The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are set to implement revised transaction charges starting today. These new rates pertain to cash, equity futures and options, as well as currency derivatives. This adjustment is in compliance with a recent directive from the Securities and Exchange Board of India (SEBI), which mandates that market infrastructure institutions (MIIs), including stock exchanges, enforce uniform and equitable transaction charges for all participants in the market.
In July 2024, SEBI released a circular aimed at overhauling the previous slab-wise charge structure. The intention behind this revision is to enhance transparency and ensure fair access for all market participants. According to SEBI, the charges imposed on end clients by members—such as stock brokers, depository participants, and clearing members—must accurately reflect the costs incurred by these institutions. This means that MIIs must guarantee consistency in the fees charged by their members and the rates they themselves receive.
On Friday, the NSE and BSE announced the specifics of the new transaction fees for their trading segments. These changes will take effect on Tuesday, 1 October. The transition to flat rates will eliminate the disparities caused by the previous tiered fee structure, which was dependent on trading volume or activity level. This reform is expected to level the playing field by minimizing the benefits that brokers derived from size or high trading volumes, ultimately fostering a more transparent environment for investors.
| Trading Segment | True to Label Rate |
| Equity Futures | 0 |
| Sensex and Bankex Options | 3,250 |
| Sensex 50 and Stock Options | 500 |
Advantages of the Revised Transaction Rates
The newly established transaction rates are designed to replace the complicated slab-based fees that were previously implemented by various stock exchanges. These older fees permitted brokers and other transaction facilitators to exploit size-based advantages derived from clients’ trading activities, thereby enabling them to maintain a profit margin based on discrepancies between lower fees charged to exchanges (due to high volumes) and the higher rates passed on to clients.
Understanding the Impact on Investors
For instance, brokers could previously charge clients ₹49.50 per lakh of premium value for equity options while paying only ₹29.50 for the same transactions, due to the advantages afforded by higher trading volumes. The recent changes aim to minimize such discrepancies, thus promoting fairness and transparency for all end clients. Investors are expected to benefit from this shift, as they will no longer have to bear the burden of inflated charges attributable to their brokers’ negotiating power with the exchanges.
