Annual Report
SEBI turnover fee doubled to 9.79 bln rupees in FY24, says NSE
This story was originally published at 15:40 IST on 8 August 2024
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By Rajesh Gajra
MUMBAI – The annual turnover fee imposed by the Securities and Exchange Board of India on the National Stock Exchange doubled in 2023-24 (Apr-Mar), according to data from the exchange's annual report. The NSE released the annual report for 2023-24 on Wednesday.
SEBI's regulatory fees increased 105% to 9.79 bln rupees in 2023-24 from 4.77 bln rupees in the previous year "due to increase in volumes", the NSE said in the annual report. SEBI's regulations require a stock exchange to pay the market regulator a regulatory fee, at specified rates, on its annual turnover within 30 days of the end of every financial year.
The NSE bases its SEBI regulatory fee obligation on notional turnover as far as the options turnover is concerned. In April, the other major stock exchange, BSE, was directed by SEBI to compute its annual turnover in the case of options on the basis of notional value for the purpose of calculating the regulatory fee.
In 2023-24, the total turnover in the equity derivatives segment of NSE, based on notional value of options and trade value of futures, rose 109% to 79,927.67 trln rupees, data from the NSE's website showed. Of this, notional turnover of index options was 78,676.91 trln rupees, making up for 98.4% of the total equity derivatives segment.
The NSE's cash market turnover rose 51% to 201.03 trln rupees in 2023-24, data from its annual report showed.
The NSE has been paying SEBI's regulatory fee for all the past years using notional value for option turnover. On the other hand, the BSE had been calculating the turnover based on premium turnover in the case of options for paying regulatory fees in the past years.
In options trading, the premium amount is the one that gets traded and not the notional value. The premium is typically around 1-2% of the notional value. For instance, the NSE's premium turnover in index options was 138.20 trln rupees, 0.18% of the notional turnover of 78,676.91 trln rupees.
On Apr 26, SEBI directed the BSE to pay the regulatory fee considering notional value in the case of options from 2006-07 onwards. The market regulator ordered the BSE to pay the differential between the fee paid based on premium turnover and the fee payable based on notional turnover, along with 15% interest for the period of delay.
The differential amount was 383 mln rupees and the interest penalty was 303.4 mln rupees for the period from 2006-07 to 2022-23, according to the BSE. The differential amount for 2023-24 was 963 mln rupees. In all, the BSE made a provision for 1.7 bln rupees in its financial accounts for the quarter, and financial year, ended March.
After receiving SEBI's Apr 26 letter, the BSE wrote to the market regulator seeking a review and reconsideration of the differential regulatory fee demand which encompassed all years from 2006-07.
On Wednesday, following its June quarter earnings announcement, BSE's Managing Director and Chief Executive Officer Sundararaman Ramamurthy told investors and analysts in a conference call that it had, so far, not received a reply from SEBI on its plea for review of the differential regulatory fee demand. "We understand that they (SEBI) are actively reviewing our requirements and our submissions… (but) we have not yet received any replies from them in this regard," he said.
At 1438 IST, shares of BSE traded 8.4% higher at 2,698.95 rupees on the National Stock Exchange. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Manisha Baxla
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