Annexure B of SEBI Circular Are Required to Submit the Details in AI/ML Reporting Form in the Iiefs Within 15 Calendar Days of the Expiry of the Quarter

Contents 1 MEMBERSHIP ...... 1 Membership Categories ...... 1 1.2 Eligibility Criteria ...... 1 1.3 Fees, Deposits & Net worth Requirements ...... 1 1.4 Membership Forms ...... 2 1.5 Fixed Deposit Receipts (FDRs) towards Base Minimum Capital ...... 2 Nature of clients ...... 2 Know Your Client (KYC) Process and Use of Technology for KYC ...... 3 1.8 NISM certification for approved users and sales personnel ...... 3 1.9 Code of advertisement for stock brokers ...... 3 Net worth requirement ...... 4 1.11 System Audit reports (SAR) ...... 4 1.12 Internal Audit reports (IAR) ...... 5 1.13 Cyber Security and Cyber Resilience Audit of Trading Members ...... 5 1.14 Audited Annual Accounts & Auditor’s Report ...... 6 1.15 Segregated Nominee Account Structure ...... 6 1.16 Authorized Persons ...... 6 1.17 Membership of stock exchanges and clearing corporations in IFSC by foreign entities ...... 7 1.18 Payment of monthly IFSCA Turnover fees ...... 7 1.19 Policy of Annual Inspection of Members by Stock Exchanges/Clearing Corporations ...... 7 2 PRODUCTS ...... 9 3 MARKET OPERATIONS ...... 9 Trading Hours ...... 9 Trading Holidays ...... 9 Liquidity Enhancement Scheme (LES) ...... 10 3.3.1 Framework for Conflict of Interest under Liquidity Enhancement Scheme (LES) .... 10 3.3.2 Submission of Incentive Claims under Liquidity Enhancement Scheme (LES) ...... 10 Availability of Negative Price levels feature in Exchange Trading System ...... 10 Transaction Charges ...... 10 Calendar Spread Functionality ...... 11 Activation/De-activation of Trading User Ids ...... 11 3.7.1 Proprietary Trading ...... 11 3.7.2 Algorithmic trading ...... 11 3.7.3 Introduction of ALGO Approval Module in IIeFs ...... 12

3.7.4 Introduction of ALGO Surrender Module in IIeFs ...... 12 3.7.5 Introduction of Sponsored Market Access (SMA) Colocation Facility Service ...... 12 New Trading Applications and Facilities ...... 12 3.8.1 INX EBOSS Application for Members ...... 12 3.8.2 API Updates ...... 12 3.8.3 Market Data ...... 12 3.8.4 SFTP (Secured File Transfer Protocol) service for Members ...... 14 3.8.5 Customer Relationship System (CRS) application for Members ...... 14 3.8.6 Global Securities Market - Green Debt Reporting Platform ...... 14 Mock Trading Schedule ...... 14 Test Environment ...... 15 List of Files and formats ...... 15 Reference Circulars ...... 15 Server Non-Usage Charges ...... 15 Methodology for computation of Daily Settlement Price...... 15 Listing ...... 15 3.15.1 Issuance, listing and trading of debt securities in IFSC ...... 15 3.15.2 Listing of Global Depository Receipts on Global Securities Market (GSM) ...... 16 3.15.3 Introduction of Two Factor Authentication in Listing Center ...... 16 4 REGULATORY & COMPLIANCE ...... 16 4.1 Market Parameter ...... 16 4.1.1 Dynamic Price Band Relaxation ...... 16 4.1.2 PAN-based Self-trade Prevention Check ...... 17 4.1.3 Price Reasonability Check for Derivatives Segment ...... 17 4.1.4 Policy for Annulment of trades undertaken on India INX Trading platform ...... 17 4.2 Regulatory Disclosures ...... 17 4.2.1 Participant-wide Trading Volume/Open Interest Data ...... 18 4.2.2 Registration of terminals and location code details ...... 18 4.2.3 Reporting for Artificial Intelligence (AI) and Machine Learning (ML) applications and systems offered and used by market intermediaries ...... 18 4.3 Quarterly submission of Cyber Security & Cyber Resilience Framework ...... 18 4.4 Participation of Non – Resident Individuals in trading of derivatives contracts and debt instruments available at India INX...... 19 4.5 Framework for issue of Depository Receipts ...... 19 4.6 Clarification circulars regarding participation of Eligible Foreign Investors (EFIs) and Foreign Portfolio Investors (FPIs) in IFSC ...... 20 4.7 Participation of Foreign Portfolio Investors (FPIs) in Commodity Derivatives ...... 20

4.8 Clarification on participation of Eligible Foreign Investors (EFIs) in Commodity Derivatives .. 21 4.8.1 Operational Guidelines for FPIs & DDPs under SEBI (Foreign Portfolio Investors), Regulations 2019 and for Eligible Foreign Investors ...... 21 4.9 Operating Guidelines for Alternative Investment Funds (AIF) ...... 21 4.10 Unique Client Code ...... 22 4.11 Anti-Money Laundering and Combating Financing of Terrorism...... 22 4.12 Margin Information Report to Trading Members ...... 23 4.13 Reporting of Suspicious Transaction Reports ...... 23 4.14 Commodity Hedging...... 24 4.15 Cooling off for High Order to Trade Ratio (OTR) in Algorithmic Trading in INDIA INX ...... 24 4.16 Rationalization of imposition of fines for false reporting of margins by Trading Members .... 25 5 INFORMATION TECHNOLOGY ...... 25 Connectivity ...... 25 5.1.1 Colocation facility: ...... 25 5.1.2 Leased Line ...... 28 5.1.3 Internet ...... 29 Application Parameters ...... 30 5.2.1 Boltplus Configuration Parameters (Production, Disaster Recovery, Simulation) ... 30 5.2.2 Other Application Connection Details ...... 31 System requirement for trading application ...... 33

1 MEMBERSHIP

Exchange Members are the interface between the Exchange and its users. Members must meet requirements specified by Regulator and comply with a comprehensive set of regulatory requirements specified in the India INX By-Laws. Members are required to have an in-principal approval from the IFSCA. Following admission to India INX Membership, the Exchange submits the necessary documents to the IFSCA on the applicant’s behalf. Upon registration with IFSCA and commencement of business operations, members are required to meet various regulatory requirements on an ongoing basis.

Membership Categories The various membership categories on the exchange are:

Trading Member (TM) This category of membership entitles a member to execute trades on his own account as well as on account of his clients but, clearing and settlement of trades executed by the Trading Member would have to be done through a Clearing Member. Self Clearing Member (SCM) This category of membership entitles a member to execute trades and to clear and settle the trades executed on his own account as well as on account of his clients. Trading Cum Clearing Member This category of membership entitles a member to execute (TCM) trades on his own account as well as on account of his clients and to clear and settle trades executed by themselves as well as by other trading members who choose to use clearing services of the member. Professional Clearing Member A member only clears and settles trades of trading members (PCM) of the Exchange who choose to clear and settle their trades through the Member.

1.2 Eligibility Criteria As per SEBI circular on IFSC Guidelines dated March 27th, 2015 any recognised entity or entities desirous of operating in IFSC as an intermediary, may form a company to provide such financial services relating to securities market, as permitted by the Board.

Exchange Website link: https://www.indiainx.com/static/eligibilitycriteria.aspx

1.3 Fees, Deposits & Net worth Requirements Details are available in the link given below:

Exchange Website link: https://www.indiainx.com/static/feesdeposits_networth.aspx

1.4 Membership Forms Forms are available in the link given below:

Exchange Website link: https://www.indiainx.com/static/Membership_Forms_for_Banks.aspx

https://www.indiainx.com/static/Membership_Forms_for_Non_Banks.a spx

1.5 Fixed Deposit Receipts (FDRs) towards Base Minimum Capital Trading Members of the India INX can deposit Base Minimum Capital in the form of Cash/Fixed Deposit Receipts (FDRs)/ Bank Guarantee (BG) in USD.

The FDRs deposited should be issued in favour of “India International Exchange (IFSC) Ltd A/c.

The FDR needs to be deposited along with the letter from concerned bank addressed to India International Exchange (IFSC) Ltd in the below circular.

Trading members can also renew the FDR by submitting a renewal letter from the concerned bank as per the format prescribed.

Exchange Website link: https://www.indiainx.com/circulars/20170816-1/20170816-1.pdf

Nature of clients Any intermediary permitted by the Board for operating within the IFSC shall provide financial services to the following categories of clients: i. a person not resident in India; ii. a non-resident Indian; iii. a financial institution resident in India who is eligible under FEMA to invest funds offshore, to the extent of outward investment permitted; iv. a person resident in India who is eligible under FEMA, to invest funds offshore, to the extent allowed under the Liberalized Remittance Scheme of Reserve Bank of India, subject to a minimum investment as specified by the Board from time to time:

Provided that clients referred to in clauses (ii) to (iv) may be provided services, subject to guidelines of Reserve Bank of India.

