Description

NSE provides clarifications on client counting methodology and proprietary trading categorization for CSCRF compliance.

Summary

NSE has issued clarifications to the Cybersecurity and Cyber Resilience Framework (CSCRF) for SEBI Regulated Entities, following consultation with SEBI. The circular clarifies the methodology for counting registered clients and the categorization criteria for trading members engaged in both clientele and proprietary trading.

Key Points

  • Client count methodology clarified for CSCRF compliance determination
  • Registered clients should be counted based on unique PAN with active and inactive status
  • Closed clients should be excluded from the count
  • Proprietary trading members with minimal clientele business may be categorized differently
  • Trading members with clientele turnover less than 10% of proprietary turnover qualify for special categorization

Regulatory Changes

No new regulatory requirements introduced. The circular provides clarifications to existing CSCRF guidelines:

  • Refined definition of “registered clients” for compliance categorization
  • Established threshold criteria (10%) for proprietary vs clientele trading classification
  • Clarified treatment of closed client accounts in compliance calculations

Compliance Requirements

  • Trading members must apply the clarified client counting methodology for CSCRF compliance
  • Count registered clients based on unique PAN including active and inactive status only
  • Exclude clients marked as “Closed” in UCC database from the count
  • Trading members engaged in both clientele and proprietary trading must assess their business mix
  • Apply 10% threshold test to determine appropriate CSCRF categorization

Important Dates

  • Circular issued: September 01, 2025
  • Financial year assessment period: April 1 to March 31 (for proprietary vs clientele trading evaluation)
  • No specific implementation deadlines mentioned as these are clarifications to existing requirements

Impact Assessment

The clarifications will help trading members accurately determine their CSCRF compliance category and requirements. Members with predominantly proprietary trading operations (>90% of turnover) may benefit from different compliance categorization. The refined client counting methodology provides clarity for compliance assessment and may result in some members being recategorized under the framework.

Impact Justification

Provides important clarifications for ongoing CSCRF compliance but does not introduce new major requirements