After being rapped by the competition watchdog, the National Stock Exchange has decided to charge transaction charges in the currency derivatives segment. The charges will be applicable from August 22.
"In deference to the order of Competition Commission of India against NSE and without prejudice to the rights and contentions of the exchange in the matter, it has been decided to levy transaction charges in the currency derivatives segment," the exchange said in a circular on Friday.
The move provided a lifeline to standalone currency exchanges, including MCX SX, which had claimed it was bleeding due to NSE's anti-competitive measures. While the exchange could cross-subsidise from earnings in equities segment, MCX SX said it had no such cushion and was incurring a loss of Rs 15 lakh per day of operation.
MCX SX is likely to levy the charge in its currency futures segment, but United Stock Exchange said it would take a call in a couple of days. “This is a positive development for the currency derivatives market and would encourage healthy competition. We welcome this move by NSE,” said Joseph Massey, MD & CEO, MCX-SX.
NSE said the members will have to pay between Rs 1 and Rs 1.15 for every lakh of turnover in the currency futures segment.
While members with monthly turnover of Rs 2,500 crore or less will pay a higher fee at the rate of Rs 1.15, those with higher turnover will pay less. In addition, five paise per lakh will be charged towards NSE investor protection fund trust.
On currency option contracts, members will pay a transaction fee between Rs 30 and Rs 40 on every lakh rupees of premium payable. Rs 2 per lakh of premium will go towards investor protection fund.
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Advance Transaction charges of Rs 50,000 per member per annum would be levied with effect from August 22, which would be set off against actual transaction charges payable by the member in the respective financial year.
Further, the exchange also set admission fee in respect of existing NSE members seeking CDS membership at Rs 1,00,000. New members will have to pay Rs 5,00,000.
NSE said the waiver currently in force was done to benefit the consumer and develop the market, adding it will challenge the CCI order, nevertheless.