Any intermediary permitted by the Board for operating within the IFSC shall, for the purpose of enforcing compliance with regulatory requirements, appoint a senior management person as “Designated Officer”.

In order to avail investment advisory or portfolio management services in IFSC, the client shall be:

i. a person resident outside India; ii. a non-resident Indian; iii. a financial institution resident in India who is eligible under FEMA to invest funds offshore, to the extent of outward investment permitted; iv. a person resident in India having a net worth of at least US Dollar one million during the preceding financial year who is eligible under FEMA to invest funds offshore, to the extent 2

allowed in the Liberalized Remittance Scheme of Reserve Bank of India: Provided that clients referred to in clauses (ii) to (iv) may be provided services, subject to guidelines of Reserve Bank of India.

Exchange Website link: https://www.indiainx.com/circulars/20170403-1/20170403-1.pdf

Know Your Client (KYC) Process and Use of Technology for KYC Reference is drawn to SEBI circular SEBI/HO/MIRSD/DOP/CIR/P/2020/73 dated April 24, 2020 to enable the Online KYC process for establishing account based relationship with the SEBI registered intermediary, Investor’s KYC can be completed through online / App based KYC, in-person verification through video, online submission of Officially Valid Document (OVD) / other documents under eSign.

Exchange Website link: https://www.indiainx.com/circulars/20200424-1/20200424-1.pdf

1.8 NISM certification for approved users and sales personnel Trading members of the Exchange are required to ensure that their approved users and sales personnel engaged or employed to operate in GIFT IFSC are required to obtain Combined Derivatives Certification (‘Common Derivatives’) conducted by NISM.

For person associated in compliance functions who will be a compliance officer or designated officer in GIFT IFSC Exchanges, NISM has also advised to obtain Securities Intermediaries and Compliance Officer ‘Non – Fund’ (Series III-A) certification.

For persons associated in operations and risk management functions in GIFT IFSC Exchanges, NISM has also advised to obtain Securities Operations and Risk Management (Series VII) certification.

Applicants for the trading membership of INDIA INX are required to submit Combined Derivatives Certification (‘Common Derivatives’) conducted by NISM at the time of submission of application for IFSCA registration.

Exchange Website link: https://www.indiainx.com/circulars/20171219-1/20171219-1.pdf

https://www.indiainx.com/circulars/20200225-4/20200225-4.pdf

https://www.indiainx.com/circulars/20200609-1/20200609-1.pdf

1.9 Code of advertisement for stock brokers SEBI has provided the guidelines in respect issuance of advertisement by stock brokers.

i. Stock Broker or its associates/group company cannot directly or indirectly, sponsor or be associated with any schemes/leagues/competition, etc. which may involve distribution of monies/prizes/gifts/medals, etc. ii. No reference to Stock Broker’s name, logo etc. can be made in any Schemes/leagues/competition, etc. iii. Stock Broker cannot share any information of their clients with a third party, even with the clients’ consent, in case any third party is involved in launching schemes/leagues/competition, etc. iv. Stock Broker cannot take any financial liability, including any contingent financial liability, on account of any schemes/leagues/competitions, etc. launched by a third party. 3

Exchange Website link: https://www.indiainx.com/circulars/20171013-1/20171013-1.pdf

Net worth requirement Trading Members of the Exchange are required to submit the Net worth Certificate & Computation of Net worth as per the Exchange requirement.

Networth requirement (as per LC Gupta format provided in Schedule VI of the SEBI (Stock broker and Sub broker) Regulations, 1992.

The minimum networth requirement for members is given below:

Trading Member (TM) (in Trading Cum Clearing Self Clearing Member (SCM) INR) Member (TCM) (in INR) (in INR)

1 crore 10 crore 5 crore

Exchange Website link: https://www.indiainx.com/circulars/20200416-1/20200416-1.pdf

https://www.indiainx.com/circulars/20201104-1/20201104-1.pdf

1.11 System Audit reports (SAR) The SEBI circular no. CIR/MRD/DMS/34/2013 dated November 6, 2013 and SEBI circular no. SEBI/HO/CDMRD/DEICE/CIR/P/2016/70 dated August 11, 2016 requires that trading members conduct system audits in accordance with the prescribed guidelines and detailed system audit framework enclosed in these circulars.

Accordingly, System Audit should be conducted with the following periodicity:

a) Annual system audit is prescribed for stock brokers who satisfy any of the following criteria. i. Stock Brokers who use [Computer-to-Computer Link (CTCL) or Intermediate Messaging Layer (IML) / Internet Based Trading (IBT)/ Direct Market Access (DMA)/ Securities Trading using Wireless Technology (STWT) / Smart Order Routing (SOR) and have presence in more than 10 locations or number of terminals are more than 50. ii. Stock Brokers who are depository participants or are involved in offering any other financial services.

b) Half yearly system audit has been prescribed for stock brokers who use Algorithmic Trading or provide their clients with the facility of Algorithmic Trading as per SEBI Circular CIR/MRD/16/2013 dated May 21, 2013.

c) For all other stock brokers, system audit shall be conducted once in two years.

The framework lists the audit process, auditor selection norms, Terms of Reference for different types of brokers, risk management systems along with the Executive Summary Report format.

It also requires that all major audit findings, specifically in critical areas, are rectified / complied in a time bound manner by the members failing which follow up inspection of may be taken up for necessary corrective steps / actions.

Exchange Website link: https://www.indiainx.com/circulars/20200420-1/20200420-1.pdf

https://www.indiainx.com/circulars/20201104-4/20201104-4.pdf

1.12 Internal Audit reports (IAR) Trading members / clearing members are required to carry out complete internal audit by independent qualified Chartered Accountants or Company Secretaries or Cost and Management Accountants who are in practice and who do not have any conflict of interest. All members are required to submit the IAR on a half yearly basis by the submission date prescribed by the exchange.

The purpose of the audit is to examine that the processes, procedures followed, and the operations carried out by the Trading Member/Clearing Member are as per the applicable Acts, Rules, Regulations, Bye-laws and Circulars prescribed by SEBI and the Stock Exchange.

Exchange Website link: https://www.indiainx.com/circulars/20200416-2/20200416-2.pdf

https://www.indiainx.com/circulars/20201104-5/20201104-5.pdf

1.13 Cyber Security and Cyber Resilience Audit of Trading Members Reference is drawn to SEBI circular no. (1) SEBI/HO/MIRSD/CIR/PB/2018/147 dated December 03, 2018 and (2) SEBI/HO/MIRSD/DOP/CIR/P/2019/109 dated October 15, 2019 along with Exchange circular no. 20191016-1 dated October 16, 2019 about ‘Cyber Security & Cyber Resilience framework for Stock Brokers / Depository Participants - Clarifications.’ As mentioned in the SEBI circular dated October 15, 2019, the periodicity of audit for the compliance with the provisions of Cyber Security and Cyber Resilience provisions for stock brokers, irrespective of number of terminals and location presence, shall be as under:

Type of Stock broker as specified in SEBI circular CIR/MRD/DMS/34/2013 dated Periodicity November 06, 2013 Type I Annual Type II Using ETI / IBT / DMA / STWT / SOR Annual Type III Using ALGO Half-yearly

Exchange Website link: https://www.indiainx.com/circulars/20200507-2/20200507-2.pdf

https://www.indiainx.com/circulars/20201204-1/20201204-1.pdf

1.14 Audited Annual Accounts & Auditor’s Report Trading Members of the Exchange are required to submit Audited Annual Accounts & Auditor’s Report (i.e. Complete Annual Report including Balance Sheet & Profit & Loss Account) for every financial year ended March 31.

As per SEBI Circular SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016, Stock brokers shall submit financial statements to Stock Exchanges in the same format as prescribed under Companies Act, 2013 irrespective of whether they fall under the purview of Companies Act, 2013 or not. The due date for submission of the aforesaid financial statements to Stock Exchanges shall be the same as prescribed under Companies Act, 2013 for submission to Registrar of Companies.

Exchange Website link: https://www.indiainx.com/circulars/20201104-3/20201104-3.pdf

1.15 Segregated Nominee Account Structure Segregated Nominee Account Structure permits the orders of foreign investors to be routed through eligible segregated nominee account providers (Providers), for trading on the stock exchanges in the IFSC. In order to further facilitate ease of market access for foreign investors, SEBI has issued a circular (SEBI/HO/MRD/DRMNP/CIR/P/2018/83) on 24 May, 2018 that permits segregated nominee account structure (SNA Structure) in the IFSC. While adhering to regulatory requirements at the client level, India INX has issued guidelines for Segregated Nominee Account Structure in below mentioned circular.

