Mumbai: The Securities and Exchange Board of India (Sebi) is all set to reduce the charges levied on intermediaries to lighten their regulatory burden, said two people with direct knowledge of the matter, requesting anonymity. It may, however, increase the levy on stock exchanges.
The committee set up by the markets regulator last year has submitted its report last month recommending that Sebi reduces the charges it levies on brokers and for filing documents, said the first person cited above.
The panel has recommended reducing the regulatory levy on stock brokers by more than 30%, on commodity brokers by 60% and for filling public issues by 50%, they added.
The changes in the fee structure comes at a time when Sebi’s income from intermediaries has increased marginally.
The V.K. Chopra committee set up in 2007-08, had recommended that Sebi periodically recalibrates its fees to be realistic to the changing activities and its resources. Since then, the market regulator has carried out four or five such recalibration exercises. For example, in 2014-15, it had increased the fees when its revenues were declining.
In 2017-18, Sebi had ₹1,738 crore in its corpus, or 4% more than what it had in FY17.
“The projected income for this fiscal year stands close to ₹1,200 crore. This reduction is due to the one-time expenditure of nearly ₹1,000 crore to purchase the adjoining IDBI Bank building," said the second person.
“The Sebi internal committee headed by whole-time member S.K. Mohanty recommended the fee reductions. Currently, brokers pay ₹15 for a turnover of ₹1 crore. It may reduce it to ₹10 per crore. For agricommodity brokers it may reduce to ₹1 per crore. The fees for filing and re-filing issues may also reduce by 50%. It is likely to adopt the recommendations in April," said the first person.
Sebi generates revenue from intermediaries when they file applications for registration, renewal, based on broker turnover, filing offer documents, listing fees from stock exchanges, informal guidance and regulatory fees on exchanges, among others. To offset the loss due to the reduction of these fees, Sebi may increase the levy on stock exchanges.
“Sebi may remove the ceiling and introduce a small percentage of their turnover as the regulatory fee. This will ensure that exchanges with higher turnover will pay more compared with the other exchanges. Exchanges will also be asked to pass on the benefit to the trading members," said the second person.
“Sebi is also planning to recruit at least 100 employees every year for the next three years to deal with the increasing workload, and to enhance surveillance and market intelligence efforts," the second person added.