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BSE, NSE brokers to protest transaction fee

Two associations of brokers belonging to India's two largest bourses said on Wednesday that they will organise a march to protest against a broker registration fee imposed by the capital market regulator.

The bodies represent brokers belonging to the Bombay Stock Exchange, the country's oldest bourse, and the National Stock Exchange, the busiest.

Association of NSE Members of India, which has around 750 members out of the nearly 1,000 brokers registered with the exchange, and the 500-member BSE Brokers Forum will stage the protest march on Thursday.

AMNI said it was appealing the 0.01 per cent fee imposed by the Securities and Exchange Board of India on traded volume.

"It is an appeal to Sebi to act rationally in respect of its registration fee, which will take out Rs 4.5 billion from the capital market in one move," said an AMNI spokesman.

Sebi imposed the fee in 1994, and is now demanding brokers pay the interest owed while appealing the fee in courts, brokers say.

BBF is also demanding that shares under rolling settlement be allowed to be traded on a weekly settlement cycle until a newly established derivatives market becomes more vibrant, a spokesman said.

Sebi recently banned carry-forward trading, which had accounted for up to 90 per cent of daily turnover at times. Sebi banned it from July 2 after the practice was blamed for fuelling a stock market payment crisis in March and a subsequent slide in share prices.

The capital market regulator simultaneously expanded the list of stocks subject to rolling settlement to 414 from 163. Rolling settlement requires trades in those stocks be closed on a daily basis.

Sebi began allowing options trading in individual stocks from the start of this month to replace the popular carry-forward practice.

But trading volumes have remained at dismal levels since the changes took effect. Turnover totalled just 35.4 million shares on Wednesday on the BSE, a fifth the volume on a slow day before Sebi began cracking down on speculative trading practices in early March.

The BSE forum is demanding that all members be allowed to trade in options and futures as those derivatives were meant to replace the carry-forward facility.

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