SCHEDULE - VI - APPLICABILITY, MANNER OF PAYMENT AND RECOVERY - Securities and Exchange Board of India (Stock Brokers) Regulations, 1992

1 [SCHEDULE VI NETWORTH AND DEPOSIT REQUIREMENTS FOR STOCK BROKERS/ CLEARING MEMBERS/ SELF- CLEARING MEMBERS [Regulation 5(h), 9(g)] APPLICABILITY, MANNER OF PAYMENT AND RECOVERY 6 [ 1. The stock broker shall have such networth and shall deposit with the stock exchange such sum as may be specified by the Board/ stock exchange from time to time. ] 2. The clearing member/ self-clearing member shall have the minimum networth and shall deposit the minimum sum specified hereunder or a higher amount with the clearing corporation promoted by the respective stock exchange in the manner specified from time to time. 7 [ 3. The quantum of networth and deposit to be maintained by the trading member/ self-clearing member/ clearing member/ professional clearing member, dealing/clearing and settling trades in securities, shall be as specified in Table 1 and Table 2 of this Schedule. ] 4. The quantum of deposit to be maintained by the stock broker/clearing member shall be separately calculated segment wise. 8 [ 5. The quantum of networth to be maintained by the stock broker/clearing member, as specified in Table 1 of this Schedule, shall be reckoned for all segments/stock exchanges. ] 10 [ 6. (1) Where the trading member/ self-clearing member deposits the fund with the clearing member/ professional clearing member/ clearing corporation, the maintenance of variable networth would not be required by that trading member/ self-clearing member to the extent of client s funds deposited with clearing member/ professional clearing member/ clearing corporation. (2) Where the trading member deposits the client s funds with clearing member/ professional clearing member, the computation of variable networth at the level of clearing member/ professional clearing member shall also include the funds of the clients of trading member deposited with the clearing member/ professional clearing member. (3) Where the self-clearing member/ clearing member/ professional clearing member deposits the client s funds with the clearing corporation, the same shall be excluded while calculating the variable networth at the level of the self-clearing member/ clearing member/ professional clearing member: Provided that the cash / Fixed Deposit Receipts/ Bank Guarantee accepted by trading member/ self-clearing member/ clearing member/ professional clearing member shall be included while calculating the variable networth: Provided further that the cash / Fixed Deposit Receipts/ Bank Guarantee of clients deposited by trading member with clearing member/ professional clearing member and by self-clearing member/ clearing member/ professional clearing member with the clearing corporation shall be excluded while calculating the variable networth. ] 5 [ 9 [ (7) ] Every Stock Broker shall be entitled to act as an underwriter only out of its own net worth/funds as may be prescribed from time to time. ] 11 [ TABLE 1 NETWORTH FOR MEMBERS DEALING IN SECURITIES Type of Member Base Networt {within 1 year of the date of notification of the Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2022} (in ₹) Base Networt {within 2 years of the date of notification of the Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2022} (in ₹) Variable Networth {within 1 year of the date of notification of the Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2022} # Trading Member - 1 crore 10% of average daily cash balance of clients retained with the member across segments/ exchanges in the previous 6 months. Self-Clearing Member 3 crore* 5 crore Clearing Member 10 crore* 15 crore Professional Clearing Member 25 crore 50 crore * In Currency Derivative Segment, Self-Clearing Member and Clearing Member shall have minimum networth of ₹ 5 crore and ₹ 10 crore, respectively. # Networth requirement for members shall be Base Networth or Variable Networth, whichever is higher. 13 [ However, the requirement of Variable Networth shall not be applicable for Execution Only Platforms segment. ] TABLE 2 DEPOSIT FOR MEMBERS DEALING IN SECURITIES Segment Trading member (in ₹ ) Clearing member (in ₹ ) Self-clearing member (in ₹ ) Cash * * * Equity Derivatives * 50 Lakh 50 Lakh Currency Derivatives * 50 Lakh 50 Lakh Debt * * * Commodity Derivatives NCDE Nil 50 Lakh 50 Lakh RCDE Nil * * Electronic Gold Receipts * 1 crore 1 crore 14 [Execution Only Platforms * * * ] NCDE: National Commodity Derivatives Exchanges RCDE: Regional Commodity Derivatives Exchanges *As may be specified by the Board from time to time. ] 12 [Explanation 1: For the purposes of this Schedule, 'base networth' shall mean paid up capital, fully, compulsorily and mandatorily convertible debentures / bonds / warrants which are convertible within a period of 5 years from the date of issue, free reserves and other securities approved by the Board from time to time, but shall not include fixed assets, pledged securities, value of member s card, non-allowable securities (unlisted securities), bad deliveries, any debts and advances (except trade debtors of less than 3 months), prepaid expenses, losses, intangible assets and 30% value of marketable securities: Provided that in case of securities pledged to clearing corporation, the post haircut value of shares owned by the Trading Member / Clearing Member, as may be specified by the Board from time to time, shall be considered for computation of the networth: Provided further that the deposit requirement specified for the debt segment shall not be applicable when a clearing member clears and settles all the trades only on gross basis for both securities and funds, without using settlement or trade guarantee fund: Provided further that where the stock broker, clearing member or self-clearing member in the debt segment, is also regulated by a sectoral regulator other than the Board, the networth shall be computed in the manner as specified by such sectoral regulator or as specified by the Board, whichever is higher. Explanation 2 : For the purposes of this Schedule, free reserves shall include Profit and Loss, General Reserve, Securities Premium, Preference Share Redemption Reserve and Capital Redemption Reserve, but shall not include reserves created by revaluation of assets. ] ********** 1 Schedule VI inserted by the SEBI (Stock Brokers and Sub-brokers) (Second Amdt.) Regulations,2013 w.e.f 27-09-2013. 