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Post the update, the shares of BSE fell nearly 3% on NSE to a low of Rs 2,502.80.
Based on discussions with the advisory committee, SEBI asked Market Infrastructure Institutions (MIIs) to ensure that the charges recovered from end clients are true to label, meaning the exact amount levied by members is received by MIIs. The charge structure should be uniform for all members and should initially consider existing per unit charges to benefit end clients through reduced costs.
“Accordingly, MIIs are directed to: a. Redesign the existing charge structure and associated processes to comply with the aforesaid principles; b. Take necessary steps to put in place requisite infrastructure and systems for implementation of the circular, including necessary amendments to the relevant bye-laws, rules and regulations; c. Bring the provisions of this circular to the notice of their members and also disseminate the same on their website; and d. Communicate to SEBI, the status of implementation of the provisions of this circular,” said SEBI in its circular.
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Under the existing processes related to charges levied by the MIIs on their members (i.e. stock brokers, depository participants, clearing members), a volume based slab-wise charge structure is followed by some MIIs. These charges are levied in lieu of various services offered by MIIs and are recovered from the end clients by the members.
The members generally recover such charges from the end clients on a daily basis whereas MIIs receive aggregate charges from the members on a monthly basis.
This often results in a situation wherein the aggregated charges collected by the members from the end clients is higher than the end of month charges paid to the MII (due to slab benefit). This can also result in an incorrect or misleading disclosure to the end client about the charges levied by MIIs.
As per the SEBI’s circular, the changes would be effective from October 1, 2024.
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Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.
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