Description

SEBI extends deadlines for stock brokers to submit net worth certificates for margin trading eligibility, harmonizing timelines with financial result declaration requirements.

Summary

SEBI has relaxed the timeline for stock brokers to submit net worth certificates required for offering margin trading facility to clients. The new deadlines are harmonized with financial result declaration timelines under SEBI LODR Regulations 2015.

Key Points

  • Net worth certificates must be submitted half-yearly as on March 31 and September 30
  • New deadlines: within 60 days from March 31 half-year end and within 45 days from September 30 half-year end
  • Replaces previous fixed deadlines of April 30 and October 31
  • Change harmonizes timelines with SEBI LODR Regulation 33 requirements
  • Provision comes into effect immediately

Regulatory Changes

Para 4.5.3 of Chapter 1 of the Master Circular for Stock Exchanges and Clearing Corporations (SECC) dated December 30, 2024 has been modified. The new requirement states that certificates shall be submitted not later than May 31 and November 15 every year.

Compliance Requirements

  • Stock brokers must obtain auditor certificates confirming net worth as on March 31 and September 30
  • Certificates must be submitted within the revised timelines to remain eligible for margin trading facility
  • Stock exchanges must amend bye-laws, rules and regulations to implement the decision
  • Stock exchanges must notify members and publish on their websites

Important Dates

  • Effective Date: Immediate
  • New Submission Deadlines:
    • May 31 (for March 31 half-year)
    • November 15 (for September 30 half-year)
  • Previous Deadlines: April 30 and October 31 (now relaxed)

Impact Assessment

This is a regulatory relief measure that provides stock brokers with additional time to submit compliance documentation. The extended timelines reduce compliance pressure and align with existing financial reporting schedules, promoting ease of doing business without compromising regulatory oversight of margin trading operations.

Impact Justification

Regulatory relief measure that eases compliance burden for stock brokers without significant market impact