Brokerage / Securities Trading Client Agreement

The 'Brokerage / Securities Trading Client Agreement' is a document that establishes the terms and conditions to which the client will be subject upon opening a margin account with the broker for trading in securities. The importance of this document lies in its ability to clearly define the rights and obligations of both parties involved in the trading process.

 

The entire document consists of 21 clauses, each addressing a specific aspect of the agreement. Clause 1 sets out the purpose of the agreement and its applicability to the client's margin account. Clause 2 emphasizes that all transactions in securities will be subject to the relevant provisions of the constitution, rules, regulations, bye-laws, customs, and usages of the exchange in jurisdiction state. Clause 3 highlights the requirement to pay transaction levies imposed by the exchange. Clause 4 establishes that the rules of the exchange relating to trading and settlement are binding on both the broker and the client. Clause 5 informs the client about the limitations on claiming compensation in case of broker default. Clause 6 outlines the client's obligation to make payments of deposits or margins as required by the broker or exchange rules. Clause 7 grants the broker the right to close the margin account and dispose of securities in case of default by the client. Clause 8 states the client's indemnification responsibility for any breach of obligations. Clause 9 addresses the distribution of dividends or benefits accruing from securities not registered in the client's name. Clause 10 deals with the client's liability for losses suffered by the broker from securities not registered in the client's name. Clause 11 prohibits the broker from using the client's securities as collateral or lending them without prior written consent. Clause 12 allows the broker to disclose the client's account details to the exchange for investigation purposes. Clause 13 specifies the broker's responsibility for open market purchases in case of failure to deliver by the selling broker. Clause 14 establishes the client's obligation to pay interest on overdue balances. Clause 15 emphasizes the importance of accurate information provided by the client. Clause 16 authorizes the broker to conduct a credit check on the client. Clause 17 includes a risk disclosure statement regarding the fluctuation and potential loss of value of securities. Clause 18 highlights the risks associated with leaving securities in the custody of the broker. Clause 19 confirms the client's understanding and agreement to the terms and conditions of the agreement. Clause 20 states that only the parties to the agreement have the right to enforce its terms. Clause 21 includes a jurisdiction clause.

 

Each section of the document provides specific details related to the respective clause. The document concludes with signature blocks for both parties and witnesses.

 

How to use this document?

Step-by-step guidance for using the 'Brokerage / Securities Trading Client Agreement':

1. Read the entire agreement carefully to understand the terms and conditions that will apply to your margin account.

2. Ensure that you meet the requirements for opening a margin account with the broker, including providing accurate and complete information.

3. Familiarize yourself with the relevant provisions of the constitution, rules, regulations, bye-laws, customs, and usages of the exchange in jurisdiction state, as they will govern your transactions in securities.

4. Be aware of the transaction levies imposed by the exchange and understand that the broker is authorized to collect these levies.

5. Comply with the rules of the exchange, particularly those related to trading and settlement.

6. Understand the limitations on claiming compensation in case of broker default and assess the associated risks.

7. Make timely payments of deposits or margins as required by the broker or exchange rules to support your transactions.

8. Avoid defaulting on payments or failing to comply with any terms of the agreement to prevent the broker from closing your margin account without notice.

9. Indemnify the broker and its officers, employees, and agents for any losses, costs, claims, liabilities, or expenses resulting from your breach of obligations.

10. Keep track of any dividends, distributions, or benefits accruing from securities not registered in your name, as your account will be credited accordingly.

11. Be aware that you may be held liable for any losses suffered by the broker from securities not registered in your name.

12. Grant written consent before the broker can use your securities as collateral or lend them for any purpose.

13. Understand that the broker may disclose your account details to the exchange if requested for investigation purposes.

14. In case of failure to deliver securities by the selling broker, be prepared for the broker to obtain securities in the open market, with any price difference and expenses being your responsibility.

15. Ensure timely payment of interest on overdue balances as demanded by the broker.

16. Notify the broker of any changes in the information provided in the 'account opening information form'.

17. Authorize the broker to conduct a credit check to assess your financial situation and investment objectives.

18. Acknowledge the inherent risks associated with trading securities and leaving them in the custody of the broker.

19. Confirm your understanding of the agreement and its contents, and provide your consent to the terms and conditions.

20. Remember that only the parties to the agreement have the right to enforce its terms.

21. Keep a copy of the signed agreement for your records.