Currently, the commodity exchanges are collecting transaction charges from investors as per average daily turnover in a slab system based on broad FMC norms.
On February 13, the regulator had issued a directive allowing exchanges to charge the fee based on delivery and non-delivery based contracts, following which NCDEX has slashed the fee.
In its latest circular, the Forward Markets Commission said: "There has been a consensus that exchanges should have freedom to fix transaction charges. This will promote competition in the market and bring in greater efficiencies and lower transaction costs to market participants."
Therefore, the previous directive has been modified to allow the national level exchanges to charge different transaction charges for different commodities contracts and even in the case of contracts of the same commodity, it said.
FMC said that the exchanges should ensure that the ratio between highest to lowest transaction charge in the turnover slab of any contract is not more than 1.5:1, it said.
In the slab system, the concessional transactional charges should be charged only on the incremental turnover and not on the entire turnover, it added.
While levying the transaction charges, FMC said that the exchanges should ensure that the fee is imposed in a fair and transparent manner without favouring selective trades or selective category of investors.
The exchanges should not encourage generation of artificial volumes and not result in any market irregularities, it added.
FMC has directed national level bourses - MCX, NCDEX, NMCE, ICEX, ACE and UCX - to make necessary amendments to their by-laws and submit the compliance report in this regard by tomorrow.
Currently the leading commodity exchange MCX charges a transaction fee of Rs 2.50 for every Rs 1 lakh of turnover for brokers generating monthly average daily traded value (ADTV) of Rs 250 crore.
Whereas the agri-commodity bourse NCDEX has recently reduced the fee sharply for non-delivery based contracts of gold and silver to Rs 0.40 from Rs 2 per 1 lakh of turnover up to ADTV of Rs 50 crore.
For delivery-based contracts, NCDEX has reduced the fee to Rs 1.95 from Rs 2, for every Rs 1 lakh of turnover for brokers generating monthly ADTV of up to Rs 200 crore.
According to industry players, the latest move will bring more competition to the market as exchanges might reduce transaction fee to attract more participation and turnover.
However, they said exchanges that generate revenue by collecting transaction fee, should not forget that a smart investor will also look at liquidity and product features before putting his money.