The Securities and Exchange Board of India (Sebi) has proposed a significant overhaul of the method stockbrokers use to calculate their variable net worth. Currently, this net worth is based on 10% of the average daily client cash balance retained by brokers. However, due to the new upstreaming framework, which allows brokers to transfer client funds to clearing corporations, the cash balance retained by brokers has diminished. In response, Sebi is advocating for a more effective, risk-based calculation. The proposed method includes two main components: one linked to client funds and another based on the size of the client base. Brokers will be required to maintain 10% of the average credit balance of all clients over the previous six months. Additionally, brokers with 10,000 to 50,000 direct clients will need to maintain an extra ₹50 lakh (approximately $60,000 USD), with further increments for every additional 50,000 clients. This new approach aims to ensure that capital requirements are more closely aligned with the actual risks associated with brokers' operations.