Refer INDIA INX Circular: https://www.indiainx.com/circulars/20180611-1/20180611-1.pdf

https://www.indiainx.com/circulars/20191023-1/20191023-1.pdf

https://www.indiainx.com/circulars/20200519-1/20200519-1.pdf

1.16 Authorized Persons Reference is drawn to IFSCA circular no. F.No. 68/IFSCA/MRD-AP/2020-21 dated October 14, 2020 along with the Exchange circular no. 20201014-1 dated October 14, 2020 on Market access through Authorized Persons. With a view to expand the depth and reach of the market for exchange traded securities in IFSC, stock brokers/trading members of India INX (herein after referred to as 'Exchange’) are now permitted to access investors through Authorized Persons based in foreign jurisdictions. AP should commence operation only after receipt of approval from the Exchange. Exchange Website link: https://www.indiainx.com/circulars/20201020-1/20201020-1.pdf

1.17 Membership of stock exchanges and clearing corporations in IFSC by foreign entities Reference is drawn to IFSCA circular no. F. No. 113/IFSCA/CMD-TMCM/2020-21 dated December 11, 2020, any entity from a foreign jurisdiction desirous of operating as a stock broker of a Stock Exchange in IFSC, may set up a branch office in IFSC to provide stock broking services. Exchange Website link: https://www.indiainx.com/circulars/20201211-2/20201211-2.pdf 1.18 Payment of monthly IFSCA Turnover fees SEBI (Stock Brokers) Regulations, 1992 amended on March 22, 2019 are applicable with effect from April 1, 2019. Reference is also drawn to Exchange circular ref. no. 20200602-01 dated June 02, 2020 about SEBI notification No. SEBI/LAD-NRO/GN/2020/011 dated May 08, 2020 regarding SEBI (Payment of Fees) (Amendment) Regulations, 2020 and the Amendments to Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 therein. Further, clause 6(2) of Part C of the SEBI (Stock Brokers and Sub – Brokers) (third amendment) Regulation, 2006 dated September 25, 2006 with respect to unpaid or belated payment of fees may also be noted.

Trading members of the Exchange are hereby informed that payment of IFSCA turnover fees for the month will be debited from their respective bank account by the 3rd working day of next month. Exchange Website link: https://www.indiainx.com/circulars/20201130-1/20201130-1.pdf

1.19 Policy of Annual Inspection of Members by Stock Exchanges/Clearing Corporations INDIA INX’s policy for annual inspection of its members is formulated on the lines of the policy of annual inspection of members prescribed by SEBI in consultation with the exchanges vide circular no. CIR/HO/MIRSD/MIRSD2/CIR/P/2017/73 dated July 30, 2017.

The important features of the policy are listed below for ready reference. Selection criteria for Annual Inspection of Members will be as follows:

a. Stock brokers servicing investors, getting disabled on account of funds shortages on more than 3 times in a month shall be inspected irrespective of the fact of when they were last inspected. b. Stock brokers servicing investors, having overnight disablement on account of margin shortage for more than 2 days shall be inspected irrespective of the fact of when they were last inspected. c. Top 25 stock brokers paying high and recurring penalties for non-reporting or short reporting of margin/Client Code modification/CTCL mismatch fines or any other similar high risk compliance issue shall be inspected irrespective of when they were last inspected. d. Top 25 stock brokers in terms of investor complaints and arbitration cases filed by investors shall be inspected irrespective of the fact of when they were last inspected. e. Stock brokers having adverse observations in the internal audit report on high risk issues like wrong reporting of margins, transfer of trades, pledging of client securities,

dealing with unregistered intermediaries etc., shall be inspected irrespective of the fact of when they were last inspected. f. Subsidiaries of Regional Stock Exchanges shall be inspected every year. g. Stock Exchange shall frame internal policy for selection of stock brokers for inspection based on inputs/alerts from Risk Based Supervision. h. Besides the above, the special purpose/limited inspections shall be carried out based on any triggers like patterns found during investor complaint resolution/Arbitration, complaints on specific malpractices of a broker or references from various authorities. The inspection shall be irrespective of the fact of when the last inspection was carried out. i. Apart from the above few stock brokers shall be selected by the Stock Exchanges on a random basis for inspection. j. Stock brokers who do not fall under any of the above category shall be inspected by the Stock Exchanges at least once in three years. k. Stock brokers selected on the above category shall be inspected for all segments and also for clearing activity if the stock broker is undertaking clearing for other stock brokers. l. Inspections of Professional Clearing Members shall be conducted by Clearing Corporations once in two years.

Clearing activity undertaken by stock brokers for other stock brokers shall be inspected by Clearing Corporations. Other activities of stock brokers shall be inspected by Stock Exchanges. If Stock Exchanges and Clearing Corporations so desire, they can conduct joint inspections of stock brokers. Where Clearing Corporation has not been set up, Stock Exchange shall inspect all activities of stock brokers including activity of clearing for other stock brokers.

The Stock Exchanges/Clearing Corporations are advised to continuously assess the risks posed by their members and review/revise the policy of annual inspection, as and when required, in consultation with SEBI.

The Stock Exchanges shall establish an information sharing mechanism with one another on the important outcome of inspection of members who hold multiple memberships of the exchanges in order to improve the effectiveness of supervision and shall also bring cases of repetitive and / or serious violations to the notice of SEBI.

Exchange Website link: https://www.indiainx.com/circulars/20170704-2/20170704-2.pdf

2 PRODUCTS

Exchange offers derivatives trading in various asset classes viz Index, Commodity, Single Stocks, Currency and Debt as given below:

Index Equity Commodity Currency Debt Derivatives Derivatives Derivatives Derivatives Precious Metals, Global Currency Foreign Currency Bond, Sensex Indian Single Base Metals & Derivatives & Masala Bonds & India 50 Stock Derivatives Energy Rupee Derivatives Sustainable Bonds

Details of products available for trading is given in link below:

INDIA INX Website: https://www.indiainx.com/static/productsnapshot.aspx

3 MARKET OPERATIONS

Trading Hours

The trading in India INX shall be conducted over a period of 22 hours. The trading shall commence early morning at 04:30:00 hrs. Indian Standard Time (IST) and shall continue late till 02:30:00 hrs. (IST) of the next day. Thus, the trading shall span across two calendar days and one such end to end trading cycle shall be designated as one single business day. Further, trading in each business day shall be divided in two trading sessions.

The below table provides an illustration of the trading timings and the business day concept:

Trading Calendar Date Time (IST) Business Date Session Start End Start End Session 1 January 01, 2021 January 01, 2021 04:30:00 hrs. 17:00:00 hrs. January 01, 2021 Session 2 January 01, 2021 January 02, 2021 17:00:01 hrs. 02:30:00 hrs.

• As mentioned in the above table, the trading for ‘Business Date’ of January 01, 2021 shall be conducted over 2 trading sessions. & span across two calendar days viz. January 01, 2021 and January 02, 2021. • The first trading session shall start at 04:30:00 hrs. in the morning and shall end at 17:00:00 hrs. in the evening of January 01, 2021. • The second session shall start at 17:00:01 hrs. in the evening of January 01, 2021 and end at 02:30:00 hrs. of January 02, 2021. • The ‘Business Date’ shall be provided to the Members through the file name of the contract master file.

Trading Holidays

The following days are notified as trading holidays for the calendar year 2021:

Sr. No Date Day Holiday Name 1 January 26,2021 Tuesday Republic Day 2 April 02, 2021 Friday Good Friday

For details, kindly refer to the circular issued by the Exchange as per link given https://www.indiainx.com/circulars/20201223-1/20201223-1.pdf

Liquidity Enhancement Scheme (LES)

The Exchange has introduced LES in the following products.

▪ INDIA50 Futures ▪ INDIA50 Options ▪ GOLD Futures

For details, kindly refer to the circular issued by the Exchange as per link given https://www.indiainx.com/circulars/20200918-1/20200918-1.pdf

3.3.1 Framework for Conflict of Interest under Liquidity Enhancement Scheme (LES)

In pursuance of para 7.2 of SEBI circular no. CIR/MRD/DP/14/2014 dated April 23, 2014 and exchange circular no. 20190528-1 dated May 28, 2019

Exchange Circular: Framework for Conflict of Interest under LES

3.3.2 Submission of Incentive Claims under Liquidity Enhancement Scheme (LES)

Vide circular no. 20171017-1 date October 17, 2017 LES was launched and the same has been extended/ amended from time to time.

Invoice for eligible LES incentive should be submitted to the Exchange within a period of six months from the end of month in which it is generated by participating Members.

