SEBI proposes uniform trading disclosure for margin trading, higher net-worth

India’s markets regulator on Friday proposed issuing a uniform set of trading-related disclosure requirements to India’s three stock exchanges and two commodity exchanges to standardize compliance.

The Securities and Exchange Board of India, further, has recommended raising the net-worth requirement for stock brokers offering margin trading facility from the current 30 million rupees to a minimum of 50 million Indian rupees ($554,926.64).

Sebi also proposed that the liquidity enhancement rules, which are financial incentives for brokers to boost ‘trading’ volumes, which are currently used for equities and equity derivatives, should be extended to commodity derivatives as well.

Such schemes should not create artificial volume, remove liquidity from the market and should not be manipulative in nature, the regulator said.

Any exchange starting a new segment can provide incentives of up to 25% of their net worth in the first five years, after which they can provide incentives of up to 25% of their profits for production, SEBI said.

The proposal could benefit India’s National Commodity and Derivatives Exchange (NCDEX), which plans to launch an equity offering this year.

($1 = 90.1020 Indian Rupees)