NSE tweaks transaction charges for ETFs, equity derivatives

Aiming to create more depth and liquidity in exchange traded funds (ETFs) and equity derivatives, NSE will give discounts in transaction charges of these segments for three months starting from July 1.
The move will also help incentivise trading members to develop retail participation through ETF in Systematic Investment Plan (SIP).
In separate circulars, National Stock Exchange (NSE) said it has decided to "reduce the transaction charges" in equity based ETFs and equity options segments for a period of three months, effective from July 1 to September 30, 2016.
ETFs are group of securities which are traded like individual stocks on an exchange. They can track equity indices, bonds and commodities among others.

ETFs have been present in the Indian equity markets for over a decade. The exchange has been actively involved in creating awareness about equity ETFs as a simple and efficient asset class for investors.
The exchange said it will impose a fee of Rs 200 per Rs 1 crore on monthly turnover of between Rs 25 crore and Rs 50 crore, and Rs 150 per Rs 1 crore for monthly turnover of above Rs 50 crore up to Rs 100 crore. It will levy a fee of Rs 100 per Rs 1 crore on the incremental billable monthly turnover of over Rs 100 crore.

"It is decided to incentivise trading members who register new clients to ETF category with SIP for a minimum period of three months at Rs 100 per client," NSE said.

Trading members need to add a minimum of 25 clients each month.
Spelling out the criteria for new clients, the exchange said, the client should be trading for the first time in ETF category with a minimum SIP of Rs 2,000 each month for a period of at least three months.
In equity options, NSE will give a flat concession of 40 per cent in the transaction charges levied on the incremental billable volume, or Premium value, above Rs 1,500 crore in a month for a period of three months beginning July 1.

(REOPENS DCM 19)
Separately, NSE said it will introduce a concession scheme in the transaction charges for 'far month contracts' in the currency derivatives segment for three months beginning July 1. Far month contracts refer to those that are set for expiry or settlement from third month and beyond.
In a circular, the exchange said it has decided "to introduce a concession scheme in the transaction charges for far month contracts in Currency Futures and Currency Options for the period of three months from July 1 to September 30".
Transaction charge of Rs 9 per Rs 1 crore of turnover will be applicable on Currency Futures, while a fee of Rs 100 per crore of premium turnover will be applicable on Currency Options.

On the expiry day of the near month contract, the third month contract will be excluded from the concession scheme.
"The expiry date of the near month June 2016 contract is June 27. On the expiry day of June 2016 contract, August 2016 contract will be excluded from the concession scheme and will trade with normal order of 1 contract," it added.
With regard to IRF, NSE is currently levying transaction charge of Rs 0.12 per lakh of volume in the segment.
Further, a contribution towards NSE Investor Protection Fund Trust is payable by the trading members at 0.000005 per cent (Rs 0.005 per lakh of the turnover) on each side.

These charges were valid till June 30. NSE said it has been decided now to continue the same for a further period of three months till September 30.
Also, the exchange has decided to broaden the base for the eligibility of MORE scheme for Currency Futures.
The MORE scheme was launched, last year, to reward trading members for maintaining high degree of governance standards on a continuous basis.
For all trades done in the Currency Futures segment, the exchange will continue to levy a transaction charge of Rs 1.10 per lakh of traded value in currency futures, while the same will be Rs 40 per lakh of premium value in currency options segment.

"The above scheme will be effective from July 1, 2016 to September 30, 2016," NSE said.