Faced with growing competition from rival BSE, leading bourse National Stock Exchange (NSE) today announced discounts of up to 50 per cent in transaction charges for trading on its currency derivatives platform and in equity options segment.
Besides, NSE has also announced a liquidity enhancement scheme for Exchange Traded Funds (ETFs) on its indices. The third major player in this segment, MCX-SX had also tweaked its transaction charges for futures contracts traded on its currency derivatives platform earlier this month.
NSE's decision comes days ahead of BSE beginning to impose charges for currency futures trade with effect from December 1, after exempting such trades from any transaction levy for about a year. NSE's discounts of 30-50 per cent in transaction charges for currency futures trade would also be applicable from December 1 and would continue for two months as of now.
In equity options, NSE will give a flat concession of 40 per cent in the transaction charges levied on the incremental billable volume, or Premium value, above Rs 750 crores in a month for a period of 2 months beginning December 1.
Incidentally, BSE has clocked higher volumes than NSE in equity options segment in some recent days. In currency derivatives, NSE is the largest exchange, while BSE has now overtaken MCX-SX as the second largest player. NSE said that the proposed discounts are part of its effort to improve the liquidity in the currency futures and equity options segments and to align with the feedback received from the market.
As per capital markets regulator Sebi's latest monthly bulletin, the turnover of currency derivatives at BSE increased by 22.6 per cent to Rs 1,41,170 crore in September this year from Rs 1,15,127 crore in the previous month. This assumes significance as BSE began currency derivatives trade in November 2013 itself and it has overtaken MCX-SX as the second largest exchange in this segment with a market share of about 30 per cent currently.
According to Sebi, monthly turnover of currency derivatives at NSE increased by 9 per cent to Rs 2,85,236 crore in September, from Rs 2,61,636 crore in August 2014, while that of MCX-SX fell by 8.6 per cent to Rs 57,590 crore in the same month.
The turnover at the fourth exchange USE in this segment also rose by 14.2 per cent to Rs 9,370 crore in September, over the previous month, making MCX-SX the only exchange to witness a decline. While the turnover at BSE has almost doubled from Rs 72,000 crore in April this year, in case of MCX-SX it has marginally fallen from Rs 59,000 crore in the first month of 2014-15.
In case of the largest bourse NSE also, the turnover has risen considerably from Rs 1,55,000 crore in April 2014.
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