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Informist, Saturday, Aug 10, 2024

 

By Rajesh Gajra

 

MUMBAI – The Securities and Exchange Board of India got richer in 2023-24 (Apr-Mar) in terms of collection of regulatory fees and other charges from market participants. Data from its annual report for the year, released on Friday, showed that it imposed regulatory fees and charges of 18.51 bln rupees in 2023-24 (Apr-Mar), up 53% or by 6.38 bln rupees, over the previous year.

 

This growth rate of 53% was significantly more than the 16% increase in the previous year 2022-23. It was largely due to a 2.3 times surge in regulatory fees collected from the stock exchanges to 10.66 bln rupees. In absolute terms, the increase in regulatory fees collected from the stock exchanges was 5.98 bln rupees.

 

SEBI imposes regulatory fees on stock exchanges based on specified slabs of the annual turnover in the cash market and equity derivatives segments. SEBI defines annual turnover for equity derivatives to be the aggregate of traded value in futures contracts, and notional turnover in options contracts where the traded value is the premium paid and received by the buyers and sellers.

 

The National Stock Exchange of India reported in its 2023-24 annual report, released on Wednesday, that SEBI's regulatory fees for the exchange doubled, or increased by 5.02 bln rupees, to 9.79 bln rupees in 2023-24 from 4.77 bln rupees in the previous year.

 

The total equity derivatives turnover of NSE, based on notional value of options and trade value of futures, surged by 109% to 79,927.67 trln rupees in 2023-24, 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.

 

The other major stock exchange, BSE Ltd, was paying regulatory fees to SEBI till 2022-23 based on calculation of notional turnover in the case of options contracts. But in April, SEBI wrote to BSE and asked it to pay the regulatory fee based on notional turnover in the case of options contracts from 2006-07 onwards.

 

BSE was asked by the market regulator to pay the differential between the fees paid based on premium turnover and the fee payable based on notional turnover, along with a 15% interest for the period of delay. The BSE said in a filing that for the period from 2006-07 to 2022-23, SEBI's differential regulatory fee demand worked out to 383 mln rupees and interest penalty was 303.4 mln rupees. For 2023-24, the differential amount was 963 mln rupees.

 

SEBI's collection from regulatory fees and charges comprises recurring and non-recurring fees and charges. The fee charged on annual turnover of stock exchanges is a recurring fee.

 

In 2023-24, the recurring fees jumped up 67% to 14.75 bln rupees, aided by the 2.3 times surge in regulatory fees from stock exchanges to 10.66 bln rupees. The non-recurring fees rose by just 14.4% to 3.77 bln rupees.

 

Non-recurring fees, according to SEBI, are received on one-time basis. It includes fees for offer documents file, registration fees, application fees, takeover fees, informal guidance scheme fees, foreign portfolio registration fees, and others.

 

In the non-recurring fees category, SEBI reported a 41% jump up in fees from primary market equity offer documents and prospectus filed to 1 bln rupees in 2023-24. On the other, takeover fees collection declined 40% to 532 mln rupees.  End

 

Edited by Akul Nishant Akhoury

 

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