SEBI proposes tighter variable net worth norms for Indian brokers

10 articles · Updated · Reuters · Apr 24

The new proposal requires brokers to hold at least 10% of the average client credit balance and additional capital based on active client numbers, with slabs starting at 5 million rupees.
Brokers serving clients through authorized persons face extra requirements, rising from 0.5 million to 5 million rupees as client numbers increase, and public comments are invited until May 15.
These changes follow SEBI's upstreaming framework, which mandates brokers transfer client funds to clearing corporations, aiming to better align capital with operational risks and enhance investor protection.

How will smaller brokers survive SEBI's stricter capital requirements?

How will firms manage capital needs tied to fluctuating client numbers?

Will SEBI's investor protection plan lead to higher trading fees?

Are clearing corporations the next target for SEBI's risk management rules?

What innovative measures could better protect investors from broker defaults?

Is raising broker capital an overreaction after the upstreaming rule?