Trading volumes in the currency segment today fell nearly 50 per cent and 40 per cent on the National Stock Exchange (NSE) and the MCX-SX, respectively. This followed a levy of stamp duty by the Delhi government on proprietary trades, say market players. Brokers say the consequence of this will also be felt in equity and commodity segments, as Delhi-based jobbers and arbitrageurs will be hit.
According to a Delhi government notification, proprietary trades will attract a stamp duty of Rs 1,000 for every Rs 1 crore in case of delivery-based transactions and Rs 200 per Rs 1 crore in case of squared-off transactions in the equity cash market.
Proprietary trading is when brokers trade on their own account and not for clients. The notification has capped a stamp duty of Rs 50 per Rs 1 crore on sale and purchase of government securities. If a broker buys 100 shares of a company and sells the same quantity on the same day, the transaction is squared off and deemed a non-delivery-based trade.
For trades undertaken in the equity futures and options segment, the stamp duty has been fixed at Rs 200 per Rs 1 crore. Forward trading of commodities will attract a duty of Rs 100 per crore. In the currency segment, the top volume-generating brokers include Delhi-based Jaypee Capital and SMC Global. Together, they generate 35 per cent volumes in the segment.
Compared to average daily turnover of over Rs 10,000 crore on NSE in the currency segment, the turnover was Rs 5,940 crore today. On MCX SX, the volumes have come down to just over 11,000 crore from over Rs 18,000 crore recorded last week.
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