Client Onboarding Policy (Trading & Depository Participant)

1. Introduction

This Client Onboarding Policy lays down a comprehensive, uniform and regulatory-compliant framework for onboarding clients for both Trading Member (TM) activities and Depository Participant (DP) services. It ensures adherence to the SEBI Act, 1992, the regulations and circulars issued by SEBI, the stock exchanges and the depositories (NSDL / CDSL), and the PMLA and rules framed thereunder, each as amended from time to time.

2. Purpose

The purpose of this policy is to:

Establish a standardised client onboarding process for TM and DP operations;
Ensure compliance with KYC, AML and CFT requirements;
Prevent identity theft, fraud and misuse of accounts; and
Protect the interests of clients and the organisation.

3. Applicability

This policy applies to:

All prospective and existing clients of the Trading Member and Depository Participant;
All categories of clients including Individuals, HUF, Corporates, LLPs, Firms, Trusts, Associations of Persons (AOPs), NRIs (as permitted) and other eligible entities; and
All employees, Authorised Persons (APs), branches and associates involved in client onboarding.

4. Regulatory Framework

Client onboarding is carried out in compliance with, inter alia:

SEBI (Stock Brokers) Regulations, 2026 (notified 7 January 2026, replacing the 1992 Regulations), including the Code of Conduct and the institutional mechanism for prevention, detection and reporting of fraud or market abuse;
SEBI (Depositories and Participants) Regulations, 2018;
SEBI Master Circular on KYC dated October 12, 2023 and the SEBI AML / CFT Master Circular dated June 6, 2024 (and the PMLA, 2002 and PML Rules);
SEBI circular on the Most Important Terms and Conditions (MITC) dated November 13, 2023 (effective for new clients from April 1, 2024);
SEBI circular on Modified Norms for Nomination in Demat Accounts and Mutual Fund Folios dated May 29, 2026 (effective September 1, 2026), which supersedes the earlier nomination circulars, including that dated January 10, 2025;
SEBI circular on the opening of a demat account in the name of an Association of Persons (AOP);
NSDL Circular No. NSDL/POLICY/2026/0062 dated April 24, 2026 on amendments to the Business Rules of NSDL regarding closure and shifting of demat accounts and opening of a demat account in the name of an AOP; and
CDSL Communiqué No. CDSL/OPS/DP/POLCY/2025/355 dated May 27, 2025 on the closure and shifting of demat accounts.
SEBI circular on Demat Debit and Pledge Instruction (DDPI) in lieu of Power of Attorney;
NSE / BSE / MCX / NCDEX circulars (as applicable); and NSDL / CDSL Bye-laws, Business Rules and Operating Instructions.

5. Client Onboarding Policy (COP)

CEBPL adopts a risk-based approach while accepting clients.

5.1 Eligible clients

Clients permitted under SEBI / exchange / depository regulations; and
Clients completing full KYC and due-diligence requirements.

5.2 Prohibited / restricted clients

Anonymous or fictitious clients;
Clients on sanctions lists, watchlists or barred by SEBI / the exchanges (including the UNSC, UAPA and WMD Act designated lists); and
Clients with an adverse regulatory or criminal background, where the risk is unacceptable.

6. Know Your Client (KYC) Requirements

6.1 Common KYC for TM & DP

Account Opening Form (AOF); PAN (mandatory); Proof of Identity (POI); Proof of Address (POA); bank account proof; mobile number and e-mail ID; FATCA / CRS declaration; and IPV / Video IPV.

KYC is carried out in accordance with the SEBI Master Circular on KYC dated October 12, 2023, and the KYC records are uploaded to the KYC Registration Agency (KRA) and the Central KYC Records Registry (CKYCR) to achieve Validated / Registered status. Mobile number and e-mail ID are captured and, where they belong to a person other than the client, a declaration of the relationship is obtained as required.

6A. Client-wise document requirements

6A.1 Individual (Resident)

PAN card; Aadhaar / Passport / Voter ID / Driving Licence (POI / POA); latest address proof (if not matching Aadhaar); cancelled cheque / bank statement / passbook; photograph; FATCA / CRS declaration; nomination / opt-out form.

6A.2 Hindu Undivided Family (HUF)

PAN of HUF; PAN of Karta; POI / POA of Karta; HUF declaration / deed; bank account proof in the name of the HUF; list of coparceners; FATCA / CRS declaration.

6A.3 Proprietorship Firm

PAN of Proprietor; POI / POA of Proprietor; proof of business (Shop Act / GST / MSME / bank certificate); bank account proof in the name of the proprietorship; FATCA / CRS declaration.

6A.4 Partnership Firm

PAN of Firm; Partnership Deed; registration certificate (if registered); PAN and KYC of all partners; authorisation letter for trading / demat operations; bank account proof in the name of the Firm; FATCA / CRS declaration.

6A.5 Limited Liability Partnership (LLP)

PAN of LLP; Certificate of Incorporation; LLP Agreement; PAN and KYC of designated partners; resolution authorising trading / demat operations; bank account proof in the name of the LLP; FATCA / CRS declaration.

