BSE to appeal Sebi on option fee reversal

MUMBAI: The BSE will approach the Securities and Exchange Board of India (Sebi), urging it to reconsider its decision to impose a regulatory fee on notional turnover of options.

However, although this process is ongoing, the exchange has allocated 170 crore for fees till 2019 Capital market regulator decided its appeal, Sundararaman Ramamurthy told shareholders during a post-results conference call on Wednesday.

“…we will be requesting and making representations and submissions and appeals to the regulator to reconsider this decision, and are very hopeful that the regulator will listen to us. And, if that happens, it will be really good.”

Until now, BSE has been paying fees based on the premium turnover of options. Premium turnover is the option price multiplied by the lot size. Notional turnover, on the other hand, includes the strike price multiplied by the lot size and the option price. SEBI has been charging differential fees for the last 18 years.

other charges

Another major drag on the exchange’s profitability is clearing charges paid to NCL, NSE Clearing Corporation for clearing and settlement of trades executed on BSE, Ramamurthy said.

According to exchange sources, among these Dr 85 crore in clearing and settlement charges on equity options offered by BSE in FY24, 63-64 crore went to NCL. “We are also pleading that it should be reduced.”

However, earlier, Ashishkumar Chauhan, managing director and chief executive of NSE, said that the Clearing Corporation (NCL) charges the same fee to NSE and BSE for clearing and settling transactions on both the exchanges.

Equity index options – Sensex options – have seen tremendous gains since May 2023, when they were reformed and relaunched for Friday expiry.

In FY24, equity derivatives notional turnover on BSE increased 8,029 trillion to 343.15 trillion a year ago. NSE had comparable figures 79,928 trillion and 38,223 trillion for the period under consideration.

BSE also launched Bankex options last October, which expire every Monday in addition to monthly single stock futures contracts. which expires on the second Thursday of a month, with effect from 1 July 2024.

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Published: 09 May 2024, 10:16 PM IST

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