Despite lack of spread in equity cult in the country rising volumes on exchanges, booming primary market during 2007-08 and increase in corporate restructuring has resulted in hefty fee income for market regulator.
Total fee income of the Sebi has been almost doubled in FY08 from Rs 200.83 crore to Rs 397.49 crore.
Highest contribution is from offer documents and prospectus and the fee income on this count has gone up from Rs 34.45 crore to Rs 84.91 crore. Derivative segment contributed most in fee income of regulator. It has gone up from Rs 10.77 crore to Rs 64.31 crore.
Fees from takeover were Rs 65 crore during the year. Share broking community contributed Rs 64 crore to the fee income.
SEBI mainly operates out of the fees collected by it from transactions and intermediaries in the securities market and also interest from a corpus which it has accumulated from past fees and some interest free loans from public sector institutions. Around three years back SEBI increased its fees, and in light of the boom in the markets, the amount collected dramatically increased. “This in fact reached unnecessary level as operating costs of SEBI have hovered well below Rs 50 crore,” said knowledgeable source.
The bloating corpus resulted in caps being introduced in the fees. Since, fees still continued to gallop, they were reduced comprehensively around the middle of this year (by 50 to 90%) based on a VK Chopra committee report.