NSE tweaks transaction charges for ETFs, equity derivatives

By: | Published: June 29, 2016 2:28 PM

Aiming to create more depth and liquidity in exchange traded funds (ETFs) and equity derivatives, NSE will give discounts in transaction charges of these segments for three months starting from July 1.

Trading members need to add a minimum of 25 clients each month. (Reuters)Trading members need to add a minimum of 25 clients each month. (Reuters)

Aiming to create more depth and liquidity in exchange traded funds (ETFs) and equity derivatives, NSE will give discounts in transaction charges of these segments for three months starting from July 1.

The move will also help incentivise trading members to develop retail participation through ETF in Systematic Investment Plan (SIP).

In separate circulars, National Stock Exchange (NSE) said it has decided to “reduce the transaction charges” in equity based ETFs and equity options segments for a period of three months, effective from July 1 to September 30, 2016.

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ETFs are group of securities which are traded like individual stocks on an exchange.

They can track equity indices, bonds and commodities among others.

ETFs have been present in the Indian equity markets for over a decade.

The exchange has been actively involved in creating awareness about equity ETFs as a simple and efficient asset class for investors.

The exchange said it will impose a fee of Rs 200 per Rs 1 crore on monthly turnover of between Rs 25 crore and Rs 50 crore, and Rs 150 per Rs 1 crore for monthly turnover of above Rs 50 crore up to Rs 100 crore.

It will levy a fee of Rs 100 per Rs 1 crore on the incremental billable monthly turnover of over Rs 100 crore.

“It is decided to incentivise trading members who register new clients to ETF category with SIP for a minimum period of three months at Rs 100 per client,” NSE said.

Trading members need to add a minimum of 25 clients each month.

Spelling out the criteria for new clients, the exchange said, the client should be trading for the first time in ETF category with a minimum SIP of Rs 2,000 each month for a period of at least three months.

In equity options, NSE will give a flat concession of 40 per cent in the transaction charges levied on the incremental billable volume, or Premium value, above Rs 1,500 crore in a month for a period of three months beginning July 1.

Further, a concession of 20 per cent will be levied on turnover ranging Rs 750 crore to Rs 1,500 and 10 per cent on turnover between Rs 500 crore and Rs 750 crore.

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