Zero brokerage plans nearing expiry
Zero brokerage as a service perquisite could well be a thing of the past as regulatory changes, such as Tuesday's new measures aimed at curbing the F&O frenzy, push up transaction charges and cause trading volumes to decline.
Angel One, India's third-largest brokerage by client count, introduced a flat fee of ₹20 or 0.1% of turnover (whichever is lower) on cash market transactions starting November 1, anticipating a drop in revenues from the derivative segment. Previously, these transactions were free of charge.
Market participants expect other brokerages to raise their fees, which could take the sheen off discount broking that had broken the stranglehold of big banks.
«In the changing environment, it is no longer easy for the broking industry to survive on such low fees,» said Dhiraj Relli, MD, HDFC Securities. «Fees will have to increase, especially for discount broking firms, as they have been relying on F&O volumes, which are likely to be impacted by the new Sebi circular.»
Sebi, in a July 1 circular, stated that Market Infrastructure Institutions (MIIs) must ensure that the fees charged by members are equal to the fees charged to customers. It further mandated that the charges must be uniform and consistent, regardless of the volume or activity of the members. MIIs include stock exchanges, clearing corporations, and depositories.
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