2 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2015.w.e.f 28-09-2015 Prior to substitution clause 3 read as: 3. The quantum of networth and deposit to be maintained by the stock broker/clearing member shall be as specified in the Table provided in this Schedule clearing corporation or clearing house means the clearing corporation or clearing house of a recognised stock exchange to clear and settle trades in securities; 3 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2015.w.e.f 28-09-2015 Prior to substitution the heading for the table read as: TABLE ON NETWORTH AND DEPOSIT 4 Inserted by the SEBI (Stock Brokers and Sub-brokers)(Amendment) Regulations, 2015, w.e.f. 28-09-2015. 5. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/14 dated 30-03-2021 6. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/73 dated 23-02-2022 before it was read as 1. The stock broker shall have a net-worth and shall deposit with the stock exchange a sum as may be specified by the Board/ Stock Exchange for the relevant segment from time to time. 7. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/73 dated 23-02-2022 before it was read as 2 [3. The quantum of networth and deposit to be maintained by- (a) the stock broker/ clearing member, dealing /clearing and settling trades in securities, other than commodity derivatives, shall be as specified in Table 1 of this Schedule; (b) the stock broker/ clearing member, dealing/ clearing and settling trades in commodity derivatives, shall be as specified in Table 2 of this Schedule: Provided that a person dealing in commodity derivatives as a commodity derivatives broker, clearing and settling trades as a commodity derivatives clearing member or self-clearing member, immediately before the transfer and vesting of rights and assets of the Forward Markets Commission with the Securities and Exchange Board of India, shall maintain the networth and deposit as specified by the commodity derivatives exchange, of which it holds membership: Provided further that within a period of one year from the date of transfer and vesting of rights and assets of the Forward Markets Commission with the Securities and Exchange Board of India, such persons shall satisfy the networth and deposit as specified in Table 2 of this Schedule. ] 8. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/73 dated 23-02-2022 before it was read as 5. The quantum of networth to be maintained by the stock broker/clearing member shall be collectively reckoned for all segments. It therefore means that if a stock broker/clearing member has a networth which is higher, then he may not be required to maintain separate networth for the other segments requiring lower networth. 9. Re-Numbered vide Notification No. SEBI/LAD-NRO/GN/2022/73 dated 23-02-2022 before it was read as (6) 10. Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/73 dated 23-02-2022 11. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/73 dated 23-02-2022 before it was read as 3 [ TABLE 1 NETWORTH AND DEPOSIT FOR MEMBERS DEALING IN SECURITIES, OTHER THAN COMMODITY DERIVATIVES] Segment Stock Broker (in Rs.) Clearing member (in Rs.) Self clearing member (in Rs.) Networth Deposit Networth Deposit Networth Deposit Cash * * * * * * Equity Derivatives * * 3 crore 50 lakh 1 crore 50 lakh Currency Derivatives 1 crore * 10 crore 50 lakh 5 crore 50 lakh Debt 50 Lakh (including for proprietary trading member) * 3 crore * 1 crore * * As may be specified by the Board from time to time 4 [TABLE 2 NETWORTH AND DEPOSIT FOR MEMBERS DEALING IN COMMODITY DERIVATIVES Type of member Networth (Amount in Rs.) Deposit (Amount in Rs.) For the members of For the members of National Commodity Derivatives Exchanges Regional Commodity Derivatives Exchanges National Commodity Derivatives Exchanges Regional Commodity Derivatives Exchanges Stock broker/ Trading member Nil Nil Nil Nil Self-clearing member 1 crore * 50 lakhs * Clearing member 3 crore * 50 lakhs * * As may be specified by the Board from time to time] 12. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/73 dated 23-02-2022 before it was read as Explanation.- For the purposes of this Schedule, 'networth' shall mean paid up capital, free reserves and other securities approved by the Board from time to time but shall not include fixed assets, pledged securities, value of member s card, non-allowable securities (unlisted securities), bad deliveries, doubtful debts and advances (debts or advances overdue for more than three months or debts or advances given to the associate persons of the member), prepaid expenses, losses, intangible assets and 30% value of marketable securities: Provided that the deposit requirement specified for the debt segment shall not be applicable when a clearing member clears and settles all the trades only on gross basis for both securities and funds, without using settlement or trade guarantee fund: Provided further that where the stock broker, clearing member or self-clearing member in the debt segment, is also regulated by a sectoral regulator other than the Board, the networth shall be computed in the manner as specified by such sectoral regulators.] 13. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/116 dated 17-01-2023 14. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/116 dated 17-01-2023