NSE rejigs charges as MCX-SX heats up competition

Leading bourse NSE today rejigged its capital market annual subscription charges and advance minimum F&O transaction charges, a move coming within days of its rival MCX-SX proposing  competitive membership rates.

In a circular, NSE (National Stock Exchange) said that it has been receiving various representations from its members to rationalise annual charges both in capital market and F&O (Futures and Options) segments.

Consequently, NSE has decided to allow setting off of Capital Market Annual subscription charges against the transaction charges of the members in this segment. Further, any unutilised amount at the end of the year will be carried forward to the subsequent year.

On the same lines, any unutilised amount of the advance F&O transaction charges at the end of the year will be carried forward to the subsequent year, NSE said.

NSE said it has been taking various initiatives to reduce overall trading costs and has been reducing various charges such as transaction charges, connectivity charges, infrastructure costs etc since its inception.

In case of transaction charge of Rs 10 per lakh of traded value in 1996 (when cash segment was introduced), the Exchange had reduced the same to Rs 3.25 per lakh of the traded value (with further slab wise reduction) currently.

Also, the exchange currently levies Rs 1 lakh a year towards CM Annual subscription charges to corporate members and Rs 0.50 lakh a year to Non-corporate members.

Further, an amount of Rs one lakh is levied as advance minimum transaction charges for the F&O segment.

Gearing up to start a full-fledged stock exchange, MCX-SX earlier this month launched a membership drive to sign up entities to trade on its platform, while offering competitive rates to take on its rivals NSE and BSE.

MCX-SX is currently present only in currency derivatives segment, with about 750 members. It recently got market regulator Sebi's nod to deal in stocks, equity futures and options, interest rate derivatives and wholesale debt markets.

Under an introductory offer valid till October 18, MCX-SX would provide entry-level membership at Rs 25 lakh (Rs 5 lakh of membership fee and Rs 20 lakh deposit). The rates are considered to be very competitive as compared to those of NSE and BSE, according to industry.

MCX-SX has said that its membership fee structure is designed to bring in cost optimisation as it frees up huge capital for members and brokers that would otherwise be blocked in exchanges.

Brokers and members would be be able to utilise this fund towards client acquisition, training of staff and business expansion, MCX-SX has said.