Revises slab structure; move to drive up volumes, especially in non-agricultural segment.
The National Commodity and Derivatives Exchange ( NCDEX), for the first time since 2007 and after several trials in between including seeking court intervention, has finally cut transaction charges across categories and revised slab structure for transaction charges as well.
The move, widely perceived to be a measure to drive up volumes, especially in the non-agri segment and also to facilitate accessibility of the commodity markets to retail and low-end customers, the exchange has halved charges from a high of Rs 4 per lakh to Rs 2 per lakh and for the higher end, from Rs 1 to 0.50 paise.
Exchange officials said this move follows growing volumes on the exchange and aims at facilitating higher trades and getting retail customers.
According to the circular in 2007, members had to pay Rs 4 per lakh for average daily turnover (ADTV) of Rs 20 crore followed by Rs 3 per lakh for incremental ADTV above Rs 20 crore to Rs 50 crore; Rs 2 for transactions above Rs 50 crore to Rs 125 crore and Rs 1 per lakh for ADTV above Rs 125 crore.
Under the revised structure now, a member will pay Rs 2 per lakh for transactions up to Rs 100 crore, followed by Rs 1 for ADTV above Rs 100 crore up to Rs 200 crore and 0.50 paise for ADTV above Rs 200 crore.
In the process of revising the fee structure downwards, the national exchange has also brought down four-tier slab structure to three tier, one with widening the base for transaction to be done at minimum fee of 0.50 paisa from Rs 125 crore to Rs 200 crore.The bracket for the trades to be done at Rs 2 per lakh has also been increased five times from Rs 20 crore earlier to Rs 100 crore.
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ADTV for a member is calculated by taking the total value traded in a month and dividing it by number of trading days including Saturdays. According to the norms, every member is required to pay ADTV charges of Rs 50,000 every year which is set off against the transaction charges payable by the member for that particular year and unadjusted balance is carried forward.
Prior to this in 2009, NCDEX had decided to levy an uniform transaction fee of Rs 3 for a lakh for all commodities traded from 10 am to 5 pm and to Rs 2 per lakh in the second session between 5 pm to 11 pm.
However, the commodity market regulator the Forward Markets Commission (FMC), then had disapproved the offer as the revised charges fixing five paise fee for every Rs 1,00,000 turnover in the evening session was found to be violating the then norms and not in the best interest of the market.
According to FMC guidelines, commodity bourses can charge a maximum of Rs 4 and a minimum of Rs 1 for every Rs 1,00,000 turnover.