Exchange Circular: https://www.indiainx.com/circulars/20191209-1/20191209-1.pdf

Availability of Negative Price levels feature in Exchange Trading System

In pursuance to below circular, Negative Price level feature is available in Exchange Trading System.

Exchange Circular : https://www.indiainx.com/circulars/20200428-1/20200428-1.pdf

https://www.indiainx.com/circulars/20200612-1/20200612-1.pdf

Transaction Charges

No Transaction charges shall be applicable till further notice.

Calendar Spread Functionality

Calendar Spread - This facility shall help in creating simultaneously two positions viz. one shall be in near month futures instrument and 2nd shall be in the far month futures instrument of same underlying.

The trading convention of Futures Calendar Spread orders in India INX segment is as follows: a. A Buy spread means, Buy in Near Month leg and Sell in Far Month leg. b. A Sell spread order means, Sell in Near Month leg and buy in Far Month leg.

Activation/De-activation of Trading User Ids

3.7.1 Proprietary Trading

As directed by SEBI, it is hereby notified that Trading Members are required to specify the nature of the order in terms of the order being placed is a Client order or it is on their OWN account at the time of order entry on the trading system.

In accordance with SEBI circular no. SEBI/MRD/SE/Cir-32/2003/27/08 dated August 27, 2003, Exchange is providing the facility of placing of orders on ‘proprietary account' through trading terminals.

Accordingly, it has been decided that:

• Facility of placing orders on own account through trading terminals is extended only at one location of the Members as specified / required by the Members.

• Trading terminals located at places other than the location specified shall have a facility to place orders only for and on behalf of a client by entering client code details as required / specified by the Exchange / SEBI.

• In case any Member requires the facility of using own account through trading terminals from more than one location within IFSC, such Member shall be required to submit an undertaking to the stock exchange stating the reason for using the own account at multiple locations within IFSC and the Exchange may, on case to case basis after due diligence, consider extending the facility of allowing use of own account from more than one location within IFSC.

3.7.2 Algorithmic trading

Exchange supports automated trading vide various SEBI and Exchange circulars. Details of forms to be submitted are given for Algorithmic trading in the link below: https://www.indiainx.com/static/trading_operations.aspx

Based on SEBI guidelines vide circular SEBI/HO/MRD/DP/CIR/P/2018/62 dated April 09, 2018, Algo ID must be tagged with every algorithm order as a unique identifier for each approved algorithm. For details, kindly refer to the circular issued by the Exchange as per link given https://www.indiainx.com/circulars/20190905-2/20190905-2.pdf https://www.indiainx.com/circulars/20190827-2/20190827-2.pdf

3.7.3 Introduction of ALGO Approval Module in IIeFs

Members of the Exchange are hereby informed that a new facility for Members to apply for ALGO ID through IIeFs has been introduced. Henceforth, Members are requested to apply ALGO ID through IIeFs only. kindly refer to the circular issued by the Exchange as per link given https://www.indiainx.com/circulars/20200130-2/20200130-2.pdf

3.7.4 Introduction of ALGO Surrender Module in IIeFs

A new facility for Members to surrender ALGO ID through IIeFs has been introduced. Henceforth, request for ALGO ID surrender shall be submitted by Members through IIeFs.

Exchange Circular : https://www.indiainx.com/circulars/20200820-3/20200820-3.pdf

3.7.5 Introduction of Sponsored Market Access (SMA) Colocation Facility Service

In pursuance to below circular, Sponsored Market Access (SMA) Colocation Facility Service has been introduced.

Exchange Circular : https://www.indiainx.com/circulars/20200722-1/20200722-1.pdf

New Trading Applications and Facilities 3.8.1 INX EBOSS Application for Members

Trading Members of the Exchange are hereby informed that Exchange is extending electronic based online Surveillance System application (EBOSS) to Member level. Members will be able to access the application via internet and view various reports and near real time alerts generated by the application.

Exchange Circular: 20190604-2. 3.8.2 API Updates

Trading Members and vendors using ETI APIs for connecting their trading application refer the circular no. 20190515-1 issued on May 15,2019 as per link given below: https://www.indiainx.com/circulars/20190515-1/20190515-1.pdf

3.8.3 Market Data

Exchange disseminates market data broadcast through various types of streams in to its ETIAPI users- • EOBI (Enhanced Order Book Interface) • EMDI (Enhanced Market Data Interface) • MDI (Market Data Interface) • NFCAST

Circular for Market data was issued on 1st July 2017, can be referred in link http://www.indiainx.com/circulars/20170701-1/20170701-1.pdf

3.8.4 SFTP (Secured File Transfer Protocol) service for Members

Exchange introduced a web based SFTP (Secured File Transfer Protocol) services for secured transfer of files in addition to existing Extranet Portal facility. For details, kindly refer to the circular issued by the Exchange as per link given https://www.indiainx.com/circulars/20200102-2/20200102-2.pdf

3.8.5 Customer Relationship System (CRS) application for Members

Exchange introduced ‘Customer Relationship System (CRS) application for Members through which Members can directly escalate all type of complaints to any department and real time tracking of all their escalated complaints. For details, kindly refer to the circular issued by the Exchange as per link given https://www.indiainx.com/circulars/20190614-1/20190614-1.pdf

3.8.6 Global Securities Market - Green Debt Reporting Platform

Exchange is introducing a new platform named “GSM-Green” to report trades in Green Debt Products. kindly refer to the circular issued by the Exchange as per link given https://www.indiainx.com/circulars/20190612-1/20190612-1.pdf

Mock Trading Schedule

Mock trading is conducted regularly by the Exchange on first Saturday of every month to test its trading systems and for Members to chart out their own testing schedule in line with the mock trading schedule. Mock trade timings and changes to the schedule, if any will be informed to the Members through separate notice. Members are requested to ensure active participation in the mock.

The mock trading schedule is given as below.

Sr. No. Dates of Mock Trading 1 January 09, 2021 2 February 06, 2021 3 March 06, 2021 4 April 10, 2021 5 May 08, 2021 6 June 05, 2021 7 July 03, 2021 8 August 07, 2021 9 September 04, 2021 10 October 09, 2021 11 November 13, 2021 12 December 04, 2021

Test Environment

Kindly refer below link for test environment setup of the Exchange. http://www.indiainx.com/nta.aspx

Kindly refer below link for forms & formats related to Test Environment Application Access. https://www.indiainx.com/static/trading_operations.aspx

List of Files and formats

Details of back office files and formats are available in the links provided below:

• Back office file format • Daily Market Consolidated Data Reference Circulars

List of circulars consolidate in the Master Circular

Date Circular No. Subject

January 09,2020 20200109-1 Master Circular - 2020

February 13, 2019 20190213-2 Master Circular - 2019

January 19,2018 20180119-1 Master Circular - 2018

Server Non-Usage Charges

In continuation to circular no. 20180725-1 dated July 25, 2018, Members are requested to note that the Exchange shall levy server non-usage charges of USD 350 p.m. w.e.f. April 01, 2019

Non-utilization charges for a month will be computed and levied within 7 working days of the next month.

Exchange Circular: Server Non-Usage Charges

Methodology for computation of Daily Settlement Price

Kindly refer India INX Circular for detail methodology for computation of daily settlement price https://www.indiainx.com/circulars/20190607-2/20190607-2.pdf

Listing 3.15.1 Issuance, listing and trading of debt securities in IFSC

SEBI has allowed issuance, listing and trading of debt securities on Exchanges in International Financial Services Centres (IFSC) vide circular no. SEBI/HO/MRD/DRMNP/CIR/P/2017/96 dated August 31, 2017. For detailed framework and guidelines on Issuance, listing and trading of debt securities refer India 15

INX Circular on Framework for Listing of Debt Securities on Global Securities Market (GSM) and Global Securities Market – Debt Trading Platform. 3.15.2 Listing of Global Depository Receipts on Global Securities Market (GSM)

IFSCA has allowed issuance, listing and trading of debt securities on Exchanges in International Financial Services Centres (IFSC) vide circular no F. No. 87/IFSCA/DRs/2020-21 dated October 28, 2020. For detailed Circular on Issuance, listing and trading of Global Depository Receipts refer India INX Circular on https://www.indiainx.com/circulars/20201109-1/20201109-1.pdf 3.15.3 Introduction of Two Factor Authentication in Listing Center

Participants and Members of the Exchange are hereby informed that to add another security layer to the login process Two Factor Authentication in Listing Center has been introduced. Henceforth, listing center Participants and Members must observe Two factor authentication for safer login process.

Exchange Circular: https://www.indiainx.com/circulars/20200521-3/20200521-3.pdf

4 REGULATORY & COMPLIANCE

4.1 Market Parameter 4.1.1 Dynamic Price Band Relaxation

The Exchange has implemented appropriate price bands as prescribed/approved by SEBI for scrips on which derivatives products are available or scrips included in indices on which derivatives products are available.

