SEBI increases BMC deposit for stock brokers

Market regulator, the Securities and Exchange Board of India (SEBI), has increased the Basic Minimum Capital (BMC) deposit for stock broker and trading members to up to Rs.50 lakh from the earlier maximum of Rs.10 lakh.

Various BMC fixed by SEBI:

• Rs.10 lakh for only proprietary trading without algorithmic trading (Algo)
• Rs.15 lakh for trading only on behalf of client (without proprietary trading) and without Algo
• Rs.25 lakh for proprietary trading and trading on behalf of client without Algo
• Rs.50 lakh for all trading members and brokers with Algo.

All stock brokers and trading members of exchanges having nation-wide trading terminals will be liable to this rule. For those not having nation-wide trading terminals, it would be 40% of the prescribed BMC deposit requirements.

Exchanges will not grant any exposure against the BMC deposit. Minimum 50% of the deposit shall be in the form of cash and cash equivalents.

Month: Current Affairs - December, 2012