Description

FAQ document providing guidance to brokers on filling RBS submission form fields including loan details, insurance details, brokerage income, client debit balances, collateral valuation, and regulatory action reporting.

Summary

BSE has issued a Frequently Asked Questions (FAQ) document to guide trading members on filling the Risk Based Supervision (RBS) submission form for the period April 01, 2025 to September 30, 2025. The document provides detailed instructions on specific field entries including loan details, insurance information, brokerage income, client debit balances, collateral calculations, and regulatory action reporting.

Key Points

  • Field G (Loans): If no loans given to associate/group companies, insert “0” in secured and unsecured loans and “N.A./Not Applicable” in loan details
  • Field F (Insurance Details): Click Add button after entering data to save records
  • Field 20 (Brokerage Income): Consider gross brokerage revenue from broking operations across all exchanges
  • Field 22 (Debit Balances): Aggregate value of clear debit balances across MTF/Non-MTF after adjusting for open bills, uncleared cheques, and margin obligations
  • Field 23 (Collateral): Total available collateral from debit balance clients - consider lower of debit and total collateral value per client
  • Collateral valuation methodology: T day quantity with T-1 day closing price reduced by haircut not less than VAR margin rate
  • Field 24 (Payment Charges): Total delayed payment charges collected from clients during year ended March 31, 2024
  • Field 30: Number of instances of fraud
  • Field 31: Number of SEBI inspections
  • Field 32: Action by police/foreign regulator
  • Field 35: Number of instances of disciplinary action against key person
  • Field L (PAN): Entities without PAN should use “PANNOTAPPL” with mandatory reasons for non-applicability
  • For zero instances, insert “0” in relevant fields and save

Regulatory Changes

No regulatory changes introduced. This is a guidance document clarifying existing RBS submission requirements.

Compliance Requirements

  • Trading members must complete RBS submission for period April 01, 2025 - September 30, 2025
  • Mandatory to fill all details of loans given in the loan details table
  • Must specify reasons for PAN non-applicability when using “PANNOTAPPL”
  • Collateral value calculation must use:
    • T day quantity
    • T-1 day closing price
    • Haircut at rate not less than VAR margin rate at beginning of T Day
  • Total collateral for debit balance clients: Consider client securities in Pool Account and Pledged to Trading Member (Client Securities Margin Pledge Account, Client Securities Under Margin Funding Account, Client Unpaid Securities Pledgee Account)
  • Client-wise available collateral = lower of (debit balance, total value of collateral)
  • Brokerage income must include gross revenue across all exchanges
  • Delayed payment charges to be reported for year ended March 31, 2024 across all exchanges

Important Dates

  • Assessment Period: April 01, 2025 - September 30, 2025
  • Reference Period for Delayed Payment Charges (Field 24): Year ended March 31, 2024

Impact Assessment

Operational Impact: Trading members need to ensure accurate data compilation and submission for RBS reporting. The detailed FAQ provides clarity on complex calculations particularly around collateral valuation and debit balance aggregation.

Compliance Impact: Brokers must ensure systems can accurately calculate collateral values using specified methodology (T day quantity, T-1 closing price with VAR-based haircuts). Proper documentation required for PAN non-applicability cases.

Risk Management: The RBS framework enables exchange to assess broker risk profiles based on standardized metrics including client debit exposures, collateral adequacy, regulatory actions, and revenue patterns.

Impact Justification

Operational compliance requirement for brokers with specific reporting guidelines for the April-September 2025 period. Medium impact as it affects broker operations and regulatory compliance but does not directly impact trading or market structure.