For such scrips, a mechanism of dynamic price bands (commonly known as dummy filters or operating range) which prevents acceptance of orders for execution that are placed beyond the price limits set by the Stock Exchanges has been provided as given below. Such dynamic price bands are relaxed by the Exchange as and when a market-wide trend is observed in either direction. (India INX Circular No. 20200608-1)

• For Index Futures: at 10% of the base price (refer SEBI Circular/PR link below for details) • For Futures on Individual Securities: at 10% of the base price (refer SEBI Circular link below for details) • For Commodity Futures: As per contract specifications for various commodities in INDIA INX Circular No. 20170412-1, 20171010-2 & 20200825-2 • For Currency Futures: As per contract specifications for various currencies in INDIA INX Circular 20170531-2 , 20200319-2 For all Options Contracts: The Exchange has a contract specific price band based on the delta of the options contract using underlying previous close price and volatility in Currency Derivative Segment. Intra-day relaxation of the price band is based on the market trend.

SEBI Circulars/PRs : SEBI/HO/CDMRD/DNPMP/CIP/P/2020/118 dated July 10, 2020,

SEBI/HO/MRD/DP/CIR/P/117 dated October 25, 2019, CIR/MRD/DP/34/2012 dated December 13, 2012 PR No. 18/2020 dated March 20, 2020, PR No.59/2020 dated November 25, 2020

4.1.2 PAN-based Self-trade Prevention Check Self-trade prevention check was introduced based on Permanent Account Number (PAN) of clients. Using the PAN details available in the Exchange records, the aforesaid check helps to prevent matching between a buy and a sell order of a client placed by different Members in the same order book.

4.1.3 Price Reasonability Check for Derivatives Segment Price reasonability check (PRC) functionality was introduced to measure the further strengthen the Exchange’s pre-trade risk management framework. In PRC functionality, each new (incoming) limit order price shall be validated with the Exchange defined Price Reasonability Range (PRR). PRR shall be dynamically computed and applied by the trading system using a real-time reference price. The PRC functionality is applicable for all futures and option contracts. It shall not be applicable for calendar spreads and paired option contracts.

Salient Features of Price Reasonability Check (PRC) functionality:

a) It is applicable to incoming limit orders. b) Price of incoming limit orders is checked with respect to PRR prevailing at that point of time. c) PRR is dynamically computed using a real-time reference price. The Reference price shall be based on Best Bid/Offer prices on each contract/security. d) Incoming orders outside of the PRR at that particular time shall be rejected. e) If best bid/offer price is not available, then the previous close price is applicable as the reference price. f) Trading system automatically switches, in real-time, between using the best bid/offer price and LTP (or previous close price) as the reference price to compute PRR, depending upon the order book situation.

4.1.4 Policy for Annulment of trades undertaken on India INX Trading platform The Exchange introduced Policy on Annulment of Trades and defined suitable criteria so as to discourage frivolous trade annulment requests referred to the Exchange by Trading Members. The framework for processing the trade annulment requests from trading Members for trades executed on the Exchange trading platform is provided in the circular as per below link.

Exchange Circular: Policy for Annulment of Trades

4.2 Regulatory Disclosures

The Exchange from time to time disseminates the data pertaining to the trading in the derivative segments for the information of the market.

4.2.1 Participant-wide Trading Volume/Open Interest Data

The data relating to Open Positions number of contracts and Open Position in terms of volume are updated on daily basis at End-of-day.

Exchange Circular: https://www.indiainx.com/markets/dailymarketdata.aspx

4.2.2 Registration of terminals and location code details

All Trading Members are required to ensure that the database of all trading terminals are complete and correct and the location details (16 digit location code, mode of connectivity, address of terminal, and user of terminal etc.) of all terminals are registered with the Exchange before placing the orders. Trading terminals / IML terminals allotted and particulars of which are not uploaded/wrongly uploaded as above shall be treated as unregistered terminals.

Exchange Circular: Registration of terminals and location code details

4.2.3 Reporting for Artificial Intelligence (AI) and Machine Learning (ML) applications and systems offered and used by market intermediaries

The SEBI circular no. SEBI/HO/MIRSD/DOS2/CIR/P/2019/10 dated January 4, 2019 require that all registered Stock Brokers / Depository Participant offering or using applications or systems as defined in the circular, should participate in the reporting process by completing the AI / ML reporting form.

Accordingly, Members who are offering or using applications or systems as defined in Annexure B of SEBI circular are required to submit the details in AI/ML Reporting Form in the IIeFS within 15 calendar days of the expiry of the quarter. Further Members who are not offering or using the applications or systems as defined in Annexure B are also required to submit the AI/ML Reporting Form by selecting the option as “No” in IIeFS. Members are not required to submit hard copy of the same.

In this regard, members are required to submit the report electronically in the ‘’ Artificial Intelligence (AI) and Machine Language” module of IIeFS (India INX Electronic Filing System) of the Exchange. The URL for IIeFS is https://iiefs.indiainx.com.

Exchange Circular: 20190213-1.

4.3 Quarterly submission of Cyber Security & Cyber Resilience Framework

Reference is drawn to Exchange circular no. 20191016-1, 20191016-3 and 20191118 dated October 16, 2019 and November 18, 2019 respectively also SEBI Circulars SE SEBI/HO/MIRSD/DOP/CIR/P/2019/109 dated October 15, 2019, SEBI/HO/MIRSD/CIR/PB/2018/147 dated December 03, 2018 and CIR/HO/MIRSD/DOS2/CIR/PB/2019/038 dated March 15, 2019 regarding prescribed framework for Cyber Security & Cyber Resilience for Stockbrokers.

Paragraph 52 of Annexure 1 of the SEBI circular dated December 03, 2018 specifies the following regarding sharing of information:

Quarterly reports containing information on cyber-attacks and threats experienced by Stock Brokers / Depository Participants and measures taken to mitigate vulnerabilities, threats and attacks including information on bugs / vulnerabilities / threats that may be useful for other Stock Brokers / Depository Participants should be submitted to Stock Exchanges / Depositories

Hereafter, it is mandatory for stock brokers to share quarterly reports containing information on cyber-attacks and threats experienced by Stock Brokers and measures taken to mitigate vulnerabilities, threats and attacks including information on bugs/vulnerabilities/threats.

Further, the report should be duly signed by the Designated Officer appointed in terms of para 6 of the said SEBI Circular dated December 03, 2018 and shall be submitted through IIeFS portal only.

Further, as an ongoing compliance requirement, the Designated Officer on receipt of any information with respect to the unusual activities and events as prescribed in para 8 of SEBI Circular dated December 03, 2018 shall inform the Exchange at email id [email protected] within 24 hours of receipt of such information.

4.4 Participation of Non – Resident Individuals in trading of derivatives contracts and debt instruments available at India INX.

Trading Members are requested to refer to SEBI (IFSC) Guidelines, 2015 issued on March 27, 2015 wherein clause (9) on nature of clients clarifies that:

(1) Any intermediary permitted by the Board for operating within the IFSC shall provide financial services to the following categories of clients:

(i) a person not resident in India;

(ii) a non-resident Indian;

(iii) a financial institution resident in India who is eligible under FEMA to invest funds offshore, to the extent of outward investment permitted;

(iv) a person resident in India who is eligible under FEMA, to invest funds offshore, to the extent allowed under the Liberalized Remittance Scheme of Reserve Bank of India, subject to a minimum investment as specified by the Board from time to time:

Provided that clients referred to in clauses (ii) to (iv) may be provided services, subject to guidelines of Reserve Bank of India.

Exchange Circular: 20190604-1

4.5 Framework for issue of Depository Receipts

Members of the Exchange may note that below mentioned circulars and notifications issued by Central Government, SEBI and IFSCA regarding Depository Receipts.

1. Depository Receipts Scheme, 2014.

2. Central Government Notification dated September 18, 2019.

3. Central Government Notification dated October 7, 2019.

4. SEBI has issued circulars no. SEBI/HO/MRD/DOP1/CIR/P/2019/106 dated October 10, SEBI/HO/MRD2/DCAP/CIR/P/2019/146 dated November 28, 2019 and SEBI/HO/MRD2/DCAP/CIR/P/2020/243 dated December 18, 2020 regarding Framework for issue of Depository Receipts.

5. IFSCA has issued circulars no. F.No.87/IFSCA/DRs/2020-21 dated October 28, 2020 regarding Issue of Depository Receipts.

