Broking stocks in focus: Broking company stocks were under pressure on Tuesday, July 02, after Securities Exchange Board of India (Sebi) directed Market infrastructure institutions (MIIs), exchanges to levy the same fees.
As of 9:30 AM, broking company stocks including Angel One, IIFL Securities, 5Paisa Capital, SMC Global, Motilal Oswal Financial Services and Geojit Financial Services fell in the range of 2–11 per cent. In comparison, BSE Sensex was trading at record levels, up 0.23 per cent at 79,662.64.
Among them, Angel One was the top loser, falling as much as 10.50 per cent to hit an intraday low of Rs 2,307.95 per share. IIFL Securities followed closely with a loss of 7.44 per cent. The stock fell to an intraday low of Rs 195.20 per share.
Among other stocks, 5Paisa fell 4.5 per cent, SMC Global (down 2.4 per cent) and Motilal Oswal Financial Services (down 2.81 per cent), and Geojit Financial Services (down 2.8 per cent).
What did Sebi say exactly? Securities and Exchange Board of India (Sebi) has instructed stock exchanges and other market infrastructure institutions (MIIs) to discontinue their current practice of imposing slab-wise fee structures.
Instead, they are now mandated to implement a uniform fee regime, applicable uniformly to all market participants, particularly brokers. Currently, exchanges charge trading members varying fees based on turnover in both cash and derivatives segments.
This structure aims to incentivise brokers with higher turnover. Sebi argues that this approach contradicts principles of fair and transparent market access for all participants.
Sebi expressed concerns that the existing slab-wise fees create disparities among market participants based on their size, thereby compromising fair access.
Additionally, Sebi noted discrepancies where brokers charge their clients daily but settle fees with exchanges monthly, potentially leading to confusion or misleading disclosures about charges to end clients.
Sebi further stressed upon the need for charges paid by MIIs to be accurately reflected, ensuring consistency with what brokers pass on to their clients. The new directive mandates a uniform fee structure across all members of MIIs, regardless of their trading volume or activity levels. This change is slated to take effect from October 1, 2024.
Sebi’s decision is set to reshape the revenue models of exchanges and clearing corporations, potentially altering fee structures for top-tier clients.
Sebi has urged MIIs to design the new fee structure with a view to reducing charges for end clients, while ensuring fairness and transparency across the market.
First Published: Jul 02 2024 | 9:38 AM IST
