Sebi to levy fee on bourses

The Securities and Exchange Board of India ( Sebi) proposes to levy fee on stock exchanges.

According to market sources, the board is in the process of finalising the decision, which will later be communicated to the exchanges. The charges will be pegged to the turnover of the stock exchanges.

It is for the first time that the market regulator will be charging the stock exchanges. Till now, various activities on stock exchanges were charged by the government in form of levying securities transaction tax on deals and fees to brokers.

The new fee will instead be a charge on the stock exchanges directly.

Some section of the market feel that the system puts stock exchanges at par with other market intermediaries.

On the other hand, since stock exchanges act as a platform and supervise the activities of brokers and other market participants, they assume the status of semi-regulatory body.

Earlier this year, in a paper released by the Sebi, it mentioned setting up of Self-Regulatory Organisations (SROs) such as stock exchanges to collect fee from brokers on behalf of market regulator.

The paper said that while stock exchanges were collecting transaction charges from brokers based on turnover, Sebi was also collecting registration fees based on turnover.

Since it was a duplication of effort, the Sebi paper suggested that exchanges should collect registration fees on behalf of the market regulator while collecting transaction charges.

The paper further said: "In case a stockbroker fails to pay the fee, Sebi will ask the stock exchange concerned to pay the fee and similarly, if a sub-broker fails to pay the fee, the concerned brokers have to pay the fee."

For a single market intermediary, having registered with the Sebi for multiple activities, the paper called for integrated registration. It means that a unique registration number to each entity and suffix it by an alpha-numeric code to indicate the kind of activity, the intermediary is permitted to carry on.

"In case an intermediary fails to pay the fee within 30 days of the deadline, it will automatically cease to do business. The onus should be on the intermediary to ascertain and ensure that it has paid the fees fully to the Sebi in compliance with the regulations," the paper said.