Exchange Circulars. 20191010-02 , 20191205-1 , 20201028-1 , 20201109-1 and 20201219-1

4.6 Clarification circulars regarding participation of Eligible Foreign Investors (EFIs) and Foreign Portfolio Investors (FPIs) in IFSC

SEBI (International Financial Services Centre) Guidelines, 2015 read with SEBI circular SEBI/HO/CIR/P/2017/79 SEBI/HO/CIR/P/2017/79 dated July 11, 2017 prescribe that,

“In case of participation of an EFI, not registered with SEBI as an FPI, but desirous of operating in IFSC, a trading member of the recognized stock exchange in IFSC may carry out the due diligence on its own or it may rely upon the due diligence carried out by a bank, which is permitted by RBI to operate in IFSC, during the account opening process of an EFI.”

Accordingly, KYC uploaded on CKYC by a Bank, permitted by RBI to operate in IFSC and Trading Account opening form/consent for trading in India INX, and may be the base for trading of Eligible Foreign Investor, in INDIA INX.

Also, IMD/FPI&C/CIR/P/2019/124 dated November 05, 2019 prescribes also Guidelines for participation/functioning of Eligible Foreign Investors (EFIs) and FPIs in International Financial Services Centre (IFSC).

Eligible Foreign Investors if deemed as FIIs for transactions made on IFSC based stock exchanges

Exchange Circulars: Compliance , 20200318-1

4.7 Participation of Foreign Portfolio Investors (FPIs) in Commodity Derivatives

SEBI has permitted FPIs to participate in commodity derivatives contracts traded in Stock Exchanges in IFSC subject to following conditions prescribed in the SEBI Circular no. SEBI/HO/CDMRD/DMP/CIR/P/2017/106 dated September 26, 2017: -

• The participation would be limited to the derivatives contracts in non-agricultural commodities only. • Contracts would be cash settled on the settlement price determined on overseas Exchanges.

• All the transactions shall be denominated in foreign currency only.

Exchange Circular: Participation of Foreign Portfolio Investors (FPIs) in Commodity Derivatives in IFSC.

4.8 Clarification on participation of Eligible Foreign Investors (EFIs) in Commodity Derivatives

Members are requested to note circular no. SEBI/HO/MRD/DRMNP/CIR/P/2019/39 dated March 18, 2019 issued by the Securities Exchange Board of India about clarifications on participation of EFIs in Commodity Derivatives in IFSC.

Kindly refer to SEBI circular IMD/HO/FPIC/CIR/P/ 2017/003 dated January 04, 2017 wherein guidelines for participation/functioning of Eligible Foreign Investors (EFIs) and Foreign Portfolio Investors (FPIs) in International Financial Services Centre (IFSC) have been issued.

In this regard, it is clarified that the EFIs may participate in commodity derivatives contracts traded in Stock Exchanges in IFSC subject to the following conditions: -

• The participation would be limited to the derivatives contracts in non-agricultural commodities only, • Contracts would be cash settled on the settlement price determined on overseas Exchanges, and • All the transactions shall be denominated in foreign currency only.

Exchange Circular: 20190318-3

4.8.1 Operational Guidelines for FPIs & DDPs under SEBI (Foreign Portfolio Investors), Regulations 2019 and for Eligible Foreign Investors

All Member may kindly note SEBI Circular No. IMD/FPI&C/CIR/P/2019/124 dated November 05, 2019 on subject Operational Guidelines for FPIs & DDPs under SEBI (Foreign Portfolio Investors), Regulations 2019 and for Eligible Foreign Investors.

SEBI Circular: Operational Guidelines for FPIs & DDPs under SEBI (Foreign Portfolio Investors), Regulations 2019 and for Eligible Foreign Investors.

Exchange Circular : “Clarification on participation of Eligible Foreign Investors (EFIs) in Commodity Derivatives in IFSC”.

Operational guidelines: Operational guidelines for FPIs & DDPs and EFIS

4.9 Operating Guidelines for Alternative Investment Funds (AIF)

As per SEBI circular SEBI/HO/IMD/DF1/CIR/P/143/2018 International Financial Services Centre (IFSC), Gift City could emerge as the hotspot for private equity funds and venture capitalists with 21

the Securities and Exchange Board of India (SEBI) allowing alternative investment funds (AIFs) to operate from Gift City.

Exchange Circular: Operating Guidelines for Alternative Investment Funds (AIF) in International Financial Services Centre (IFSC)

4.10 Unique Client Code

Securities and Exchange Board of India (SEBI) vide its circular no. SMDRP/Policy/CIR-39/2001 dated July 18, 2001 made it mandatory for all stock brokers to use Unique Client Codes (UCC) for all the clients. Accordingly, all Members are required to allot a Unique Client Code to each of their clients, the said Client Codes are required to be uploaded along with the PAN details in the UCC system of

the Exchange prior to the execution of trades. As provided in SEBI (International Financial Services Centre) Guidelines, 2015 read with SEBI Circular IMD/HO/FPIC/CIR/P/2017/003 dated January 4, 2017, the following categories of clients are permitted in IFSC: i. Person not resident in India ii. Non-resident Indian iii. Financial Institution resident in India who is eligible under FEMA to invest funds offshore, to the extent of outward investment permitted. iv. Person resident in India who is eligible under FEMA, to invest funds offshore, to the extent allowed under the Liberalized Remittance Scheme of Reserve Bank of India, subject to a minimum investment as specified by SEBI, from time to time.

Further, services to clients referred to in clauses (ii) to (iv) are also subject to guidelines of Reserve Bank of India.

Trading Members may take note of India INX Circular no. 20200527-1 ,20200520-2 regarding allotment of Unique Client code (UCC) in INDIA INX.

Modification of Unique Client Code

Members are requested to take note that modifications of client codes are not allowed in non- institutional trades.

Exchange Circular: 20191029-3

4.11 Anti-Money Laundering and Combating Financing of Terrorism

The Prevention of Money Laundering Act, 2002 (PMLA) was brought into force with effect from 1st July 2005. As per the provisions of the PMLA, intermediary (including a stockbroker) registered under Section 12 of the Securities and Exchange Board of India Act, 1992 (SEBI Act) shall have to adhere to the client account opening procedures and maintain records of such transactions as prescribed by the PMLA and Rules notified thereunder. SEBI has issued a Master Circular No. SEBI/HO/MIRSD/DOP/CIR/P/2019/113 dated October 15, 2019. All Trading Members of India INX are required to ensure compliance with the requirements contained in this Master Circular.

Exchange Circular: 20191016-2

Further, SEBI has issued circular Ref no. SEBI/HO/MIRSD/DOP/CIR/P/2019/69 dated May 28, 2019 notifying modification made by Government in order dated August 27, 2009 (relating to the purpose of prevention of, and for coping with terrorist activities) by order dated March 14, 2019 for strict compliance.

Exchange Circular: 20190531-2

Further, SEBI has issued circular Ref no. SEBI/HO/MIRSD/DOP/CIR/P/2019/113 dated October 15, 2019 notifying Guidelines on Anti-Money Laundering (AML) Standards and Combating the Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries under the Prevention of Money Laundering Act, 2002 and Rules framed there under.

Exchange Circular: 20191016-2

4.12 Margin Information Report to Trading Members

A report “Margin Information Report to Trading Members” has been introduced by the Exchange for the benefit of the trading Members. Trading Members and third party trading application vendors need to take note of the above and make necessary changes to their trading application, as appropriate.

Exchange Circular: Margin Information Report to Trading Members

4.13 Reporting of Suspicious Transaction Reports

Trading Members are required, as part of PMLA compliance, to file Suspicious Transaction Reports (STRs) with Financial Intelligence Unit (FIU-IND) on a monthly basis. Further, trading Members are required to fill various details of Registration with FIU. The Members are required to Register the Entity with FIU-IND and also register a Principle Officer and Designated Director with FIU-IND.

Further, the Prevention of Money Laundering Act, 2002 (PMLA) and Master Circular of SEBI on AML/CFT dated December 31, 2010 require all intermediaries registered with SEBI to report suspicious transactions to the FIU-IND. Clause 13.1 of Master Circular of SEBI on SEBI/HO/MIRSD/DOP/CIR/P/2019/113 dated October 15, 2019 states the following:

“In terms of the PML Rules, intermediaries are required to report information relating to cash and suspicious transactions to the Director, Financial Intelligence Unit- India (FIU-IND) at the following address:

Director, FIU-IND, Financial Intelligence Unit- India, 6th Floor, Hotel Samrat, Chanakyapuri, New Delhi-110021. Website: http://fiuindia.gov.in

Exchange Circulars: Reporting of Suspicious Transaction Reports Suspicious Transaction Reports (STRs) filed with FIU-India Guidelines on AML standards and CFT/Obligations of Securities Market Intermediaries

4.14 Commodity Hedging

Reserve Bank of India’s (RBI) Master Direction on Risk Management and Inter Bank dealings allow Residents in India approved by RBI to hedge price risk of permitted commodities in the international Exchanges/markets. It is clarified that Exchanges established in International Financial Services Centre (IFSC) also qualify as an international commodity exchange/market for the purpose of Master Direction issued by RBI on this subject. Exchange Circular: Circular on Commodity Hedging in IFSC Exchanges

4.15 Cooling off for High Order to Trade Ratio (OTR) in Algorithmic Trading in INDIA INX

SEBI vide its Circulars No. CIR/MRD/DP/09/2012 & SEBI/HO/MRD/DP/CIR/P/2018/62 dated on March 30, 2012 and April 09, 2018 respectively, provides for Penalty for Order to Trade Ratio.

