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SOR

Smart Order Routing by Religare Capital Markets Limited

Introduction:
Religare Capital Markets Limited has developed an automated routing facility (RCML SOR facility) to help clients route their orders to a preferred destination of stock exchange, based on certain logic, more elaborately explained under “Best execution policy”.
This document describes the salient features of Smart Order Routing (hereinafter referred to as “SOR”) facility of Religare Capital Markets Ltd (hereinafter referred to as “RCML”) offered to its clients, as per the guidelines issued by the Securities and Exchange Board of India (hereinafter referred to as “SEBI”) and circulars, notices, clarifications and guidelines issued by National Stock Exchange of India and BSE Limited (collectively referred to as ‘stock exchanges’ and individually as ‘NSE’ or ‘BSE’ or stock exchange), from time to time.

2. Definitions:
a) Applicable Laws: Applicable laws means and includes all applicable laws, statutes, acts, rules and regulations, that are issued by SEBI, stock exchanges, and other regulatory and statutory authorities, that may be in force, from time to time, governing the transactions and operations of RCML under these terms and conditions and as a stock broker registered with SEBI and stock exchanges.
b) Smart Order Routing or SOR is defined by SEBI as Routing services that allow the brokers trading engines to systematically choose the execution destination based on factors viz., price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.
c) RCML SOR facility means the routing services offered by RCML under these terms and conditions, to facilitate and allow clients to route their orders to one or more routing destinations (stock exchanges), to transact in securities, based on the logic as explained more elaborately under “Best Execution Policy”

3. RCML SOR facility:
Execution of transactions using the SOR facility of RCML is different from the traditional way of executing the orders manually. When a client decides to place an order to be executed as an SOR order, the client or RCML SOR facility or a trader at RCML (in case of a manual order execution) can flag the order as an SOR order and the RCML SOR facility, using its in-built logic can work the order including the decision to choose the venue of execution, based on the parameters explained in this document.

4. Features of RCML SOR facility:
1. Eligibility for SOR
a) Clients:
RCML offers SOR facility to all of its clients who decide to avail of this facility. The primary objective of RCML SOR facility is to provide the best possible execution of trades, on a neutral basis, however it is left to the clients to use SOR or not.
b) Transaction eligible for SOR:
An order or transaction is eligible for SOR only if it satisfies the below conditions:
1) The client should not specify the venue or should specify venue as SOR
2) The instrument should be listed on both the exchanges
3) The specific client has consented to use SOR and activated for SOR
4) Normal or continuous session should be active in all the venues
If any one of the above conditions is not met by an order, then the same is not eligible for SOR facility.

2. Execution Venues:
RCML SOR facility would execute the trades only on recognized stock exchanges in India. Currently, this facility is available for NSE and BSE, in the cash market only. RCML will provide suitable notification to the clients, as and when additional venues are included in the RCML SOR facility.

3. Execution methodology
RCM SOR using Omnesys Nest SOR - Algo will route the order quantity mentioned in the Order by the Client to both e exchanges (EXCHANGE1 and EXCHANGE2) based on the available quantity and price. SOR will Place the order as an IOC or Limit order with Day validity on both the exchanges.
If the order price and order quantity are available in both the exchanges then the SOR will arrange the consolidated market depth (of EXCHANGE2 & EXCHANGE1) in the most favorable order of prices (ascending for buy and descending for sell) that are within the limit price and place orders accordingly at both the venues.
If the order price and order quantity are available in both the exchanges but are equal at both the venues then the SOR will send the order to the exchange in the ratio of the total traded quantity at both the exchanges for that day for the particular scrip.
If the price is available but the order quantity is not completely available at both the venues SOR will exhaust the quantity available in the market depth at both the exchanges and the remaining quantity will be placed based on the ratio of the total traded quantity at both the exchanges for that day for the particular scrip.
RCM will notify the clients before making any change in the best execution policy of RCM SOR facility.

