Quick summary
SEBI is reviewing the variable net worth requirement for stock brokers to ensure it aligns with the operational risk taken by brokers.
Who is affected
Stock brokers and stock exchanges are affected by this review.
What changes
The current method of calculating variable net worth based on average daily cash balance of clients may not be effective due to the introduction of the upstreaming framework. A new method is proposed, which considers parameters such as average credit balance, number of active clients, and number of clients through Authorised Persons.
Action items
Stock brokers and stock exchanges need to review the proposed method and provide comments/suggestions by May 15, 2026. Stock exchanges are also directed to bring the provisions of the circular to the notice of their members/participants and make necessary amendments to their Bye-laws, Rules, and Regulations.
Key dates-deadlines
- May 15, 2026: Last date for submitting comments/suggestions
- Not specified in the source: Date of implementation of the new method
Source reference
SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2026, April 24, 2026