Sebi review to ensure broker net worth rules align with risk: Sebi Chief

The Securities and Exchange Board of India (Sebi) is reviewing the framework for variable net worth requirements for stockbrokers to ensure that capital requirements are aligned with their operational scale and risk, Chairman Tuhin Kanta Pandey said on Monday.

Currently, variable net worth is linked to 10% of the average daily client cash balance retained by brokers. In April, the regulator proposed a more comprehensive, risk-based approach.

It had then said variable net worth would be computed as an aggregate of two key components: a portion linked to client funds and another tied to the size of the client base.

Sebi also plans to improve price discovery during the listing process through the pre-open call auction mechanism for initial public offerings and relisted securities. The proposed changes are aimed at ensuring “more stable and efficient market openings”, Pandey said at an event. India witnessed 366 IPOs in FY26, raising about ₹1.9 lakh crore, while total equity fundraising had crossed ₹4.5 lakh crore.

Last month, the regulator suggested changes to the pre-open call auction process, including a new methodology for determining base prices for re-listed stocks and a more dynamic mechanism for widening price bands. Sebi is also working on easing compliance requirements for research analysts, including rationalising requirements such as call recording obligations in institutional interactions, Pandey said.

For the mutual fund industry, Pandey said Sebi is proposing a more practical framework for the use of intraday borrowing – not just as a contingency tool, but as an efficient mechanism for managing temporary liquidity mismatches.
On the debt side, the Sebi chief said a working group is sorting out operational details to introduce a market-making framework to improve liquidity in the corporate bond market. “Additionally, Sebi and the Reserve Bank of India are working together to introduce derivatives on corporate bond indices,” he said.