SCHEDULE II - Code of Conduct - International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2025

SCHEDULE II CODE OF CONDUCT Part A - Code of Conduct - All capital market intermediaries (as applicable) 1. A CMI shall make all efforts to protect the interest of investors and render the best possible advice to the clients having regard to the needs of the clients, environment and its own professional skills. 2. A CMI shall in the conduct of its business, observe high standards of integrity and fairness and fulfil its obligations in a prompt, ethical and professional manner. 3. A CMI shall at all times exercise due diligence, ensure proper care and exercise independent professional judgment. 4. A CMI shall not indulge in manipulative, fraudulent or deceptive transactions or schemes or spread rumours with a view to distorting market equilibrium or making personal gains. 5. A CMI shall not create false market either singly or in collusion with other intermediaries or the issuer in a manner that is detrimental to the interests of investors, or which leads to interference with the fair and smooth functioning of the market. 6. A CMI shall endeavour to ensure that inquires and grievances of the investors are dealt with in a timely and appropriate manner. 7. A CMI shall not make any exaggerated statement either oral or in written form to the client about its capability, qualification and achievement in regard to services rendered to the client. 8. A CMI shall maintain confidentiality with respect to the information about its clients, except where such disclosures are required to be made in compliance with any law for the time being in force. 9. A CMI shall avoid conflict of interest and make adequate disclosure of its possible conflict of interest and duties and shall put in place a mechanism to resolve any conflict of interest situation. 10. A CMI shall not indulge in any unfair competition, which is likely to harm the interests of other capital market intermediaries and investors. 11. A CMI shall not discriminate amongst its clients, save and except on ethical and commercial considerations. 12. A CMI shall ensure that any change in registration status/any penal action taken by Authority or any material change in financials which may adversely affect the interests of clients/investors is promptly informed to the clients. 13. A CMI shall inform the Authority promptly about any action initiated against it in respect of material breach or non-compliance of any law, regulations and direction issued by the Authority or any other regulatory body. 14. A CMI shall ensure that it and any of its employees shall not render, directly or indirectly any investment advice about any security in the publicly accessible media, unless a disclosure of its interest in the said security has been made while rendering such advice. 15. A CMI shall ensure that it or any of its principal officer, directors, or employees having power of management shall not indulge in insider trading. 16. A CMI shall have and employ effectively appropriate resources and procedures which are needed for the efficient performance of its business activities. 17. A CMI shall have internal control procedures and financial and operational capabilities adequate enough to protect the clients and investors from financial loss arising from theft, fraud, omissions and professional misconduct. 18. A CMI shall have an internal policy for outsourcing of its activities from outside of IFSC and the CMI shall ensure compliance with the policy at all times. 19. A CMI shall develop its own internal code of conduct for governing its internal operations and conduct of its employees. 20. A CMI shall ensure that the compliance officer has adequate freedom and power for effective discharge of his duties. 21. A CMI shall ensure that any person it employs or appoints is a fit and proper person and otherwise qualified to act in the capacity so employed or appointed. 22. A CMI shall not be a party to or instrumental for: (a) creation of false market; (b) price rigging or manipulation; (c) passing of unpublished price sensitive information to any other intermediary or any person, in respect of any securities which are listed and proposed to be listed in any stock exchange. 23. The senior management of a CMI shall bear primary responsibility for ensuring the maintenance of appropriate standards of conduct and adherence to proper procedures by the intermediary. 24. A CMI shall not make untrue statement or suppress any material fact in any documents, reports or information furnished to the Authority. 25. A CMI shall not make a recommendation to any client or investor who may be expected to rely thereon to acquire, dispose of or retain any securities unless he has reasonable grounds to believe that the recommendation is suitable. Part B In addition to compliance with the code of conduct as specified in Part A of this Schedule, the capital market intermediaries shall abide by the following code of conduct: A. Broker dealers / Clearing Members 1. A broker dealer shall abide by all the provisions of the Act and the rules, regulations and byelaws issued by the Government of India, the Authority and the recognised stock exchange from time to time as may be applicable. 2. A clearing member shall abide by all the provisions of the Act and the rules, regulations and bye-laws issued by the Government of India, the Authority and the recognised clearing corporation from time to time as may be applicable. 3. A broker dealer shall not involve itself in excessive speculative business in the market beyond reasonable levels not commensurate with its financial soundness. 4. A broker dealer shall faithfully execute the orders for buying and selling of securities at the best available price and not refuse to deal with a small investor merely on the ground of the volume of business involved. 