Description

SEBI clarifications on determining registered clients and categorization of proprietary trading members under the CSCRF guidelines

Summary

SEBI has issued clarifications regarding the implementation of the Cybersecurity and Cyber Resilience Framework (CSCRF) for regulated entities, specifically addressing how to determine the number of registered clients and the categorization of trading members engaged in both clientele and proprietary trading.

Key Points

  • Registered clients should be counted based on Unique PAN, including both active and inactive status
  • Clients marked as “Closed” in the UCC database should be excluded from the count
  • Trading members with clientele trading turnover less than 10% of proprietary trading turnover will be categorized as proprietary stockbrokers/trading members
  • Clarifications apply to the period April 1 to March 31 for determining trading turnover

Regulatory Changes

The circular clarifies two key aspects of CSCRF implementation:

  1. Client Count Methodology: Modifies the interpretation of “Number of total registered clients” as specified in SEBI Circular No. SEBI/HO/ITD-1/ITD_CSC_EXT/P/CIR/2025/60 dated April 30, 2025

  2. Proprietary Trading Classification: Establishes a 10% threshold for clientele trading turnover to determine whether a trading member should be categorized as proprietary for CSCRF purposes

Compliance Requirements

  • Research Analysts and trading members must recalculate their registered client counts using Unique PAN methodology
  • Exclude clients with “Closed” status in UCC database from total count
  • Trading members engaged in both clientele and proprietary trading must assess their turnover ratio for proper categorization
  • Entities must ensure compliance with the clarified parameters for CSCRF implementation

Important Dates

  • Circular Date: September 2, 2025
  • Assessment Period: April 1 to March 31 (for determining trading turnover ratios)
  • Previous Related Circulars: August 20, 2024; December 31, 2024; March 28, 2025; April 30, 2025; August 28, 2025
  • FAQ Date: June 11, 2025

Impact Assessment

These clarifications will affect how trading members and research analysts determine their categorization under CSCRF, potentially changing their compliance obligations. Trading members with minimal clientele business relative to proprietary trading will benefit from simplified compliance requirements as proprietary entities. The clarified client counting methodology ensures consistent application across all regulated entities.

Impact Justification

Important compliance clarifications for determining client counts and proprietary trading categorization under CSCRF, affecting operational compliance requirements