IFSCA Tightens Liquid Net Worth Rules for Brokers, Focuses on Usable Capital

• IFSCA clarified liquid net worth computation for capital market intermediaries in IFSCs, addressing broker concerns on the September 2025 framework.
• The new rules shift focus from headline capital adequacy to readily usable capital, emphasizing liquidity over mere solvency for market stability.
• The December 30 circular standardizes calculation: including cash, bank balances, government securities; excluding fixed assets, group investments, and intangibles.
• The clarification aims to prevent liquidity crises during market volatility, requiring intermediaries to hold more cash-like buffers.
• Smaller brokerages and those relying on illiquid assets are most affected, potentially needing to adjust capital deployment strategies.

Why It Matters: IFSCA's new rules ensure brokers hold truly liquid capital, enhancing market resilience and transparency.