Focus on broking stocks: On Tuesday, July 02, the Securities Exchange Board of India (SEBI) ordered market infrastructure institutions (MIIs) and exchanges to charge the same fees, which put pressure on the stocks of broking companies.
Angel One, IIFL Securities, 5Paisa Capital, SMC Global, Motilal Oswal Financial Services, and Geojit Financial Services were among the brokerage companies whose stocks were down 2–11 percent as of 9:30 AM. By contrast, the BSE Sensex was up 0.23 percent at 79,662.64, trading at new highs. Here, Angel One was the worst performer among them, dropping as much as 10.50% to an intraday low of Rs 2,307.95 per share. IIFL Securities was closely behind with a 7.44 percent loss. The share price of the company dropped to an intraday low of Rs 195.20.
A few other equities that had a decline were 5Paisa, which fell 4.5%, SMC Global, which decreased 2.4%, Motilal Oswal Financial Services, which decreased 2.8%, and Geojit Financial Services, which decreased 2.8%.
Exactly what was said by Sebi? Stock exchanges and other Market Infrastructure Institutions (MIIs) have received instructions from the Securities and Exchange Board of India (SEBI) to stop enforcing slab-wise fee structures.
Rather, they are now required to establish a standard fee schedule that applies to all market players, especially brokers. Exchanges now impose different fees on trading members according to the volume of transactions in the cash and derivatives divisions. Brokers with higher turnover are intended to be encouraged by this arrangement. According to SEBI, this strategy goes against the fundamentals of equitable and transparent market access for all players.
Sebi voiced worries that the current slab-wise fees distort market players according to their size, undermining equitable access. Sebi also noticed inconsistencies where brokers charge their clients on a daily basis yet settle fees with exchanges on a monthly basis. This might cause end clients to get confused or receive false disclosures regarding costs.
Sebi also emphasized how important it is that the fees that MIIs pay be appropriately displayed in order to maintain consistency with the information that brokers provide to their clients. Regardless of their trading volume or activity levels, all members of MIIs must adhere to the same fee structure under the new guideline. This modification is expected to be effective from October 1, 2024.
