The Hindu Business Line : SEBI panel suggests changes in broker fee

THE Securities and Exchange Board of India is seeking to modify the calculation of brokerage fee in order to modernise it and make it relevant to current market conditions.

According to the recommendations of a SEBI committee headed by Mr D.C. Anjaria, broker's fee roughly constitutes one per cent of prevalent average brokerage rates.

However, there need not be any direct relationship between the level of fees and the brokerage income.

The brokers in the cash equity, cash debt, and derivative segments would have to pay fees at the rate of Rs 100, Rs 5 and Rs 50 respectively for Rs 1 crore of market turnover.

"Since the recommended rate in the derivative segment is substantially higher than the current level of Rs 10 per Rs 1 crore of turnover, the SEBI may consider the upward revision of fees in a phased manner by increasing from Rs 10 per Rs 1 crore of broker turnover as currently defined to Rs 20 per Rs 1 crore of market turnover as now defined by the committee, in the first instance. Over a period of time, it may be increased to Rs 50 per Rs 1 crore of market turnover," the report said.

The committee has suggested a review of the fee structure every three years.

The exchanges would collect the fees directly from the brokers by debiting the brokers' account on a monthly basis, and remit this to the SEBI.

It is for the broker to decide whether to pass on the fee liability to their clients, the committee said.

The committee has also suggested renaming the fee as `SEBI Broker Registration Fee'.

Brokers will be liable for payment of fees for all transactions put through or reported to any of the recognised exchanges in the country.

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