Description

SEBI extends deadlines for stock brokers to submit net worth certificates required for offering margin trading facility to clients, harmonizing timelines with financial result declaration requirements.

Summary

SEBI has relaxed the timeline for stock brokers to submit net worth certificates required for offering margin trading facility to their clients. The new deadlines are extended from April 30 and October 31 to May 31 and November 15 respectively, harmonizing with financial result declaration timelines under SEBI LODR Regulations.

Key Points

  • Stock brokers must submit half-yearly net worth certificates as on March 31 and September 30 each year
  • Previous deadlines were April 30 and October 31 respectively
  • New deadlines are May 31 and November 15 respectively
  • Changes align with financial result declaration timelines (45 days for September half-year, 60 days for March half-year)
  • Modification based on market participant representations and ease of doing business considerations

Regulatory Changes

  • Para 4.5.3 of Chapter 1 of Master Circular for Stock Exchanges and Clearing Corporations (SECC) dated December 30, 2024 has been modified
  • New submission timeline: within 45 days from September 30 half-year end and within 60 days from March 31 half-year end
  • Harmonized with Regulation 33 of SEBI LODR Regulations, 2015

Compliance Requirements

  • Stock brokers offering margin trading facility must submit auditor-certified net worth certificates
  • Certificates required half-yearly as on March 31 and September 30
  • Must be submitted to respective stock exchanges
  • Stock exchanges must amend bye-laws, rules and regulations accordingly
  • Stock exchanges must notify members and publish on websites

Important Dates

  • Effective Date: Immediate effect from August 26, 2025
  • New Submission Deadlines:
    • For March 31 certificates: By May 31
    • For September 30 certificates: By November 15
  • Previous Deadlines (now relaxed):
    • For March 31 certificates: By April 30
    • For September 30 certificates: By October 31

Impact Assessment

Positive impact on stock brokers by providing additional time for compliance, reducing operational burden and aligning with existing financial reporting schedules. This regulatory relaxation promotes ease of doing business while maintaining investor protection through continued net worth monitoring requirements for margin trading activities.

Impact Justification

Provides operational relief to stock brokers by extending compliance deadlines, harmonizing with existing financial reporting timelines