly or indirectly with a listed company trading before dissemination of price-sensitive information.
7. Clients/groups contributing more than 20% volume in securities in information list or current watch list.
8. Clients/groups persistently earning/incurring high losses indicating possible profit/loss transfer intent.
9. Client holding more than 5% paid-up capital in a listed company, having pledged 100% of such holding for margin and showing significant trading in the same scrip.
10. Above-identified clients placing orders through dealing office far from registered KYC address.
11. Identification of multiple client codes trading from same IP address.
12. Clients connected through key KYC parameters.

Processing and Action Timelines

• Alerts from stock exchanges are reviewed on an ongoing basis and processed as early as possible, and in any case within 45 days from date of alert generation.
• Any delay in disposal must be recorded with reasons.
• Suspicious/manipulative activity is identified through order and trade monitoring.
• Where STR is reported to FIU-India, further action may include suspension of trading, reporting to Exchanges/SEBI or other authorities.
• Records are maintained as per PMLA (Maintenance of Records) Rules, 2005, Securities Contracts (Regulation) Rules, 1957 and SEBI/Exchange directions.

Governance and Audit

• Surveillance activities are conducted under supervision of the Compliance Officer and aligned with PMLA obligations.
• Quarterly MIS is submitted by Compliance Officer to the Board and Designated Director, including alerts generated, closed, actioned and pending with reasons and closure plan.
• Designated Director is responsible for surveillance activities carried out by the trading member.
• Surveillance policy is submitted to the internal auditor; implementation, effectiveness and generated alerts are reviewed.

Quarterly Reporting

• Quarterly approved alert status statement for stock broking operations is submitted to NSE within 15 days after quarter end.
• Report includes: opening pending alerts, new alerts, verified/closed alerts, alerts referred to Exchange and closing pending alerts.
• Details of alerts referred to Exchange and major surveillance actions (other than exchange referrals) are included.
• If there is nothing to report, a NIL report is filed within 15 days from quarter end.