InvestorQ : Is it true that SEBI is planning to tighten net worth requirements for the Brokers?
Dawn Cherian made post

Is it true that SEBI is planning to tighten net worth requirements for the Brokers?

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Mitali Bhutta answered.
3 months ago
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In the last couple of years there have been more than 25 broker defaults and expulsions including some big names like Karvy, Arcadia, Bezel and Anugrah among others. In the wake of these string of defaults, SEBI plans to substantially increase the net worth requirement for stock brokers. In a number of cases, the defaults also coincided with the brokers illegitimately pledging the shares of customers to raise funds.

Currently, professional clearing members or PCMS and Trading-cum-clearing members or TCMs are stipulated to have a net worth of Rs.3 crore for cash segment and an additional Rs.3 crore for the futures and options segment. In the light of these defaults, SEBI plans to enhance the base net worth requirement to Rs.25 crore by Oct-22 and further to Rs.50 crore by Oct-23. This will not impact the large brokers but will surely hit the small and mid-sized brokers.

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