5. Terms and Conditions for use of RCML SOR facility
RCML SOR facility has been built taking into consideration the Applicable Laws that are relevant. However, clients before using the SOR facility to execute transactions should carefully review and understand the applicable laws and these terms and conditions.
a) General Responsibilities:
• You understand and agree that the orders entered by you through the electronically facility offered by RCML will help you route the orders to a particular exchange or to a routing destination with or without the intervention of RCML.
• You are solely responsible for ensuring the accuracy and completeness of all orders that are routed through RCML SOR facility
• You shall verify and confirm that all orders put through RCML SOR facility are in order and further agree to notify RCML immediately of errors, if any observed.
• You agree that it will be your responsibility to ensure that your SOR order complies with your internal policies and guidelines as well as all applicable laws. RCML will not be responsible for your compliance with any limits imposed on trading activities by you or by any laws applicable on you
• You shall be responsible for paying applicable initial margins, withholding margins, special margins and such other margins as are considered necessary by RCML.
• You shall be responsible to comply with the settlement schedules / procedures of the relevant stock exchange where the trade is executed.
• RCML shall not be responsible for any administrative or operational duties or responsibilities imposed on you under any applicable Laws.
• You acknowledge and agree that your order (parent order) may be divided into one or more smaller orders (child orders) in the RCML SOR facility and each of them will be treated as a separate order for the purpose of execution, using RCML SOR facility.
b) Risks association with using SOR facility:
The following are the risks that RCML SOR facility may pose, in addition to the overall risks associated with executing transactions through electronic networks and trading systems.
1. Trading through RCML SOR facility may expose you to te risks of failure of systems or a component which may result in the facility not being available for a certain period of time. You should be aware that such failures may result in you not being able to have any access to the SOR faciity or may not be able to enter new orders or execute existing orders, or to modify or cancel orders that were previously entered. It may also be noted that systems or component failure may result in loss o orders and therefore, in your own interest, you should monitor the orders that you intended to execute using RCML SOR facility
2. RCML SOR facility has in-built Risk Management Systems (RMS) checks viz., credit limits, position limits or quantity limits, price range checks order value and all your orders go through the RMS checks. If any of your orders do not conform to RMS checks, your transaction will not be executed.
3. You agree and understand that RCML, to comply with its risk and credit requirements, may put electronic filters to your orders, due to which there is no assurance of execution of your orders or for the time of execution of order.
4. You understand and agree that the filters and RMS checks that RCML SOR facility has incorporated are solely to protect the interest of RCML and RCML does not have any responsibility to monitor and ensure your compliance with any limits imposed on your trading activities by you or on you by applicable laws.
5. You agree that you will not take any action that will cause you to violate any limits that may be imposed on your trading activities by RCML, from time to time including, without limitation to placing an order for execution of a transaction.
6. RCML, at its sole discretion, will be free to accept or reject any transaction that you seek to execute through the RCML SOR facility.
7. The high traffic, transmission problems and system capacity limitations may, among other things result in;
(i) delays in the execution of an order;
(ii) executions at prices different from quoted prices at the time the order was entered; or
(iii) inability to place an order.
The volatile, fast or unusual market conditions may also cause delay or interruptions in the execution of SOR orders.

In all above situations, RCML reserves the right to modify or suspend or terminate any or all features of the SOR facility.
c) Disclaimer from RCML:
By offering SOR facility, RCML is not responsible for executing the orders, pricing of orders, or for ensuring that the orders have been received or reviewed or completed, in any manner or form except as provided herein. Save to the extent that such function is determined by your acceptance to using RCML SOR facility that RCML may make it available to you.

RCML has the exclusive and sole responsibility of routing the orders to the routing destination and
you are solely responsible for all decisions in terms of routing destination selected by you to execute your orders

By agreeing to route your orders to a particular destination, it must be clearly understood that RCML does not recommend or endorse any such execution destination nor does it make any representation or warranties with respect thereto and shall have no liability for any such selection of destination whatsoever. RCML shall have no liability or responsibility for the execution of any orders entered through RCML SOR facility or for any failure thereof, or errors with respect to execution of any orders. RCML shall have no liability or responsibility for any reporting requirements arising on you in connection with use of RCML SOR facility.