Country India's leading stock exchanges BSE and NSE on Friday revised their transaction charges for cash and futures and options (F&O) deals. The move came after the Securities and Exchange Board of India (SEBI) mandated a uniform fee structure for all members of institutions dealing with market infrastructure, including stock exchanges. Stock exchanges said in separate circulars that the revised rates will be applicable from October 1. BSE has revised the transaction charges for Sensex and Bankex options contracts in the equity futures-options segment to Rs 3,250 per crore premium traded. However, transaction fees for other contracts in the equity futures-options segment will remain unchanged.
SEBI had issued circular
SEBI had issued a circular in July regarding charges for Market Infrastructure Institutions (MIIs). It said MII should have a uniform fee structure for all members, replacing the existing volume-based system of trading. Let us tell you that Budget 2024 has increased the Securities Transaction Tax (STT) on Futures and Options (F&O) by 0.02 percent and 0.1 percent respectively. Also, the income received from share buyback will be taxable to the beneficiaries. This change will become effective from October 1, 2024. However, doubling the tax on trades may reduce transaction volumes. On the other hand, higher taxes would also increase investors' profit margins, potentially inducing them to take more risks.
Why were these steps taken?
SEBI has taken these steps to protect the interests of investors and reduce speculation in the stock market. SEBI says that in the year 2024, about 91 percent of F&O traders have suffered a total loss of ₹75,000 crore in risky trades. Moreover, the flood of liquidity and enthusiasm of retail investors is becoming a lethal combination for the world's most expensive equity market. Industry experts consider these changes necessary for a sustainable investment scenario in the country as well as balanced and orderly development of the capital market.
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