What Sebi’s trading rules revamp means

The Securities and Exchange Board of India (Sebi) is proposing a major overhaul of trading rules, by simplifying longstanding regulations and shifting more day-to-day supervision to stock exchanges.

- Apoorva Ajith

In a consultation paper released on Friday, Sebi proposed merging existing trading norms into a single consolidated circular. This would be done by revising the Master Circular for Stock Exchanges and Clearing Corporations (MSECC) and the Master Circular for Commodity Derivatives (MCCD). The aim is to streamline compliance, remove outdated provisions, and update norms that are more than a decade old. Mint explains what Sebi is proposing and why it matters for stock exchanges.

The consultation paper outlines a broad set of operational and regulatory changes. Among the most significant is a proposal to raise the minimum net-worth requirement for brokers offering the margin trading facility (MTF) from ₹3 crore to ₹5 crore—or higher, if exchanges choose to prescribe stricter norms.

The existing threshold was first introduced in 2004 and was last reviewed in 2022.

Other proposals include:

Aligning timelines for submission of net-worth statements and auditor certificates

Removing market-making provisions no longer in use

Bringing liquidity enhancement schemes (LES) under a single, principle-based framework