For the purpose of calculation of daily Order-to-Trade ratio, all algorithmic orders, i.e., order entry, order modifications and order cancellations shall be considered. It may further be noted that:

a) If the algorithmic orders entered within ± 0.75% of the last traded price (LTP) of the respective contract, such orders shall not be included in the calculation of the aforesaid Order-to-Trade ratio. b) All other types of algorithmic orders and all algorithmic order cancellation requests shall be included. c) Orders placed under the liquidity enhancement schemes shall also be brought under the OTR framework. However, where a trading member and /or client (s) of the trading member are registered as a market maker for one or more products, then such MM orders in respective products shall not be considered for the OTR computation.

In case the ratio is 500 or more than 500 during a trading day, the concerned Member shall not be permitted to place any orders in the derivatives segment of INDIA INX for the first 15 minutes on the next trading day as a cooling off action. However, the trading Member shall be permitted to enter transactions in risk reducing mode during such cooling off period. In order to discourage repetitive instances of high daily order-to-trade ratio, there will be an additional penalty in form of suspension of proprietary trading right of the trading Member for the first trading hour on the next trading day in case a trading Member is penalized for maintaining high daily order to trade ratio, provided penalty was imposed on the trading Member on more than ten occasions in the previous thirty trading days (on rolling basis).

Members may note that charges for High Order to Trade Ratio are mentioned below:

Daily ALGO Order to Trade Ratio Charges (per ALGO order) Up to 50 NIL 50 to 250 (on incremental basis) 01 Cents per 200 Orders 250 and above (on incremental basis) 02 Cents per 200 Orders

Exchange Circular: High Order to Trade (OTR) in Algorithmic trading 20200615-1

4.16 Rationalization of imposition of fines for false reporting of margins by Trading Members

SEBI vide its circular no. CIR/HO/MIRSD/DOP/CIR/P/2019/88, dated August 01, 2019, regarding “Rationalization of imposition of fines for false/incorrect reporting of margins or non-reporting of margins by Trading Member/Clearing Member in all segments”, had inter alia advised Stock Exchanges and clearing corporations, in consultation with one another, to devise a standard framework for imposition of fine on the trading Members / clearing Members for incorrect / false reporting and non – reporting of margin collected from the clients. The details of the same can be referenced from the below INDIA INX circulars.

Exchange Circular: https://www.indiainx.com/circulars/20191224-1/20191224-1.pdf

5 INFORMATION TECHNOLOGY

Connectivity

INDIA INX AND INDIA ICC Network has been designed with following broad goals: -

➢ High availability: The environment is required to run 24X7 with 22 hours of trading window. ➢ Low latency: Being international Exchange, all best practices necessary for providing lowest possible network latencies are considered. ➢ Scalability: Modular architecture for scaling without change in basic design

For Market participants, following connectivity options are available: -

5.1.1 Colocation facility:

1. Application for Colocation facility access

The Members need to login to online facility in INDIA INX IIEFS portal for the application of the colocation services provided by Exchange.

Refer to below link for IIEFS portal: https://iiefs.indiainx.com/

2. Hardware configuration & Rack space:

Sr. Description Configuration

1 Rack space 11 U Partitioned Rack space

2 x 14 Core Intel Processor, 128GB RAM, 2 x 1Gbps & 2 x 2 Server 10Gbps Network Port, Approximate 750 GB Disk capacity (RAID Group)

3 Solarflare Card 2 x 10 Gbps (If demanded)

3. Features of Colocation facilities a. Each participant will get 11U rack space (Quarter Rack) within INDIA INX COLO @GIFT City. Additional quarter can be allocated to Member with annual price of USD 3750 per annum. Each participant will have separate lock and key arrangement on rack partition door. b. The Member which has been recognized as Market Maker should be allocated maximum 4 quantity of servers. Rest all other category of Members should be allocated maximum 2 quantity of servers subject to availability of stock in hand. c. In case of additional server’s requirement by any of category Members, Member has to arrange the servers by their own. INDIA INX team will facilitate for first level of support. d. For the Members who requires dedicated full or half rack quarter, same will be charged. Details of applicable charges is mentioned in circular 20180216-1 e. Each participant server/switch will be equidistant from INDIA INX gateway servers using 10Gbps fibre drop. Charges of 10Gbps fibre drop will be as per circular 20190814-2 f. Participants availing their private lines through operators to their respective sub-rack will be provided cross connect connectivity on copper and multi-mode fibre media. Member need to apply in IIEFS portal for cross connect as per circular 20190924-1 g. There is a provision of Internet based VPN (Virtual Private Network) connectivity at INDIA INX end. Members who wish to avail Internet, VPN would require network device with IPSEC license and static IPV4 public IP at their respective offices to use this VPN. h. Member is recommended to put their equipment with management port functionality & dual power sources provisioning. All the racks are having provisioning of Dual UPS power source and DG backup will be provided for uninterrupted power. i. Provision is made to provide fair and equal opportunity of co-location services to each Member.

4. Readiness

The delivery time by Exchange will be 2 working days from the Member approved application in IIEFS. INDIA INX Team will extend support to Members for OS (operating systems) & drivers installation and

other helps. For smooth functionality of servers, Members are requested to use supported version of OS.

5. DC Access & Connectivity a. Due to security reasons, physical access to co-location facility will be restricted only to the initial set up and access for periodic or urgent maintenance if any would be only with prior permission from INDIA INX. b. Members may take one or more leased line to the colocation facility from any telecom service provider for the purpose of setting up or modifying parameters, trading related activities and hardware, software, network related access, software download/upload and monitoring and data downloads. c. As point to point links between Member’s server/rack space and their offices does not lie on the trading/data dissemination path of the Exchange, so they are not within the purview of the Exchange. Point to point links are procured by, paid for and maintained by the Members without Exchange intervention therefore INDIA INX shall not responsible for quality or latency or any other performance parameters of connectivity provided by point to point vendors to colocation trading Member. 6. Additional responsibility & Guidelines a. If Members want to deploy any hardware, software or any other facility not provided by Exchange then they have to arrange required facilities on their own and deploy at their dedicated racks located at INDIA INX colocation data centre on such terms and conditions as agreed between the concerned Member and Exchange. b. Members shall arrange all the necessary hardware and software required to utilize the said colocation services provided by Exchange. INDIA INX would not be responsible for insuring the Member assets at the co-location premises. c. Member need to arrange appropriate firewall devices for data/application security as well as OS level security to protect external virus/spam/malware attack. d. The Members are required to ensure compliance with requirements of the laws/regulations/requirements prescribed by IFSCA/SEBI/Exchange or any other relevant authority as in existence or as may be modified/amended from time to time while availing the facility and maintain the integrity of the securities market. e. Members shall be responsible to obtain necessary regulatory permission from authorities such as GIFT IFSC SEZ, Customs etc. as required to carry their equipment inside/outside from GIFT IFSC SEZ.

7. Other Terms & Conditions a. INDIA INX reserves the right to render certain Members/authorized vendor ineligible from further participation in the INDIA INX, if they fail to follow the policy or engage in activities that are detrimental to the development of the market. 27

b. INDIA INX will provide co-location facility on best efforts basis and does not solicit any particular vendor and any trading or other risks arising out of usage of the opted services are sole responsibility of Members of the Exchange. c. INDIA INX will not be responsible for any direct/indirect/consequential, harm/loss/damage of any kind for whatsoever reason including but not limited to power failure, air conditioning failure, system failure and loss of connectivity. d. INDIA INX shall not be liable for any stoppage in co-location facility owing to legal or regulatory requirement.