5. A broker dealer shall promptly inform its client about the execution or non-execution of an order, and make prompt payment in respect of securities sold and arrange for prompt delivery of securities purchased by its clients. 6. A broker dealer shall issue without delay to its client a contract note for all transactions in the form specified by the recognised stock exchange. 7. A broker dealer shall not encourage sales or purchases of securities with the sole object of generating brokerage or commission. 8. A broker dealer shall not furnish false or misleading quotations or give any other false or misleading advice or information to the clients with a view of inducing them to do business in particular securities and enabling itself to earn brokerage or commission thereby. 9. A broker dealer shall not deal or transact business knowingly, directly or indirectly or execute an order for a client who has failed to carry out its commitments in relation to securities with another broker dealer. 10. A broker dealer shall not resort to unfair means of inducing clients from other broker dealers. B. Credit rating agencies 1. A registered credit rating agency shall at all times exercise due diligence, ensure proper care and exercise independent professional judgment in order to achieve and maintain objectivity and independence in the rating process. 2. A registered credit rating agency shall maintain an arm s length relationship between the credit rating activity and its other activities. 3. A registered credit rating agency shall have a reasonable and adequate basis for performing rating evaluations, with the support of appropriate and in-depth rating researches. It shall also maintain records to support its decisions. 4. A registered credit rating agency shall have in place a rating process that reflects consistent and international rating standards. 5. A registered credit rating agency shall disclose its rating methodology to clients, users and the public. 6. A registered credit rating agency shall not indulge in any unfair competition. 7. A registered credit rating agency shall keep track of all important changes relating to its client companies and shall develop efficient and responsive systems to yield timely and accurate ratings. Further a credit rating agency shall also monitor closely all relevant factors that might affect the creditworthiness of the issuers. 8. A registered credit rating agency shall, wherever necessary, disclose to its clients, possible sources of conflict of duties and interests, which could impair their ability to make fair, objective and unbiased ratings. Further, a registered credit rating agency shall ensure that no conflict of interest exists between any member of the rating committee participating in the rating analysis, and that of its clients. 9. A registered credit rating agency shall ensure that there is no misuse of any privileged information including prior knowledge of rating decisions or changes. 10. A registered credit rating agency shall develop its own internal code of conduct for governing its internal operations and laying down standards of appropriate conduct for its employees and officers in the carrying out of their duties within the credit rating agency and as a part of the industry. C. Custodians 1. A custodian shall be prompt in distributing dividends, interest or any such accruals of income received or collected by it on behalf of its clients on the securities held in custody. 2. A custodian shall be continuously accountable for the movement of securities or financial products in and out of the custody account, deposit, and withdrawal of cash from the client s account and shall provide complete audit trail, whenever called for by the client or the Authority. 3. A custodian shall establish and maintain adequate infrastructural facility to be able to discharge custodial services to the satisfaction of clients, and the operating procedures and systems of the custodian shall be well documented and backed by operations manuals. 4. A custodian shall take precautions necessary to ensure that continuity in record keeping is not lost or destroyed and that sufficient back up of records is available. 5. A custodian shall create and maintain the records of securities held in custody in such manner that the tracing of securities or obtaining duplicate title documents is facilitated, in the event of loss of original records for any reason. 6. A custodian shall extend to other custodial entities, depositories and clearing organizations all such cooperation that is necessary for the conduct of business in the areas of inter custodial settlements, transfer of securities and transfer of funds. 7. A custodian shall ensure that an arm s length relationship is maintained, both in terms of staff and systems, from its other businesses. 8. A custodian shall exercise due diligence in safe-keeping and administration of the assets of its clients. D. Debenture trustees 1. A registered debenture trustee shall ensure that adequate disclosures are made to the debenture holders, in a comprehensible and timely manner so as to enable them to make a balanced and informed decision. 2. A registered debenture trustee shall take all reasonable steps to establish the true and full identity of each of its clients, and of each client s financial situation and maintain record of the same. 3. A registered debenture trustee shall share information available with it regarding client companies with credit rating agencies, wherever required. 4. A registered debenture trustee shall make reasonable efforts to avoid misrepresentation and ensure that the information provided to the debenture holders is not misleading. E. Depository Participants 1. A depository participant shall not increase charges/fees for the services rendered without proper advance notice of at least seven (7) days to the beneficial owners. 