Capital Adequacy Norms

Capital Adequacy Norms The SEBI promulgated these norms in October 1993 to check excessive speculation by brokers in the country’s stock exchanges and directed the stock exchange authorities to amend their by laws and enforce the norms. These norms require the Bombay and Calcutta brokers to maintain a minimum deposit of Rs 5 lakh with the exchange authorities, the minimum for other exchanges being Rs 3.5 lakh for Delhi and Ahmedabad, and Rs 2 lakh for others. In addition to this, if any brokers’ business should at nay point be such that the base minimum deposit fell below 8% of the total outstanding business done, the broker would be required to increase the amount of deposit.

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