New Delhi, Sept. 17 -- Stockbrokers have approached the Securities and Exchange Board of India (Sebi) to object to a proposed rule that would require them to hold extra capital based on client money they no longer actually keep with them, according to three people aware of the matter.

The regulator has proposed changes to the so-called variable net worth - a capital cushion every broker must maintain as a buffer against risks from its client business. Currently, this cushion is set at 10% of the average daily cash balance a broker holds on behalf of clients.

Sebi has proposed a change to that formula. Under a consultation paper issued in April, the cushion would instead be based on 10% of clients' average credit balance over the previou...