SEBI Relaxes Timeline for Stock Brokers to Submit Net Worth Certificate for Offering Margin Trading Facility [Read Circular]
SEBI has directed stock exchanges to amend bye-laws and notify members about the revised timelines
The Securities and Exchange Board of India (SEBI) has promulgated a new circular, relaxing the timelines for submission of net worth certificates by stock brokers who offer margin trading facilities to clients.
The extension of the timeline was notified through Circular SEBI/HO/MRD/MRD-PoD-2/P/CIR/2025/120 dated August 26, 2025 which modified the earlier compliance schedule prescribed under the Master Circular for Stock Exchanges and Clearing Corporations (SECC) that was issued on December 30, 2024.
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Under the prior provision, brokers were required to submit to stock exchanges a half-yearly certificate from an auditor confirming their net worth as existent on March 31 and September 30 each year, while the certificates were to be filed by April 30 and October 31 respectively.
Following representations from market participants, SEBI effectuated such change which is also in line with the regulator’s aim to promote ease of doing business. The schedule has now been harmonized with the timelines for declaration of financial results under Regulation 33 of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015.
Following the changes, brokers shall be required to submit their net worth certificate within 60 days of the half year that ends on March 31 and within 45 days of the half year that ends on September 30. The regulator has however explicitly stated that no certificate must be submitted after the 31st of May and 15th of November, each year.
Additionally, SEBI has advised all recognised stock exchanges to amend their bye-laws, rules and regulations to give effect to the revised timelines and to disseminate this information widely to their members through official websites and communication channels.
Extension of Implementation Timeline for Margin Obligations Through Pledge & Re-Pledge Framework
This regulatory update comes following an earlier circular dated August 19, 2025, where the market regulator extended the implementation timeline for margin obligations to be fulfilled through the pledge and re-pledge framework in the depository system.
SEBI in that instance had postponed the effective date from September 1, 2025 to October 10, 2025 after representations from the depositories Central Depository Services (India) Limited (CDSL) and National Securities Depository Limited (NSDL) highlighted the need for system readiness and end-to-end testing.
SEBI has in both instances, realigned timelines and allowed additional breathing space to ensure smoother transitions without disrupting market functioning and continues to protect investor interests and uphold transparency in the securities market.
SEBI has clarified that the new timelines take effect immediately from the date of the circular.
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