Client Onboarding Policy (Trading & Depository Participant)

Document Control

Document title Client Onboarding Policy (Trading & Depository Participant)
Entity Choice Equity Broking Private Limited (CEBPL)
Policy owner Compliance, CEBPL
Version 2.0
Reviewed / approved by Board 22.04.2026 (previous review: 21.04.2025)
Effective date 01.05.2026
Regulatory basis SEBI (Stock Brokers) Regulations, 2026 (notified 07.01.2026); SEBI (Depositories and Participants) Regulations, 2018; SEBI Master Circular on KYC dated 12.10.2023; SEBI AML / CFT Master Circular dated 06.06.2024; SEBI MITC circular dated 13.11.2023 (effective for new clients 01.04.2024); SEBI nomination circular dated 10.01.2025; SEBI DDPI circular; PMLA, 2002 and PML Rules; NSE / BSE / MCX / NCDEX and NSDL / CDSL circulars, as applicable.
Next review due Annually, or earlier upon any SEBI / exchange circular affecting this policy

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, 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 Revise and Revamp Nomination Facilities dated January 10, 2025 (as amended);
  • 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.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.

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 (up to 10 nominees, with the percentage share for each) or an explicit opt-out is obtained, in accordance with the SEBI nomination circular dated January 10, 2025. Only the investor (not a PoA / DDPI holder) may make a nomination.

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, RDD, Tariff Sheet, the Most Important Terms and Conditions (MITC) and the Investor Charter — are shared with clients;
  • 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 client request or for regulatory / non-compliance reasons; and
  • Proper settlement of dues and transfer of securities (and return of client funds, securities and collaterals) is ensured on closure.

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.