SEBI tightens broker net worth rules to reflect market risks
Business
SEBI is shaking up the rules for stockbrokers, making sure their net worth actually matches the risks they take on today.
The old method, based on client funds, just doesn't fit anymore since clearing corporations now handle that money.
Broker net worth based on balances/counts/agents
Now, a broker's required net worth depends on three things: 10% of average client balances over six months, how many active clients they have (brokers with 10,000 to 50,000 clients need at least ₹50 lakh), and whether they use agents to get clients (those start at ₹5 lakh).
SEBI says these tweaks are all about keeping things stable and safe as more people jump into the market.