Description
BSE requires clearing members to submit audited networth certificates, computation statements, auditor's reports and annual accounts for the financial year ended March 31, 2025 by October 31, 2025.
Summary
BSE has notified clearing members in Cash, Equity Derivative, Currency Derivative, Debt, Commodity Derivative and EGR segments to submit their Audited Networth Certificate, Computation of Networth, Auditor’s Report, Audited Annual Accounts and Financial Strength details for the financial year ended March 31, 2025 by October 31, 2025. The circular specifies minimum networth requirements for different membership types and penalties for non-compliance or networth shortfalls.
Key Points
- Submission deadline: October 31, 2025 for FY 2024-25 documents
- Applies to clearing members in all segments: Cash, Equity Derivative, Currency Derivative, Debt, Commodity Derivative and EGR
- Three membership categories with different networth requirements: SCM (Self Clearing Member), TCM (Trading and Clearing Member), and PCM (Professional Clearing Member)
- Banks have special networth requirements of Rs. 500 crores for Currency Derivatives segment
- Banks can submit networth certificate as per RBI guidelines format (Annexure 2C)
- Non-bank members must use SEBI prescribed format (Annexure 2A and 2B)
- Progressive penalty structure for late submission
- Deposit blocking mechanism based on networth shortfall percentage
Regulatory Changes
No new regulatory changes introduced. This is a recurring annual compliance requirement mandated by SEBI regulations for clearing members.
Compliance Requirements
Documents to Submit:
- Audited Networth Certificate (as per prescribed format)
- Computation of Networth statement
- Auditor’s Report
- Audited Annual Accounts for FY 2024-25
- Financial Strength details
Minimum Networth Requirements by Segment:
For Non-Bank Members:
- SCM (Self Clearing Member): Rs. 5.00 crores across all segments
- TCM (Trading and Clearing Member): Rs. 15.00 crores across all segments
- PCM (Professional Clearing Member): Rs. 50.00 crores across all segments
For Banks (Currency Derivatives):
- All categories: Rs. 500.00 crores
Format Requirements:
- Banks: Use Annexure 2(C) format and RBI guidelines for networth computation
- All other members: Use SEBI prescribed format per Annexure 2(A) and Annexure 2(B)
Penalty Structure for Late/Non-Submission:
- First month after due date: Rs. 100 per day
- Second month: Rs. 200 per day
- Third month onwards: Rs. 300 per day until submission or disablement of clearing membership
Action for Networth Shortfall:
| Networth Shortfall | Deposit Blocked |
|---|---|
| ≤ 10% of prescribed minimum | 10% of total deposits (cash and collateral) |
| ≤ 20% of prescribed minimum | 25% of total deposits (cash and collateral) |
| ≤ 50% of prescribed minimum | 50% of total deposits (cash and collateral) |
| > 50% of prescribed minimum | 90% of total deposits (cash and collateral) |
Important Dates
- Financial Year End: March 31, 2025
- Submission Deadline: October 31, 2025
- Penalty Start Date: November 1, 2025 (for non-submission)
Impact Assessment
High Impact on Clearing Members:
This circular has significant implications for all clearing members across BSE’s trading and clearing segments:
Operational Impact: Non-compliance may result in disablement of clearing membership, severely impacting business operations
Financial Impact:
- Daily penalties ranging from Rs. 100 to Rs. 300 can accumulate quickly
- Networth shortfalls trigger immediate blocking of deposits (10% to 90% depending on shortfall severity)
- Blocked deposits affect operational liquidity and trading capacity
Regulatory Risk: Failure to maintain minimum networth requirements may lead to suspension or termination of clearing privileges
Capital Requirements: Members must ensure adequate capital is maintained to meet segment-specific networth thresholds throughout the year
Banks Face Higher Bar: Currency derivative segment requires Rs. 500 crores networth for banks, significantly higher than the standard Rs. 5-50 crores for non-bank members
Administrative Burden: Members must coordinate with auditors to ensure timely completion and submission of comprehensive financial documentation
Clearing members should prioritize compliance to avoid operational disruptions and financial penalties.
Impact Justification
Mandatory compliance requirement for all clearing members across all segments with significant penalties for non-compliance. Critical for member eligibility and operational continuity.