Anjaria Committee Recommendations on future fee structure for brokers

Press Release
Securities and Exchange Board of India
Aug 04, 2005
Press Releases


PR No.97/2005

Anjaria Committee Recommendations on future fee structure for brokers

The fee structure for the brokers prescribed in the regulations is based on the recommendations made way back in 1992 by the R. S. Bhatt Committee. Since then the market structure has witnessed sea change, which coupled with fierce competition among brokers, has brought down the level of brokerage drastically over the years. Hence, the fee structure prescribed in 1992 is not in tune with the level of brokerage prevailing after a decade. This necessitated a review of the fee structure for stock brokers. Accordingly SEBI appointed a committee under the Chairmanship of Mr. D. C. Anjaria to consider, in light of the present level of brokerage fees, a revision of future fee structure for the brokers, from the one laid down in the R. S. Bhatt Committee Report, to be applicable prospectively. The Committee was constituted on January 21, 2002. The Committee had representations from broker associations, the Exchanges, the Institute of Chartered Accountants of India, the Investor Grievance Forum and SEBI. The report of the Committee has been placed on SEBI’s website for public comments.


The main recommendations of the Committee are:


  1. The recommended fee structure may apply to all brokers in the derivatives segment and to new brokers in the cash segment.


  1. All types of transactions without any exception may attract fees, as all transactions require supervision of SEBI.


  1. The fees may roughly constitute 1% of prevalent brokerage rates. However, there need not be any direct relationship between the level of fees and the brokerage income.


  1. The fees may be different for each major market segment – Cash Equity, Cash Debt and Derivatives, as each market segment is unique and requires a different level of supervision from SEBI.


  1. The brokers in cash equity, cash debt and derivative segments may pay fees at the rate of Rs. 100, Rs. 5 and Rs. 50 respectively per Rs. 1 crore of turnover (value of transactions put through or reported by the broker to any of the Exchanges). 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 consider the upward revision of fees in a phased manner by increasing from Rs. 10/- per Rs. 1 crore of turnover to Rs. 20/- per Rs. 1 crore of turnover, in the first instance. Over a period of time, it may be increased to Rs. 50 per Rs. 1 crore of turnover.


  1. The Exchanges may collect the fees from the brokers by debiting the brokers’ account on a monthly basis, and remit the same to SEBI.


The comments on this report may please be e-mailed at on or before August 20, 2005.



August 04, 2005