Description

BSE requires clearing members to submit audited networth certificates, computation of networth, auditor's reports and audited annual accounts for the financial year ended March 31, 2025 by October 31, 2025.

Summary

BSE has issued guidelines for clearing members to submit their Annual Audited Networth Certificate, Auditor’s Report, and Audited Annual Accounts for the financial year ended March 31, 2025. The submission deadline is October 31, 2025. The circular specifies minimum networth requirements for different membership categories across Cash, Equity Derivative, Currency Derivative, Debt, Commodity Derivative, and EGR segments.

Key Points

  • Clearing members must submit audited networth certificate, computation of networth, auditor’s report, audited annual accounts and financial strength details
  • Deadline for submission: October 31, 2025
  • Different networth requirements apply based on membership type (SCM/TCM/PCM)
  • Banks have special networth requirements of Rs. 500 crores for Currency Derivatives segment
  • Banks must submit networth certificate as per RBI guidelines (Annexure 2C)
  • All other members must use SEBI prescribed format (Annexure 2A & 2B)
  • Progressive fines apply for late submission: Rs. 100/day (1st month), Rs. 200/day (2nd month), Rs. 300/day (3rd month)
  • Deposit blocking applies for networth shortfalls

Regulatory Changes

No new regulatory changes introduced. This is a routine annual compliance requirement following existing SEBI gazette notification No. SEBI/LAD-NRO/GN/2022/73 dated February 23, 2022.

Compliance Requirements

Minimum Networth Requirements (in Rs. crores):

For all segments (Cash, Equity Derivative, Debt, Commodity Derivatives, EGR):

  • SCM (Self Clearing Membership): Rs. 5.00 crores
  • TCM (Trading and Clearing Membership): Rs. 15.00 crores
  • PCM (Professional Clearing Membership): Rs. 50.00 crores

For Currency Derivatives segment:

  • SCM: Rs. 5.00 crores (Rs. 500.00 crores for Banks)
  • TCM: Rs. 15.00 crores (Rs. 500.00 crores for Banks)
  • PCM: Rs. 50.00 crores (Rs. 500.00 crores for Banks)

Submission Requirements:

  • Audited Networth Certificate
  • Computation of Networth
  • Auditor’s Report
  • Audited Annual Accounts
  • Financial Strength Details

Format Requirements:

  • Banks: Annexure 2(C) as per RBI guidelines
  • All other members: Annexure 2(A) & 2(B) as per SEBI format

Important Dates

  • Financial Year End: March 31, 2025
  • Submission Deadline: October 31, 2025
  • Fine Structure Post-Deadline:
    • 1st month after due date: Rs. 100 per day
    • 2nd month: Rs. 200 per day
    • 3rd month onwards: Rs. 300 per day (until submission or membership disablement)

Impact Assessment

For Clearing Members:

  • High Compliance Burden: Must ensure timely preparation and submission of audited financial documents
  • Financial Impact: Late submission results in progressive daily fines
  • Operational Risk: Non-compliance can lead to clearing membership disablement

Networth Shortfall Consequences:

Deposit blocking based on shortfall percentage:

  • ≤10% shortfall: 10% of total deposits blocked
  • ≤20% shortfall: 25% of total deposits blocked
  • ≤50% shortfall: 50% of total deposits blocked

  • 50% shortfall: 90% of total deposits blocked

Market Impact:

  • Ensures financial stability of clearing members
  • Protects market integrity by maintaining minimum capital requirements
  • Members failing to meet networth requirements face restricted operations
  • Potential liquidity impact on members with blocked deposits due to shortfalls

Impact Justification

Mandatory compliance requirement for all clearing members across all segments with strict penalties for non-compliance. Failure to meet networth requirements can result in deposit blocking and potential disablement of clearing membership.