F&O fee hike mooted

The Securities and Exchange Board of India (Sebi) appointed committee, has suggested different fee structures for different markets - cash equities, cash debt and derivatives segment.

The fees may roughly constitute one per cent of prevalent brokerage rates. It suggested a steep hike for the last segment at Rs 50 per Rs one crore of turnover from the present Rs 10.

"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)," the committee said under the chairmanship of DC Anjaria has recommended according to a Sebi release on Thursday.

"Since the recommended rate in the derivative-segment is substantially higher than the current level of Rs 10 per Rs one crore of turnover, Sebi may consider the upward revision of fees in a phased manner, by increasing from Rs 10 per Rs one crore of turnover, to Rs 20 per Rs one crore of turnover, in the first instance," the committee added.

The recommended fee structure will apply to all brokers in the derivatives segment and to new brokers in the cash segment. All types of transactions without any exception may attract fees as all transactions require supervision of Sebi.

The fees may roughly constitute one per cent of prevalent brokerage rates, but there need not be any direct relationship between the level of fees and the brokerage income, according to the committee.

As each market-segment is unique, and requires a different level of supervision by Sebi, the fee differed"�cash equity, cash debt and derivatives, 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 recommendations will be available for public comments till or before August 20, 2005.