

Mint explainer: Unpacking Sebi’s new trading rules for stock exchanges
Subscribe to enjoy similar stories. The Securities and Exchange Board of India (Sebi) is proposing a major overhaul of trading rules that could reshape how Indian markets are regulated. The focus is on simplifying long-standing regulations and shifting more day-to-day supervision to stock exchanges.
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 The aim is to streamline compliance, remove outdated provisions, and update norms that are more than a decade old.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: LES and market-making schemes are designed to improve liquidity and price discovery, especially in thinly traded securities, by ensuring continuous buy-sell quotes and reducing sharp price swings. Many of the provisions Sebi is seeking to scrap or modify were created for a very different market structure.
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