MCX-SX circular on Penalty for failure to maintain minimum prescribed Networth
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Jul 15, 2026, 3:31:26 AM (9 days ago) Jul 15
to UPDATES from SecMark
Date of Issue: 13-07-2026
Highlights of the Circular :
This is in continuation of Exchange Circular No. MSE/INSP/18897/2026 dated April 17, 2026, issued with respect to uniformed disciplinary actions across the Exchanges.
Regulation 10 (g) of Chapter II of the Securities and Exchange Board of India (Stock Brokers) Regulations, 2026 (SB Regulations), governing the “Registration of Stock Brokers”, stipulates that the certificate of registration granted under Regulation 7 is subject to the condition that the Stock Broker maintains the minimum networth specified under Chapter X of the said Regulations. Accordingly, all Trading Members are required to maintain the minimum prescribed networth at all times in compliance with the SB Regulations and such other requirements as may be specified by the Exchange from time to time.
Trading members are required to submit Networth to the Exchange on half yearly basis (as on March 31st and September 30th) and an audited Networth annually as on March 31st. It is observed that in case of shortfall in Networth as on March 31st/September 30th, trading members also submits a revised Networth certificate as of a later date, meeting the minimum networth requirements while reporting of shortfall of networth.
In furtherance of the objective of ensuring compliance with requirement of meeting minimum Networth by trading members at all times, Exchanges jointly decided to introduce a penalty in cases of shortfall of networth reported during the periodical submissions to the Exchange. The penalty structure as stated in Table 1 in the circular shall be applicable for reporting of networth shortfall by trading members during periodic submission:
The above penalty provisions shall come into force with immediate effect and shall apply on all cases under process / all non-compliances identified or determined after the date of the circular.
In addition to above, as stated in Annexure 1.1 of Exchange Circular No. MSE/INSP/18897/2026 dated April 17, 2026, action mentioned in Table 2 in the circular shall also be applicable for shortfall of Networth identified by Exchange during member inspection.
Members are advised to take note of the same and ensure adherence to the compliance requirements.
Highlights of the Circular :
This is in continuation of Exchange Circular No. MSE/INSP/18897/2026 dated April 17, 2026, issued with respect to uniformed disciplinary actions across the Exchanges.
Regulation 10 (g) of Chapter II of the Securities and Exchange Board of India (Stock Brokers) Regulations, 2026 (SB Regulations), governing the “Registration of Stock Brokers”, stipulates that the certificate of registration granted under Regulation 7 is subject to the condition that the Stock Broker maintains the minimum networth specified under Chapter X of the said Regulations. Accordingly, all Trading Members are required to maintain the minimum prescribed networth at all times in compliance with the SB Regulations and such other requirements as may be specified by the Exchange from time to time.
Trading members are required to submit Networth to the Exchange on half yearly basis (as on March 31st and September 30th) and an audited Networth annually as on March 31st. It is observed that in case of shortfall in Networth as on March 31st/September 30th, trading members also submits a revised Networth certificate as of a later date, meeting the minimum networth requirements while reporting of shortfall of networth.
In furtherance of the objective of ensuring compliance with requirement of meeting minimum Networth by trading members at all times, Exchanges jointly decided to introduce a penalty in cases of shortfall of networth reported during the periodical submissions to the Exchange. The penalty structure as stated in Table 1 in the circular shall be applicable for reporting of networth shortfall by trading members during periodic submission:
The above penalty provisions shall come into force with immediate effect and shall apply on all cases under process / all non-compliances identified or determined after the date of the circular.
In addition to above, as stated in Annexure 1.1 of Exchange Circular No. MSE/INSP/18897/2026 dated April 17, 2026, action mentioned in Table 2 in the circular shall also be applicable for shortfall of Networth identified by Exchange during member inspection.
Members are advised to take note of the same and ensure adherence to the compliance requirements.
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