ANGEL ONE SET TO END ZERO BROKERAGE MODEL
With the Securities and Exchange Board of India (Sebi)’s ‘true to label’ rules and the stock exchanges’ revised transaction rates taking effect on Tuesday, most brokerage houses have started adjusting transaction charges while keeping brokerage fees unchanged.
However, discount broking firm Angel One has decided to implement a new structure for brokerage charges on cash and equity delivery transactions from November 1. Fees will be set at a flat rate of Rs 20 or 0.1% + GST, whichever is lower, per executed order, effectively moving away from the zero brokerage model.
In contrast, Zerodha founder and CEO Nithin Kamath announced that the firm would not increase its brokerage charges despite earlier warnings that all brokers will be forced to tweak their business models due to Sebi’s directive for market infrastructure institutions (MIIs), including the stock exchanges, to apply equal and uniform transaction charges.
“Equity delivery will continue to be free at Zerodha. As of now, we are not making any changes to our brokerage,” Kamath said on social media platform X. He had said that the company expects a 10% decline in revenues due to the change in the fee structure.
HDFC Securities and Upstox have not changed their brokerage charges, the firms told FE separately. HDFC Securities said it has made no changes apart from those mandated by regulations, such as the exchange transaction charges.
The revised transaction charges on cash, equity futures and options and currency derivatives, introduced by the National Stock Exchange (NSE) and the BSE last week, came into effect on Tuesday, discarding the previous regime of slab-wise transaction fee structure based on the overall turnover contributed in a month.
So far, brokers with higher turnover used to pay a lower transaction fee to the stock exchanges and vice versa. The NSE has revised its charges: Rs 297 per crore of traded value for the cash market, Rs 173 per crore for equity futures and Rs 3,503 per crore of premium value for equity options. Similarly, all Sensex and Bankex options will have a transaction fee of Rs 3,250 per crore of premium turnover value, while stock options and Sensex 50 options will have a transaction fee of Rs 500 per crore of premium turnover value.
Accordingly, Zerodha has decreased transaction charges to 0.035% from 0.0495% for options, while those for futures will go down to 0.00173% from 0.00183%. Angel One has revised exchange transaction charges to 0.00297% for NSE’s cash segment, 0.00173% for futures, and 0.03503% for options. The BSE charges for index and stock futures are 0%, Sensex 50 and stock options are set at 0.0050% and Sensex/Bankex options at 0.0325%.
The changes made by Angel One in its fee structure led to a surge of over 7% in its shares, with analysts expecting around 8% increase in its revenue from all the fee changes, keeping volumes intact.
Investors have started facing the brunt of higher securities transaction tax (STT) in the futures and options (F&O) segment from Tuesday. This would lead to an increase in STT to 0.1% from 0.0625% for options and to 0.02% from 0.0125% for futures.
“Since STT is charged on the entire contract value for futures, whereas in options, it is charged only on the premium, the impact will be much larger for futures traders,” the Zerodha CEO said.
The net impact of these two changes results in an increase of 0.02303% or Rs 2,303 per crore of premium on the selling side on the NSE and of 0.0205% or Rs 2,050 per crore on the BSE for options, Kamath said. Similarly, there will be a net increase of 0.00735% or Rs 735 per crore of futures turnover on the selling side.
2024-10-01T23:49:46Z dg43tfdfdgfd