6A.6 Company (Private / Public / Listed)

PAN of Company; Certificate of Incorporation; MOA / AOA; Board resolution authorising account opening and operations; list of directors and authorised signatories; PAN and KYC of directors / authorised signatories; bank account proof in the name of the Company; shareholding pattern; FATCA / CRS declaration; and
Beneficial Owner (BO) declaration identifying the natural person(s) holding a controlling ownership interest — following the revised thresholds under the SEBI AML / CFT Master Circular, more than 10% of shares / capital / profits for a company (and more than 10% for a partnership firm), with listed companies (and their majority-owned subsidiaries) exempt from BO identification.

6A.7 Trust

PAN of Trust; Trust Deed; registration certificate (if applicable); list of trustees and beneficiaries; PAN and KYC of trustees; resolution authorising trading / demat operations; bank account proof in the name of the Trust; BO declaration (author, trustee, protector and beneficiaries with 10% or more interest, and any person exercising ultimate effective control); FATCA / CRS declaration.

6A.8 Non-Resident Indian (NRI) (where permitted)

PAN card; Passport; overseas address proof; Indian address proof (if available); PIS / bank approval as applicable; NRE / NRO bank account proof; FATCA / CRS declaration.

6A.9 Association of Persons (AOP)

PAN of the AOP; the instrument or document constituting the AOP; resolution / authorisation for opening and operating the trading and demat account and for the authorised signatories; list of members; PAN and KYC of the authorised signatories; bank account proof in the name of the AOP; FATCA / CRS declaration.
Account in the name of the AOP itself: where a demat account is opened in the name of the AOP for holding the permitted securities, the account type is marked accordingly in the depository account opening form and the additional declarations prescribed by the depository are obtained, by which the AOP confirms that (i) it holds only such securities in dematerialised form as are permitted by the statutes governing its constitution, and (ii) the account shall not be used for subscribing to or holding any securities other than the permitted securities.
Account in the names of the constituent persons: where the account is opened in the names of the natural persons constituting the AOP (and likewise in the case of a partnership firm or an unregistered trust), the name and PAN of the AOP, firm or trust are recorded in the account opening form as required.

6.2 Additional requirements — Trading Member

Trading account opening form (segment-wise); Risk Disclosure Documents (RDD); Rights & Obligations; Tariff Sheet; client consent for electronic contract notes and communications; and financial proof in the case of the derivatives segment;
Most Important Terms and Conditions (MITC): the standard MITC is provided to every new client at onboarding and the client’s acknowledgement is obtained, in accordance with the SEBI MITC circular dated November 13, 2023 (mandatory for new clients from April 1, 2024).

6.3 Additional requirements — Depository Participant

Demat Account Opening Form; Beneficial Owner (BO) details; DDPI (in lieu of PoA), where opted; and
Nomination / opt-out: nomination, or an explicit opt-out in the prescribed declaration form, is obtained at account opening in accordance with the SEBI circular on Modified Norms for Nomination in Demat Accounts and Mutual Fund Folios dated May 29, 2026. With effect from September 1, 2026: nomination is mandatory for every single-held demat account and account opening is not completed unless the client either provides the nomination details or submits the prescribed opt-out declaration; nomination remains optional for jointly held accounts, and the consent of all joint holders is required for any nomination, change or cancellation, irrespective of the mode of operation; up to three nominees may be appointed; the percentage share of each nominee is optional and, where it is not specified, the holdings are apportioned equally among the nominees with any odd lot transferred to the first-named nominee; and the mandatory particulars are limited to the name of the nominee, the nature of the relationship with the client and, where the nominee is a minor, the date of birth.
Nomination — mode, authentication and acknowledgement: nomination and opt-out may be submitted online or in physical form in the prescribed formats. Online submissions are authenticated by digital signature certificate, by Aadhaar-based or other e-sign recognised under the Information Technology Act, 2000, or by two-factor authentication with a one-time password sent to the client’s registered mobile number and e-mail address. Physical forms signed by the client require no witness; two witnesses are obtained only where a thumb impression is affixed. An acknowledgement is issued to the client for every nomination and for every subsequent change or cancellation. Nomination instructions are accepted only from the client and not from a PoA or DDPI holder.
Nomination — continuing obligations: the periodic statement of account records either the name(s) of the nominee(s) or a Yes / No indicator, as elected by the client. For accounts without a nomination, including those where the client has opted out, reminders are sent by e-mail and SMS on a half-yearly basis and a nomination message is displayed on the client’s first log-in of each day to the web and mobile platforms.

7. Due Diligence & Risk Categorisation

Clients are categorised as Low, Medium or High risk on a risk-based approach;
Enhanced Due Diligence (EDD) is carried out for High-risk clients, including PEPs and beneficial-owner identification per the SEBI AML / CFT Master Circular; and
Periodic review and KYC updation is conducted as per regulatory timelines, with screening against the UNSC / UAPA / WMD Act designated lists.

