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Proposed New Fee Structure for Brokers and Trading/ Clearing Members
� first applicable to new brokers
in the cash segment (those who are not covered under the existing fee
structure); � second applicable to existing and
new brokers in the derivatives segment; � third applicable to existing brokers
in the cash segment who have already paid or are paying fees for one or more
blocks of five financial years.
The Anjaria
Committee had interalia recommended fees at the rate
of Rs. 100 per Rs. 1 crore of turnover for new brokers
in the cash segment. This recommendation was based on a study of brokerage carried
out in the year 2003. Since then with growing competition, brokerages have
undergone a downward revision and public comments have also been received to
the effect that the assumptions made by Anjaria
Committee on the level of brokerage did not reflect the present level of
brokerages. It has accordingly been proposed to reduce the fees to 1/5th
of what was recommended by the Anjaria Committee for
the new brokers in the cash segment. The proposed new fee structure for new
brokers in the cash segment is given in the following table: Table I Proposed New Fee Structure for new brokers in the cash segment
(*subject to a minimum of Rs.
5,000 per year for the first five years and Rs. 5,000
for every block of five financial years commencing from the sixth financial
year after the date of grant of initial registration to keep his registration
in force.) 3.2 Existing and New brokers (trading and
clearing members) in the derivatives segment Unlike the brokers in the cash
segment who have been paying fees on a fixed tenure basis, the existing brokers
(trading and clearing members) in the derivatives segment are paying fees every
year based on their turnover. Initially the level of fee structure was decided
taking into account the nascent stage of development of the derivatives market
and the need to encourage its growth. Considering that the derivatives market
has grown significantly and the number of participants
including brokers have also increased, the Anjaria
Committee has recommended upward revision of fee from Rs.
10 per Rs. 1 crore of
turnover to Rs. 50 per Rs.
1 crore of turnover to be achieved in a phased
manner. It had also recommended that since the recommended rate in the
derivative segment is substantially higher than the current level of Rs. 10/- per Rs. 1 crore of turnover, SEBI may, in the first instance, consider
upward revision of fees in a phased manner by increasing from Rs. 10/- per Rs. 1 crore of turnover as currently defined to Rs. 20/- per Rs. 1 crore of turnover as now defined by the Committee. After
discussing with the representatives of brokers, it is proposed to increase the
fees from Rs. 10 per Rs. 1 crore of turnover to Rs. 20 per Rs. 1 crore of turnover. The proposed new fee structure for new
brokers in the cash segment is given in the following table: Table II Proposed New Fee Structure for Existing and New brokers (trading and
clearing members) in the derivatives segment
3.3 Existing
brokers in the cash segment 3.3.1 It has been represented to
SEBI in the public comments that the recommendation of the Anjaria
Committee to charge fees annually to new brokers while allowing the existing brokers
not to pay any further fees over and above what has been paid for the fixed
tenure of five years, would mean uneven competition between the new and
existing brokers. Suggestions have therefore been received for introducing a
base minimum level of fees to the existing brokers. The amount of the fees on
the existing brokers would be such it will not impose a significant financial burden
on the existing brokers, while at the same time, ensure
that all brokers in the cash segment are placed on an equal footing. 3.3.2 It is proposed that: � such of those existing brokers who
are paying turnover based fees for the first block of five financial years
under the existing fee structure would be given an option to switch over to the
proposed new fee structure immediately or after the completion of ten financial
years from the date of grant of registration by the Board; � such of those existing brokers who
have who have already paid fees for the first block of five financial years
would be given an option to switch over to the proposed new fee structure
immediately or after the completion of the current block of five financial
years. 3.3.3 It may be mentioned here
that even if a broker shifts to the new fee structure on a prospective date, it
would be required to pay the outstanding fee liability, if any, up to the date
of such switch over to the proposed new fee structure.
The Exchange / clearing corporation mechanism will be
used to collect SEBI fees from brokers. Any transaction in securities,
irrespective of the type of transaction or mode of transaction would attract
fees as per proposed new fee structure. The broker will be under obligation to
report off-market transactions, if any, to the concerned Exchange. For this
purpose, all transactions in securities which are carried out by the broker
outside the exchange would mean off-market transaction.� Exchange / clearing corporation shall be used
to compute and recover SEBI fees from the brokers / Trading Members / Clearing
Members and remit the same to SEBI by 5th working day of next month.    | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||