Description

BSE clarifies that stockbrokers must continue complying with existing variable net worth requirements (10% of average daily cash balance) until SEBI specifies revised requirements under the new SEBI (Stockbrokers) Regulations, 2026.

Summary

BSE has issued a clarification regarding the computation of variable net worth for stockbrokers. Following the introduction of SEBI (Stockbrokers) Regulations, 2026, the exchange has confirmed that until SEBI specifies revised variable net worth requirements under the new regulations, all members must continue to comply with the existing formula specified in the SEBI (Stock Brokers) Regulations, 1992. This maintains the requirement at 10% of average daily cash balance of clients retained with the stockbroker across segments/exchanges in the previous six months.

Key Points

  • Variable net worth requirement continues to be 10% of average daily cash balance of clients retained with stockbroker across segments/exchanges in the previous six months
  • This calculation method remains applicable until SEBI specifies revised requirements under SEBI (Stockbrokers) Regulations, 2026
  • References previous notices dated March 10, 2022 (20220310-8) and February 03, 2023 (20230203-19)
  • All BSE members must continue compliance with existing variable net worth formula
  • SEBI (Stockbrokers) Regulations, 2026 now governs stockbroker regulations, replacing the 1992 regulations

Regulatory Changes

The SEBI (Stockbrokers) Regulations, 2026 have been introduced, replacing the SEBI (Stock Brokers) Regulations, 1992. However, regarding variable net worth computation, there is a transitional provision: the old calculation methodology (10% of average daily cash balance) remains in force until SEBI explicitly specifies new requirements under the 2026 regulations.

Compliance Requirements

  • Stockbrokers must maintain variable net worth equal to 10% of average daily cash balance of clients retained across all segments and exchanges
  • Calculation period: previous six months
  • This requirement applies across all trading segments (equity, derivatives, currency, commodity) and exchanges
  • Members must continue monitoring and maintaining compliance with this formula
  • Any queries should be directed to membership.ops@bseindia.com

Important Dates

  • February 05, 2026: Date of current clarification notice (20260205-33)
  • Previous references: March 10, 2022 (notice 20220310-8) and February 03, 2023 (notice 20230203-19)
  • Effective immediately: Continuation of existing variable net worth computation method until further notification from SEBI

Impact Assessment

Operational Impact: The circular provides regulatory certainty during the transition to new SEBI regulations. Stockbrokers can continue using established calculation methodologies without disruption to their capital adequacy monitoring processes.

Compliance Impact: No immediate change in compliance requirements for stockbrokers. The existing formula and monitoring systems remain valid, preventing any compliance gaps during the regulatory transition period.

Market Impact: Minimal immediate market impact as this maintains status quo. The clarification prevents confusion that could arise from the introduction of new SEBI (Stockbrokers) Regulations, 2026 regarding which variable net worth computation method applies.

Impact Justification

Provides regulatory continuity guidance for stockbrokers on variable networth computation pending new SEBI specifications under updated regulations