The Securities and Exchange Board of India has decided to allow stockbrokers to include the value of the membership card in their capital for the computation of networth. The proposed change is viewed as a step towards facilitating deposit-based membership on the stock exchanges.
The issue of including value of membership card as part of brokers' capital (in the context of demutualisation), was discussed in the meeting of Sebi's advisory committee on derivatives and market risk management.
The Sebi on Friday said, "Pending demutualisation of the stock exchanges, in those stock exchanges where the card-based membership is in place, the value of the membership card may be included as part of the member's capital for the computation of networth, subject to some specifications.
"The value of the card would be arrived at on the basis of the latest price obtained in auction/sale. The card will be included in the non-cash component of the capital."
However, the card value shall not be reckoned as part of the capital deposited by the stockbrokers with the exchange for the purpose of intra-day trading and gross exposure limits or for adjustment against margins.
The exchange shall maintain an amount equivalent to at least 50 per cent of the aggregate card value of all members in the form of cash and liquid assets, Sebi said.