2. A depository participant shall be prompt and diligent in opening of a beneficial owner account, dispatch of the dematerialisation request form, rematerialisation request form and execution of debit instruction slip and in all the other activities undertaken by them on behalf of the beneficial owners. 3. A depository participant shall take adequate and necessary steps to ensure that continuity in data and record keeping is maintained and that the data or records are not lost or destroyed. It shall also ensure that for electronic records and data, up-to-date back up is always available with it. 4. A depository participant shall ensure that it has satisfactory internal control procedures in place as well as adequate financial and operational capabilities which can be reasonably expected to take care of any losses arising due to theft, fraud and other dishonest acts, professional misconduct or omissions. F. Distributors 1. A registered distributor shall avoid malpractices, such as mis-selling of capital market products and services, and shall consider clients interest and suitability to their financial needs. 2. When dealing with clients other than sophisticated investors, a registered distributor shall undertake due diligence of capital market products and services being distributed to them, and also assess the suitability of product / service to the investors. For this purpose, a distributor shall seek information from such clients about their financial status, investment experience, investment objectives, etc. to be in a better position to offer them such capital market products and services which are suitable to their risk profile. 3. A registered distributor shall act in the best interests of the clients and the integrity of the market. A distributor shall inform the client if the capital market product or service is not deemed suitable for them. 4. A registered distributor shall be fully conversant with the terms of the private placement memorandum, disclosure document and all other relevant agreements / documents. 5. Wherever the client is a sophisticated investor, a registered distributor shall obtain a declaration to the effect that the investor understands the risks associated to the capital market product or service being distributed. 6. A registered distributor shall disclose all material information to its prospective clients, including but not limited to its business, disciplinary history, terms and conditions of distribution services, conflict of interest, affiliations with other intermediaries and any other material information. 7. A registered distributor shall urge its clients to go through the private placement memorandum, disclosure document and other applicable capital market product or service related documents, as the case may be, and agreement to be entered with the client and the regulated financial entities before making the final decision. 8. A registered distributor shall disclose all material information regarding the capital market products and services being distributed to its clients, including related party transactions and self-positions. If requested by a client, the distributor shall disclose the amount of direct and indirect remuneration and the basis of such remuneration it receives as a result of rendering distributing services to that client and whether there is any relation between the distributor and the entity offering the capital market product or service. 9. A registered distributor shall assist its clients in completing KYC and other related procedures and assist in compliance with relevant laws relating to, inter alia, AML and CFT to the extent applicable. 10. A registered distributor shall abstain from tampering with the application form and other documents submitted by the client, including inserting, deleting, or changing any information in the application form or any other document provided by the client. 11. A registered distributor shall provide to its clients full and latest information about the capital market products and services offered by the regulated financial entities and shall clearly highlight the assumptions made in performance calculations, risk assessments, performance projections etc. 12. A registered distributor shall abstain from giving any assurance or cause any misrepresentation to its clients with respect to returns or risk characteristics of a capital market product or service. 13. A registered distributor shall abstain from attracting clients through offer of rebate, kickback, gifts, etc. 14. A registered distributor shall maintain necessary infrastructure to provide support to its clients and regulated financial entities, so as to be able to satisfactorily discharge its responsibilities as per the mutually agreed terms. 15. A registered distributor shall ensure clear segregation of its proprietary investments and those carried out as part of distribution activities. If allowed to facilitate clients investments through omnibus structure, it shall ensure compliance with all applicable norms. 16. A registered distributor shall maintain adequate records in relation to its clients, whether in physical or digital form including correspondence with the clients on particular capital market product or service suitability and consent/dissent of the clients, wherever applicable. 17. A registered distributor shall ensure that all client related statutory communications as well as such other reports as mutually agreed are reliably and timely sent to its clients. 18. A registered distributor shall take all reasonable steps to avoid conflicts of interest (whether actual or perceived) and develop appropriate policies and procedures to identify, manage, monitor and, where applicable, disclose, those conflicts of interest in order to prevent them from adversely affecting the interests of the clients. 