New Delhi, April 29 -- The Securities and Exchange Board of India (Sebi) has proposed changes to the way variable net worth is calculated for stockbrokers. The move is intended to align net worth requirements for the market intermediary with their client base and their potential risk profile.

In a consultation paper issued last week, the market regulator said the current method of calculating variable net worth no longer reflects a stockbroker's operational risks. Variable net worth is additional capital that brokers must maintain to cover operational and financial risks not addressed by margin requirements.

Mint explains how the proposed changes could impact stockbrokers and investors.

Sebi has tightened capital requirements for stock...