8. In-Person Verification (IPV)

IPV is conducted by authorised officials or APs, or through approved Video IPV (VIPV) / digital KYC and Aadhaar-based e-KYC mechanisms permitted under the SEBI Master Circular on KYC; and
IPV records are preserved as per regulatory requirements.

9. Account Opening & Activation

Accounts are opened only after successful verification of documents and KYC status (including KRA / CKYC validation);
Trading and demat accounts are linked where opted by the client; and
The Unique Client Code (UCC) and BO ID are generated post approval, with the UCC uploaded to the exchanges.

10. Power of Attorney (PoA) & Demat Debit and Pledge Instruction (DDPI)

10.1 Power of Attorney (PoA)

PoA is optional and obtained only if required, used strictly for the specified purposes, and revocable by the client at any time. PoA shall not be made mandatory for account opening or trading.

10.2 Demat Debit and Pledge Instruction (DDPI)

DDPI is offered as an alternative to PoA, strictly in accordance with SEBI circulars, and its execution is voluntary and not mandatory for account opening;
DDPI is used only for the limited purposes permitted by SEBI — transfer of securities for settlement of trades executed by the client, and pledge / re-pledge of securities for margin requirements — and no other debit to the client’s demat account is carried out using DDPI;
DDPI is executed in the prescribed format with appropriate stamp duty, wherever applicable; clients are informed of the differences between PoA and DDPI at onboarding; a facility to revoke DDPI is provided and revocation is processed within the prescribed timelines; and proper records of DDPI execution, modification and revocation are maintained.

11. Client Communication & Disclosures

All mandatory disclosures, policies and agreements — including the Rights & Obligations of the Beneficial Owner and Depository Participant in the form currently prescribed by the depositories, RDD, Tariff Sheet, the Most Important Terms and Conditions (MITC) and the Investor Charter — are shared with clients, and the versions included in the account opening kit are refreshed whenever a prescribed form is amended;
Communication is through the registered e-mail / mobile or other approved modes, with the safeguards prescribed for electronic contract notes; and
Contract notes, statements and alerts are sent as per regulatory norms.

12. Record Maintenance

Client records are maintained in physical or electronic form, with data confidentiality and security ensured; and
Records are preserved for the period prescribed by SEBI / the exchanges / the depositories (including the eight-year retention applicable to DP records under the SEBI (Depositories and Participants) Regulations, 2018).

13. Ongoing Monitoring

Continuous monitoring of client transactions and periodic KYC review and risk reassessment;
Reporting of suspicious transactions to FIU-IND through the FINnet / FINgate portal; and
Operation of the institutional mechanism for the prevention, detection and reporting of fraud or market abuse, consistent with the SEBI (Stock Brokers) Regulations, 2026.

14. Closure of Accounts

Client accounts may be closed on the request of the client or for regulatory or non-compliance reasons. The closure and shifting of demat accounts is carried out in accordance with the Bye-laws, Business Rules and operating instructions of the depositories, as amended by NSDL Circular No. NSDL/POLICY/2026/0062 dated April 24, 2026.

Request and form: a request for closure is accepted in the form prescribed by the depository, signed by all holders, and specifies whether the balances are to be transferred to another account of the client or to any other account, or rematerialised. Where balances are to be transferred, the client master report of the target account or a duly completed delivery instruction slip signed by all holders is obtained, as applicable.

Timeline: where no dues are outstanding, the closure request is executed within two working days from the date of receipt of the complete and duly signed request.
Outstanding dues: where dues are outstanding at the time of the request, the client is informed of the dues within two working days of receipt of the request and is allowed a period not exceeding 30 calendar days to clear them. The request is processed within two working days from the date on which the dues are cleared. If the dues are not cleared within the period allowed, the request is rejected within two working days and the client is informed of the rejection together with the details of the outstanding dues.
Securities that cannot be transferred: where there are pending dematerialisation requests, or securities that cannot be transferred or rematerialised on account of lock-in, pledge, a frozen or suspended ISIN or any similar restriction, the closure request is executed in respect of the remaining securities. Where more than one year has elapsed between the date of receipt of the original closure request and the date on which the securities held back become capable of execution, a fresh closure request in the prescribed form is obtained from the client and the process is followed afresh.
Transfer and rematerialisation: on the instructions of the client, the transfer of security balances is initiated within two working days and rematerialisation is initiated within thirty days, in the manner specified by the depository from time to time.
Closure initiated by CEBPL: CEBPL may close the demat account of a beneficial owner after giving not less than thirty days’ written notice to the beneficial owner and to the depository.
Effect of closure: closure of an account does not affect the rights, liabilities and obligations of either the client or CEBPL, which continue to bind the parties until satisfactorily discharged. Proper settlement of dues and the return or transfer of client funds, securities and collateral is ensured on closure.
Records: logs and audit trails of closure requests processed and of all communications sent to the client are maintained.

15. Review & Amendment

This policy is reviewed at least annually and updated in line with regulatory changes. Any amendment is approved by the competent authority / Board.

16. Approval

This Client Onboarding Policy is approved by the Board of Directors and comes into force with effect from the date of approval recorded in the Document Control table.