Quote on the latest SEBI circular to Market Infrastructure Institutions (MIIs) on slab-based charges and its impact on investors and traders by Mr Shripal Shah, MD & CEO, Kotak Securities
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Below the Quote on Charges levied by MII - True to Label by Mr Shripal Shah, MD & CEO, Kotak Securities
“SEBI's decision to abolish slab-based charges by stock exchanges is one more step towards transparency in the broking industry. This move ensures that investors will be charged exactly what brokers pay to the exchanges, promoting a fairer fee structure.
Currently, the slab-based charge system allows brokers to pay lower rates to exchanges while passing higher slab charges to investors, generating additional income akin to volume-based rebates. Under the proposed changes, exchanges are expected to adopt a flat charge equivalent to their existing per unit fees. This adjustment aims to lower overall costs for clients, though it may reduce brokers' income.
However, this shift could compel some brokers to raise their brokerage charges. If these increases in brokerage rates exceed the savings from reduced exchange fees for clients, trading costs may rise and potentially impact trading volumes."
The proposed structure will also ensure equal and fair access to all market participants as all brokers will pay the same rate irrespective of their size differentials, thereby creating a level playing field.”
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