5paisa Authorised Person – Terms & Conditions
Compliance Dos and Don’ts for Authorised Persons (APs)
✅DOs:
1. Registration & Documentation:
➢ Before commencement of client registration and/or trading activities, ensure you are registered as an Authorised Person (AP) with the relevant Exchanges.
➢ Ensure that all relevant proofs and documents are submitted to the 5paisa Capital Limited Business Partners team for onward registration with the Exchanges.
2. Client Onboarding & Verification:
➢ Ensure every client completes registration with 5paisa Capital Limited before commencing trading operations. ➢ Exercise due diligence to prevent clients from furnishing fake, false, or unauthentic documents.
➢ Conduct background verification to ascertain the source of income and financial capability of the client.
➢ It is mandatory for APs to maintain a dedicated bank account exclusively for AP related transactions. This measure will help ensure transparency and avoid any queries or observations from the exchanges / SEBI.
3. Client Awareness and Education:
➢ Educate clients to verify their contract notes/confirmation memos daily to detect unauthorised trades.
➢ Obtain verifiable Pre-order instructions (via Voice Recording, Email, Instruction Slip, etc.) before placing any trade on behalf of a client.
4. Trading Terminal Management:
➢ Ensure trading terminals are located only at Exchange-approved locations and no relocation occurs without prior approval from the 5paisa Capital Limited/Exchange.
➢ Ensure that only approved and certified users operate the terminals.
5. Display & Disclosure Requirements:
➢ Display at all times:
➢ SEBI registration certificate of the Trading Member (TM).
➢ Registration Letter issued by the Exchange.
➢ Details of the Grievance Redressal Mechanism.
➢ Notice board at a prominent place in the office.
6. Grievance Handling:
➢ Maintain a Grievance Register detailing complaints received and their resolution dates.
➢ Maintain detailed records of all client grievances and produce them during inspections when required.
➢ Inform 5paisa Capital Limited of any disputes within 7 days of occurrence.
7. Cash Handling & Profit Sharing:
➢ Do not collect cash from clients for any reason.
➢ Do not enter into profit-sharing arrangements with clients.
8. Record Maintenance & Confidentiality:
➢ Maintain all branch/AP records and data securely and confidentially with proper backups.
9. Change of Location:
➢ In case of a change or shift of AP/Branch location:
➢ Notify all clients at least 30 days in advance.
➢ Display the updated SEBI registration certificate and notice board at the new location.
➢ Report the new address to the Exchange and deactivate the old location/terminals.
10. Regulatory Awareness:
➢ Familiarise yourself with all relevant SEBI and Stock Exchange circulars, rules, and regulations before carrying out any transactions or client-related activity.
❌DON’Ts:
1. Client Registration & Misrepresentation:
➢ Do not register clients without adequate due diligence and background verification.
➢ Do not make misleading advertisements, give assured or fixed return promises, or engage in fraudulent activities such as document forgery.
2. Unauthorised Promises & Trades:
➢ Do not enter into any agreement promising assured/fixed returns on investments.
➢ Do not place unauthorised trades without explicit client instructions.
3. Documents & Communication:
➢ Do not hand over bills, contract notes, or confirmations other than those issued by the Entity.
➢ If trading terminals remain inactive for six months, immediately inform 5paisa Capital Limited for deactivation.
4. Trading Terminals & Infrastructure:
➢ Do not extend terminals to unapproved locations or allow unregistered users to operate them.
➢ Do not use terminals in collaboration with other Trading Members/APs on the same Exchange.
5. Prohibited Activities:
➢ Do not engage in:
➢ Unauthorised collective investment or portfolio management schemes.
➢ Fund-based activities, deposit collection, chit funds, or market manipulation (e.g., price rigging, artificial volume creation).
➢ Any activity prohibited by SEBI or Stock Exchanges.
6. Naming & Representation:
➢ Do not use misleading names containing terms like “Portfolio/Wealth Management/Advisory” unless you hold a valid SEBI registration for those services.
7. Third Party Dealings:
➢ Do not deal with unregistered intermediaries or other trading members/APs for client or self-trading activities.
8. Deposits & Assured Returns:
➢ Do not accept deposits from clients or promise assured returns.
9. Advertisements & Promotions:
➢ Do not issue advertisements, pamphlets, or promotions in print or digital media to solicit business without prior Exchange approval through 5paisa Capital Limited.
⚠️Note: For any breach of the above Dos and Don’ts, the Company reserves the right to initiate disciplinary or legal action, including but not limited to:
➢ Suspension or termination of Authorised Person status,
➢ Legal proceedings or criminal complaints,
➢ Reporting to SEBI or Stock Exchanges.