8. Discontinue / Termination

In case Member wants to discontinue the availed services, they are required to intimate exchange by sending an email to their respective relationship manager and Colocation team on [email protected]

5.1.2 Leased Line

Market participant office within GIFT area can avail 10 Mbps leased line facility for connecting to INDIA INX. Please refer the Exchange Circular number 20180813-3 for charges.

a. Connectivity provisioning at Market participant’s (MP) office is done based on MP’s requirements. The connectivity will be is provisioned only on MP’s name. Franchise names are not eligible to apply. The application form and its related undertaking are to be electronically filed using below URL https://iiefs.indiainx.com

b. INDIA INX will issue networking gear to participant’s office at the time of connectivity provisioning. This networking gear will be property of INDIA INX & and has to be surrendered at the time of connectivity cancellation. This gear will be in control of INDIA INX and Member is required to ensure that relevant site requirements are maintained at all the time for gear to function smoothly. c. The networking gear will be under comprehensive maintenance with INDIA INX assigned vendor. Routine faults/replacement will be done at no extra charge to Members. However, if the gear fails due to negligence on part of Member, INDIA INX reserves right to recover part or full cost from Member.

d. Member’s office will be assigned an IP subnet & Member can allocate IP address to their terminals within this provided subnet. The Member’s internal network should be very much segregated from INDIA INX assigned subnet. e. Connectivity charges are bundled for entire service which includes amortised capital cost component of network gear, link costs towards operator lease, maintenance cost of the network gear and provision of disaster recovery. Recovery of these charges are yearly in advance. The guiding principle in devising these charges is that the network will be operated on “Not for Profit” basis. For most of market participants, recovery is through internal billing.

f. Shifting of Leased lines between offices is subject to feasibility from the existing telecom service provider with One time cost USD 175 as per Exchange Circular 20180622-1.In case of non-feasibility from the existing provider, Member has to apply for new circuit in case any other telecom service provider is feasible. g. INDIA INX provided network equipment should be properly maintained in dust free environment with proper air conditioning and UPS power supply. The output voltages from UPS should be in range 220 V – 240 V with Neutral to Earth voltages less than 2 volts. h. Lock-in period for Leased line is of 1 year. Thereafter, proportionate refund from yearly charges with 1 months’ notice period shall be applicable. 5.1.3 Internet

INDIA INX also has applications hosted on web. To access these applications, market participant needs to have their respective internet link and application passwords. Email ID for application assistance is available on respective services URLs.

Application Parameters 5.2.1 Boltplus Configuration Parameters (Production, Disaster Recovery, Simulation) PRODUCTION NFCAST MDI RDI(Incremental) RDI(Snapshot) Connection Segment Gateways Service Service Service Service EMDI EOBI Gateway Service B Service B Service B

A A A A

10.253.253.6 TCP IP 10.253.253.6 to UDP 225.0.0.1 225.0.0.7 225.0.0.8 225.0.0.3 225.0.0.4 225.0.0.5 225.0.0.6 (CLICK HERE) (CLICK HERE) INDIA INX 10.253.253.7 16906 to Port 16908 16901 16907 16908 16903 16904 16905 16906 16920

DISASTER RECOVERY (DR) NFCAST MDI RDI(Incremental) RDI(Snapshot) Connection Segment Gateways Service Service Service Service EMDI EOBI Gateway Service B Service B Service B

A A A A

10.243.243.6

TCP (CLICK IP 10.243.243.6 to UDP 225.0.0.1 225.0.0.7 225.0.0.8 225.0.0.3 225.0.0.4 225.0.0.5 225.0.0.6 (CLICK HERE) HERE) INDIA INX 10.243.243.7 16906 to Port 16908 16901 16907 16908 16903 16904 16905 16906 16920

SIMULATION Connection Gateways NFCAST MDI RDI(Incremental) RDI(Snapshot) Segment EMDI EOBI

Gateway IPS Service A Service A Service B Service A Service B Service A Service B

(CLICK (CLICK

IP 10.255.254.6 10.255.254.6 226.1.0.131 226.1.0.136 226.1.0.137 226.1.0.132 226.1.0.133 226.1.0.134 226.1.0.135 TCP UDP HERE) HERE) INDIA INX 13406 to Port 13408 13431 13436 13437 13432 13433 13434 13435 13410

EMDI INDIAINX PRODUCTION & DR Incremental Snapshot Feed Name Service A Service B Service A Service B IP 225.0.0.9 225.0.0.10 225.0.0.11 225.0.0.12 Stream 1 Port 16909 16910 16911 16912

EOBI INDIAINX PRODUCTION & DR Incremental Snapshot Feed Name Service A Service B Service A Service B IP 225.0.0.41 225.0.0.42 225.0.0.43 225.0.0.44 Stream 1 Port 16941 16942 16943 16944

EMDI INDIAINX SIMULATION Incremental Snapshot Feed Name Service A Service B Service A Service B IP 226.1.0.139 226.1.0.140 226.1.0.141 226.1.0.142 Stream 1 Port 13439 13440 13441 13442

EOBI INDIAINX SIMULATION Incremental Snapshot Feed Name Service A Service B Service A Service B IP 226.1.0.155 226.1.0.156 226.1.0.157 226.1.0.158 Stream 1 Port 13455 13456 13457 13458

5.2.2 Other Application Connection Details

For peripheral applications, the URL’s for working over leased lines / internet are given in table below.

Production application URL details

Sr. No. APPLICATION CONNECTIVITY URL

Real Time Risk Leased Line http://10.1.150.1/stocks/jsp/rms/index.html Management 1 System Internet (RTRMS) https://rtrms.indiainx.com

Collateral and Internet https://class.indiainx.com/application/applogin/login.aspx 2 early pay – in (CLASS) Leased line https://10.1.150.4/application/applogin/login.aspx

Unique Client Internet https://ucc.indiainx.com/newucc/UCC_Login.aspx 3 Code (UCC) Leased Line https://10.1.150.7/newucc/UCC_Login.aspx

4 Extranet Internet https://member.indiainx.com/extranet_login.aspx

Leased Line https://10.1.150.5/extranet_login.aspx

BANK Internet https://member.indiainx.com/bankextranet 5 EXTRANET Leased Line https://10.1.150.5/bankextranet

Global 6 Securities Internet Market https://gsm.indiainx.com

Internet https://les.indiainx.com 7 LES Leased Line http://10.1.150.8:6080/stocks/jsp/LEIPS/index.html

Internet https://crs.indiainx.com/LoginCredential.aspx 8 CRS Leased Line https://10.1.150.11/LoginCredential.aspx

9 IIEFS Internet https://iiefs.indiainx.com

10 Listing Internet https://listing.indiainx.com

Internet https://boltplusuploads.indiainx.com 11 BOW Upload Leased Line http://10.1.150.10

The EXE based applications are available for download at URL:

APP NAME URL for EXE download

BOLTPLUS Front End http://www.indiainx.com/static/trading_application.aspx

BEST Front End http://www.indiainx.com/static/trading_application.aspx

Online Trade Dissemination http://www.indiainx.com/static/online_trade.aspx

DR application URL details:

Sr. No. APPLICATION CONNECTIVITY URL

Real Time Risk Leased Line http://10.1.160.1/stocks/jsp/rms/index.html 1 Management System (RTRMS) Internet https://rtrms1.indiainx.com

Collateral and Internet https://class1.indiainx.com/application/applogin/login.aspx 2 early pay – in (CLASS) Leased line https://10.1.160.4/application/applogin/login.aspx

Unique Client Internet http://ucc1.indiainx.com/newucc/newucc/UCC_Login.aspx 3 Code (UCC) Leased Line https://10.1.150.7/newucc/UCC_Login.aspx

Internet https://member1.indiainx.com/extranet_login.aspx 4 Extranet Leased Line https://10.1.160.5/extranet_login.aspx

Internet https://member1.indiainx.com/bankextranet 5 BANK EXTRANET LeasedLine https://10.1.160.5/bankextranet

Global 6 Securities Internet Market https://gsm1.indiainx.com

Internet https://les1.indiainx.com 7 LES Leased Line http://10.1.160.8:6080/stocks/jsp/LEIPS/index.html

Internet https://crs1.indiainx.com/LoginCredential.aspx 8 CRS Leased Line https://10.1.160.11/LoginCredential.aspx

9 IIEFS Internet https;//iiefs1.indiainx.com

10 Listing Internet https://listing1.indiainx.com

Internet https://boltplusuploads1.indiainx.com 11 BOW Upload Leased Line http://10.1.160.10

System requirement for trading application Minimum recommended configuration of trading terminals.

Suggested Configuration of BOLTPlus and BEST Front Description End

System Configuration Intel core i3 or equivalent configuration

Memory 8 GB RAM minimum

Network cards 1 Ethernet ports

Minimum internet 2 Mbps bandwidth

Free Disk space 100 GB minimum

Display Resolution 1024 X 768

OS Windows 10

Software .Net framework 4.0 or above

ETI and EMDI/EOBI is completely software and hardware independent. The Member can use his discretion to decide what their requirement is and plan the hardware configuration accordingly.