In a move aimed at bolstering market integrity and streamlining regulatory compliance, the Securities and Exchange Board of India (SEBI) has proposed a sweeping overhaul of exchange norms, including a significant increase in the net-worth requirements for margin trading brokers. The proposals, announced on Friday January 8, 2026, seek to create a unified framework, eliminate redundancies, and enhance operational efficiency for exchanges and market participants.
One of the key proposals is to raise the minimum net-worth requirement for stockbrokers offering margin trading facilities from ₹3 crore to ₹5 crore (approximately $554,926.64). The existing threshold of ₹3 crore, established in 2004, has remained unchanged since its last review in 2022. This revision empowers exchanges to independently adjust net-worth requirements without needing prior regulatory approval.
In addition to the net-worth increase, SEBI is advocating for a uniform set of trading-related disclosure requirements to standardize compliance across all stock exchanges and commodity exchanges in India. The regulator also proposed that liquidity enhancement rules, currently applied to equity and equity derivatives, should extend to commodity derivatives. These rules provide financial incentives for brokers to boost trading volumes, but SEBI emphasized that such schemes should not create artificial volumes, undermine market liquidity, or be manipulative. Exchanges initiating a new segment can offer incentives of up to 25% of their net worth in the first five years, followed by incentives of up to 25% of their profits for the product.
The proposed changes also include revised timelines for net-worth certificate submissions by brokers offering MTF services. The overhaul aims to eliminate regulatory redundancies, streamline compliance processes, and consolidate trading provisions under a unified framework. Other key changes include the removal of obsolete market-making provisions and enhanced operational flexibility for exchanges and market participants.
SEBI's reform initiative is the second phase of its ease-of-doing-business measures, following a consultation paper released in October. Stakeholders have until January 30, 2026, to submit their comments on the proposals. These revisions aim to modernize the regulatory landscape, promote stronger compliance, improve capital buffers, and enhance investor protection.