19. In order to avoid conflict of interest arising due to multiple activities, a registered distributor shall ensure segregation of the activities and proper disclosures about segregation to the clients. 20. A registered distributor shall maintain and protect confidentiality of its clients details, deals and transactions, investment goals which it comes to know in the course of business relationship. 21. A registered distributor shall have a robust complaint redressal mechanism and an escalation matrix. It shall endeavour to resolve all grievances / complaints arising out of its distribution activities in a time bound manner. 22. A registered distributor shall abstain from encouraging over transacting and churning of portfolio of the clients to earn higher remuneration. 23. When distributing various capital market products and services, a registered distributor shall ensure that clients interest are paramount and that earning extra remuneration should never form the basis for distributing any product or service to its clients. 24. A registered distributor shall not indulge in any manipulative, fraudulent or deceptive practices. 25. A registered distributor shall hold valid registration with the IFSCA at all times, if applicable, and shall comply with all applicable laws, code of conduct and norms related to qualifications and experiences of its principal officer and other employees. Advertisement Code for Distributors 26. Advertisements shall be accurate, true, fair, clear, complete, unambiguous and concise. 27. Advertisements shall not contain statements which are false, misleading, biased or deceptive, based on assumption/projections and shall not contain any testimonials or any ranking based on any criteria. 28. Advertisements shall not be so designed as likely to be misunderstood or likely to disguise the significance of any statement. Advertisements shall not contain statements which directly or by implication or by omission may mislead the client. 29. Advertisements shall not carry any slogan that is exaggerated or unwarranted or slogan that is inconsistent with or unrelated to the nature and risk and return profile of the capital market product or service. 30. Advertisements shall not be so framed as to exploit the lack of experience or knowledge of the clients. Extensive use of technical or legal terminology or complex language and the inclusion of excessive details which may detract the clients should be avoided. 31. Advertisements shall contain information which is timely and consistent with the disclosures made in the private placement memorandum, disclosure document or the basic document, by whatever name called, which is created by the issuer / service provider and explains the characteristics of the capital market product or service. G. Investment Advisers 1. An investment adviser shall seek from its clients, information about their financial situation, investment experience and investment objectives relevant to the services to be provided and maintain confidentiality of such information. 2. An investment adviser shall make adequate disclosures of relevant material information while dealing with its clients. 3. An investment Adviser shall ensure that fees charged to the clients is fair and reasonable. H. Investment Bankers 1. An investment banker shall ensure that adequate disclosures are made to the investors in a timely manner in accordance with the applicable regulations and guidelines so as to enable them to make a balanced and informed decision. 2. An investment banker shall endeavour to ensure that the investors are provided with true and adequate information without making any misleading or exaggerated claims or any misrepresentation and are made aware of the attendant risks before taking any investment decision. 3. An investment banker shall ensure that copies of the prospectus, offer document, letter of offer or any other related document is made available to the investors at the time of issue or the offer. 4. An investment banker shall not discriminate amongst its clients, save and except on ethical and commercial considerations. 5. An investment banker shall maintain arm s-length relationship between the investment banking activity and any other activity. 6. An investment banker shall demarcate the responsibilities of the various intermediaries clearly so as to avoid any conflict or confusion in their job description. I. IBU acting as banker to an issue 1. A banker to an issue shall not allow blank application forms bearing brokers stamp to be kept at the bank premises or peddled anywhere near the entrance of the premises. 2. A banker to an issue shall not accept applications after office hours or after the date of closure of the issue or on bank holidays. 3. A banker to an issue shall not part with the issue proceeds until listing permission is granted by the stock exchange to the body corporate. 4. A banker to an issue shall not delay in issuing the final certificate pertaining to the collection figures to the lead manager and the body corporate. J. Research Entities 1. A research entity shall act with due skill, care and diligence and shall ensure that the research report is prepared after thorough analysis. 2. A research entity shall effectively address conflict of interest which may affect the impartiality of its research analysis and research report and shall make appropriate disclosures to address the same. 3. A research entity or its employees or research analysts shall not engage in insider trading or front running or front running of its own research report 4. A research entity shall maintain confidentiality of report till the report is made public. 5. A research entity shall observe high professional standard while preparing research report. 6. The senior management of a research entity shall bear primary responsibility for ensuring the maintenance of appropriate standards of conduct and adherence to proper procedures. K. RAJARAMAN, Chairperson [ADVT.-III/4/Exty./36/2025-26]