NSE to roll back 6% transaction charges on equity and F&O trading from April 1

(Representative image)

The board of National Stock Exchange (NSE) on March 24 stated that it has decided to rolled back the 6 percent increase in transaction charges on equity cash and derivatives segment, with effect from April 1.

In January 2021, the charges were increased by 6 percent partly, to augment the investor corpus in view of certain market exigencies due to broker defaults.

"Further with objective to systematically augment the corpus of NSE IPFT, it was also decided to recalibrate the contribution to NSE IPFT from Rs 0.01 per crore to Rs 10 per crore in cash equities market segment and equity futures and Rs 0.01 per crore to Rs 50 per crore in equity options," the exchange said in a release.

NSE IPFT is NSE's Investor Protection Fund Trust.

After the reduction in transaction charges offset by the recalibration of contribution to NSE IPFT, the effective reduction is around 4 percent.

NSE's announcement comes on the heels of Finance Ministry hiking STT (securities transaction tax) on F&O contracts by 25 percent. A trader incurs STT, exchange charges, stamp duty, GST, brokerage and SEBI charges on his/her turnover.

As per a SEBI study, 89 percent of individual traders (i.e. 9 out of 10 individual traders) in the equity F&O segment incurred losses, with an average loss of Rs 1.1 lakh during FY22. On the other hand, 90 percent of the active traders incurred average losses of Rs 1.25 lakh during the same period.