Mumbai: The Bombay Stock Exchange (BSE), Asia’s oldest bourse, on Monday reduced its transaction fees for the cash equity segment, matching National Stock Exchange’s move. NSE had in September cut transaction charges by around 10% in the cash and futures segments.
BSE said the transaction charges will be reduced from Rs3.50 per Rs1 lakh of trade to Rs2.25 for passive orders. For active orders, the reduction is less—from Rs3.50 per to Rs3.25. The new charges will come into effect from 7 October.
Matching moves: The Bombay Stock Exchange building in Mumbai. Abhijit Bhatlekar / Mint
Passive orders are defined as those already existing in the order book at the time of trade while active ones are fresh orders for buying or selling of stocks.
The BSE’s transaction charges will continue to include 1 paise on every Rs1 lakh of gross turnover for the trade guarantee fund and the investor protection fund.
NSE took the first step in lowering transaction fees in the cash as well as derivatives segments to attract more brokers both from the urban and rural areas. NSE has cut the transaction charges from Rs3.50 per Rs1 lakh traded to Rs3-3.25, effective 1 October.
In the futures and options segment, NSE reduced the transaction charges from Rs2 per Rs1 lakh of traded value to Rs1.75-1.90.
BSE has not revised its transaction fees for derivatives, in which its share is virtually nil. In the cash segment, its share is around 25%.
A BSE statement, quoting its managing director and chief executive Madhu Kannan, said: “With the new pricing framework coming into place... we are expecting to have more order flow from Indian and international investors. This also shows our commitment to the members that we will continue to strive to provide the most efficient trading platform while bringing down the cost of transactions considerably.”
Brokers are not too excited about the cut in transaction fees and said such small reductions may not make any significant difference in the cost of trading. The overall charges also include brokerage, turnover tax and securities transaction tax.