Share Buyback, STT, T+2 Bonus, NSE, BSE transaction charges: As domestic stock market continues to scale newer highs, there are a slew of changes slated to take effect from today, Tuesday, October 1.
Among the changes are uniform transaction fees for brokers, new buyback structure, higher tax on derivatives trades and faster trading of bonus issues.
In the cash market, NSE will levy a transaction fee of Rs 2.97 on each side per lakh of traded value while in equity futures, it will be Rs 1.73 each side per lakh of traded value. For equity options, the transaction fees will be Rs 35.03 on each side per lakh of premium value.
For Sensex and Bankex options contracts, the transaction fee is revised to Rs 3,250 per crore of the premium turnover value. However, there will be no changes in the transaction charges in other contracts of the equity derivatives segment.
The changes in fee structure came following a Securities and Exchange Board of India (SEBI) circular issued on July 1, 2024, in relation to charges levied by Market Infrastructure Institutions (MIIs).
A share buyback occurs when a company buys back its own shares from shareholders, which is often seen as a tax-efficient way to return money to investors.
These changes intends to shift the tax burden from companies to shareholders, allowing companies to use their funds for other purposes.
Under the new rules, the STT for trading futures will rise from 0.0125% to 0.02%, while options trading will be taxed at 0.1%.
This increase in STT is intended to discourage retail investors, as there has been a significant rise in retail derivative trading. Analysts believe that this hike may reduce trading volumes and market activity, which could negatively affect the revenues of exchanges and the SEBI.
From October 1 onward, T+2 trading of the bonus issue will take effect. This means that the shares allotted in the bonus issue will now be available for trading just two days after the record date.
Record date is the cut-off date for shareholders to be eligible for a bonus issue. The move intends to streamline the process of bonus issue of equity shares.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
2024-10-01T03:11:28Z dg43tfdfdgfd