India’s market regulator, the Securities and Exchange Board of India (SEBI), has proposed a set of new regulations aimed at standardizing trading disclosures across the country’s stock and commodity exchanges. The move is intended to strengthen market transparency and improve investor protection while supporting liquidity in both equity and commodity markets.

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Uniform Disclosure Requirements for Indian Exchanges

SEBI announced plans to introduce a uniform set of trading-related disclosure requirements applicable across:

• India’s three stock exchanges
• Two commodity exchanges

The uniform disclosures are designed to standardize compliance, reduce regulatory complexity, and ensure that all market participants adhere to consistent reporting standards. This measure is expected to improve market efficiency and make trading data more accessible and transparent for investors and regulators alike.

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Higher Net-Worth Requirement for Margin Trading

In addition to disclosure reforms, SEBI has proposed raising the minimum net-worth requirement for stock brokers offering margin trading facilities:

• New requirement: 50 million Indian rupees (~$554,926.64 USD)
• Current requirement: 30 million rupees

This step is intended to strengthen the financial resilience of brokers and mitigate risks associated with leveraged trading. Brokers with higher net-worth are better positioned to handle market volatility and client exposures, safeguarding both investors and the broader market.

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Liquidity Enhancement Rules Extended to Commodity Derivatives

SEBI also proposed expanding liquidity enhancement schemes, which currently incentivize brokers in equity and equity derivatives, to include commodity derivatives. Key points of the proposal include:

• Schemes should boost trading volumes without creating artificial liquidity.
• Exchanges launching new segments may offer incentives up to 25% of their net worth in the first five years.
• After the initial period, incentives can be offered up to 25% of profits for the product.

These rules aim to encourage participation in new market segments while maintaining fair and transparent trading practices. They could particularly benefit India’s National Commodity and Derivatives Exchange (NCDEX), which is planning equity offerings in 2026.

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Market Implications

• Investors can expect greater transparency across stock and commodity markets.
• Brokers offering margin trading will need higher capital reserves, potentially improving market stability.
• Commodity exchanges may see increased participation due to liquidity incentives, provided they follow anti-manipulation safeguards.

SEBI’s proposals reflect its ongoing commitment to enhancing market integrity while supporting growth in India’s financial markets. Stakeholders are invited to provide feedback before the rules are finalized.

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Key Takeaways

• SEBI proposes uniform trading disclosures across stock and commodity exchanges.
• Minimum net-worth for brokers providing margin trading raised to 50 million rupees.
• Liquidity enhancement rules to be extended to commodity derivatives.
• New rules aim to boost transparency, market stability, and trading participation.