THE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) (STOCK BROKERS) (AMENDMENT) REGULATIONS, 2022
No. SEBI/LAD-NRO/GN/2022/73.—In exercise of the powers conferred under Section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992, namely:-
- These regulations may be called the Securities and Exchange Board of India (Stock Brokers)(Amendment) Regulations, 2022.
- They shall come into force on the date of their publication in the Official Gazette.
- In the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992-
I. In regulation 2, in sub-regulation (1), clause (ca) shall be renumbered as (cb) and before the clause so renumbered, the following new clause shall be inserted, namely, –
“(ca) “professional clearing member” means a member having clearing and settlement rights in any recognized clearing corporation, but not having trading rights in any recognized stock exchange.”
II. In Schedule V,
(i) in Part A, after clause 1A, the following clause shall be inserted, namely, –
“1B. This schedule shall apply to every stock broker who deals in electronic gold receipt segment and every clearing member / self-clearing member who clears and settles trades in electronic gold receipt segment, from the date of grant of registration.”
(ii) in Part B, in clause 3, in sub-clause (1), in the table, after the row for the „Debt‟ Segment, the following new row shall be inserted, namely, –
III. In Schedule VI,
(i) Clause 1 shall be substituted with the following, namely, –
“1. The stock broker shall have such networth and shall deposit with the stock exchange such sum as may be specified by the Board/ stock exchange from time to time.”
(ii) Clause 3 shall be substituted with the following, namely, –
“3. The quantum of networth and deposit to be maintained by the trading member/ selfclearing member/ clearing member/ professional clearing member, dealing/clearing and settling trades in securities, shall be as specified in Table 1 and Table 2 of this Schedule.”
(iii) Clause 5 shall be substituted with the following, namely, –
“5. The quantum of networth to be maintained by the stock broker/clearing member, as specified in Table 1 of this Schedule, shall be reckoned for all segments/stock exchanges.”
(iv) Clause 6 shall be renumbered as Clause 7 and before the clause so renumbered, the following new clause shall be inserted, namely, –
“6. (1) Where the trading member/ self-clearing member deposits the fund with the clearing member/ professional clearing member/ clearing corporation, the maintenance of variable networth would not be required by that trading member/ self-clearing member to the extent of client‟s funds deposited with clearing member/ professional clearing member/ clearing corporation.
(2) Where the trading member deposits the client‟s funds with clearing member/ professional clearing member, the computation of variable networth at the level of clearing member/ professional clearing member shall also include the funds of the clients of trading member deposited with the clearing member/ professional clearing member.
(3) Where the self-clearing member/ clearing member/ professional clearing member deposits the client‟s funds with the clearing corporation, the same shall be excluded while calculating the variable networth at the level of the self-clearing member/ clearing member/ professional clearing member: Provided that the cash / Fixed Deposit Receipts/ Bank Guarantee accepted by trading member/ self-clearing member/ clearing member/ professional clearing member shall be included while calculating the variable networth:
Provided further that the cash / Fixed Deposit Receipts/ Bank Guarantee of clients deposited by trading member with clearing member/ professional clearing member and by self-clearing member/ clearing member/ professional clearing member with the clearing corporation shall be excluded while calculating the variable networth.”
(v)After clause 7, Table 1 and Table 2 shall be substituted with the following, namely, –
“TABLE 1
NETWORTH FOR MEMBERS DEALING IN SECURITIES
*In Currency Derivative Segment, Self-Clearing Member and Clearing Member shall have minimum networth of Rs. 5 crore and Rs. 10 crore, respectively.
# Networth requirement for members shall be Base Networth or Variable Networth, whichever is higher.
TABLE 2
DEPOSIT FOR MEMBERS DEALING IN SECURITIES
NCDE: National Commodity Derivatives Exchanges
RCDE: Regional Commodity Derivatives Exchanges
*As may be specified by the Board from time to time.”
(vi) after Table 2, the Explanation clause shall be substituted with the following, namely, –
“Explanation 1:
For the purposes of this Schedule, ‘base networth’ shall mean paid up capital, fully, compulsorily and mandatorily convertible debentures / bonds / warrants which are convertible within a period of 5 years from the date of issue, free reserves and other securities approved by the Board from time to time, but shall not include fixed assets, pledged securities, value of member‟s card, non-allowable securities (unlisted securities), bad deliveries, any debts and advances (except trade debtors of less than 3 months), prepaid expenses, losses, intangible assets and 30% value of marketable securities:
Provided that in case of securities pledged to clearing corporation, the post haircut value of shares owned by the Trading Member / Clearing Member, as may be specified by the Board from time to time, shall be considered for computation of the networth:
Provided further that the deposit requirement specified for the debt segment shall not be applicable when a clearing member clears and settles all the trades only on gross basis for both securities and funds, without using settlement or trade guarantee fund:
Provided further that where the stock broker, clearing member or self-clearing member in the debt segment, is also regulated by a sectoral regulator other than the Board, the networth shall be computed in the manner as specified by such sectoral regulator or as specified by the Board, whichever is higher.
Explanation 2: For the purposes of this Schedule, free reserves shall include Profit and Loss, General Reserve, Securities Premium, Preference Share Redemption Reserve and Capital Redemption Reserve, but shall not include reserves created by revaluation of assets.”
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