A price war among Indian stock exchanges has begun. On Wednesday market leader National Stock Exchange (NSE) announced lower transaction charges.
Two day earlier, new entrant MCX-SX set its transaction charges below the rival's. NSE's new costs will apply from October 1.
In a press release NSE said it would allow “set off“ of annual subscription charges against the transaction fee of members in the capital market segment. Also, any unutilised amount at the end of the year will be carried forward.
Similarly, in the equity derivatives segment, any unutilised amount of the advance F&O (futures & options) charges at the end of the year will be carried forward.
Currently, NSE levies Rs 1 lakh per annum as capital market annual subscription charge on corporate members and Rs 50,000 on non-corporate members. Further, an amount of Rs 1 lakh is levied as advance minimum transactions charge in the F&O segment.
The Association of National Exchanges Members of India (Anmi), which represents the stock broking fraternity, welcomed the NSE move, saying the reduced costs will help the broking industry at a time when the markets are not showing any buoyancy.
The broking community was looking forward for a “big relief ” from the government in the form of removal of securities transaction tax (STT), rationalisation or even complete removal of stamp duty in the financial markets.
NSE statement said since its entry in 1996 the cost of transactions has come down dramatically. From Rs 10 per a lakh of trade, the costs came down to Rs 4 for above Rs 800 crore and Rs 7 for traded value up to Rs 200 crore in 2000. It dipped further to Rs 3.50 per lakh in 2005 and again to Rs 3.25 for a lakh of traded value up to Rs 1250 crore and Rs 3 for traded value above Rs 15,000 crore in 2009.