Mumbai: Looking to bring in more liquidity in derivatives, leading stock exchange NSE has significantly lowered transaction charges in equity options and currency derivatives. Trading members will now have to pay a flat Rs2,500 transaction fee for a month on a billable monthly turnover or premium value of up to Rs3 crore in equity options.
The move follows changes in transaction charges by rival BSE, which has started charging on per trade basis in certain segments. Besides, the BSE has been gaining market share in the currency derivatives space.
Furthermore, the NSE has introduced a slab-based structure for turnover above Rs3 crore. Under the structure, transaction charges per lakh of premium value will fall as turnover increases. So far, the NSE levied a transaction fee of Rs5,000 on billable turnover of up to Rs1 crore in equity options and gave incentives for trades over Rs1 crore.
At the same time, the NSE has also lowered transaction charges for currency derivatives trades and has put in place a slab-based mechanism, a move which will help reduce trading and hedging costs for various entities, including small and medium enterprises.
The fee starts at Rs110 per crore of traded value for incremental monthly turnover of up to Rs1,000 crore in the currency derivatives and comes down as turnover rises. The transaction charges for currency derivatives had been linked to traded value and compliance points.
The NSE’s move, which was announced through separate circulars, is based on market feedback and is expected to benefit small and big market players as well as encourage more investor participation. “The reduction in the transactions charges in response to feedback from markets will encourage more participation and is very inclusive as it would benefit both small and large investors and members,” an NSE spokesperson said. “This reduction will make Indian markets more competitive and would encourage wider participation, thereby infusing more liquidity.”
As per the new slab structure in the equity options segment, incremental billable monthly turnover or premium value between Rs3 crore and Rs100 crore will attract Rs50 per lakh as transaction charges. Similarly, transaction charges will be Rs47.50 for turnover between Rs100 crore and Rs750 crore, Rs42.50 for Rs750-1,500 crore, Rs37.50 for Rs1,500-2,000 crore and Rs30 for over Rs2,000 crore.
Under the slab-based mechanism for currency futures, incremental monthly turnover of up to Rs 1,000 crore will attract Rs110 for every one crore of traded value. The transaction charges for currency futures range from Rs110 to as low as Rs30 as the trading value goes up.
For currency options, the transaction fee has been fixed at Rs4,000 per crore of trade value for incremental monthly premium turnover of up to Rs50 crore. As trade value rises above Rs50 crore, the transaction fee is lowered by Rs500 for each slab.