Shoonya announces intraday trading fee, but later puts it on hold

18 November 2024: In a significant move, commission-free brokerage platform Shoonya has announced the end of its zero-brokerage model, introducing a new fee structure effective from 2 December 2024. The move is a notable departure from Shoonya’s original model of providing a range of financial services at zero brokerage charges, and has invited backlash from users on social media.

Under the new structure, Shoonya will charge an annual maintenance fee (AMC) of Rs 499 per year (plus GST) for all active accounts, a trading fee of Rs 5 per order (plus GST) for intraday, futures and options (F&O), and commodity derivatives trades, and an API trading fee of Rs 1,999 per month (plus GST). However, Shoonya emphasised that it will maintain zero brokerage on delivery trades, ETFs, bonds, IPOs, mutual funds, and several other services.

Shoonya’s decision comes close on the heels of Kotak Neo introducing a Rs 10-per-order brokerage on intraday trades across all segments, from 4 November. Kotak Neo simultaneously reduced charges on other key services, such as lowering stock delivery charges to 0.20 percent and halving the cost of carry-forward F&O trades to Rs 10 per order.

Ashish Nanda, President and Digital Business Head at Kotak Securities, said that introduction of charges, or a hike in charges, was inevitable, considering the mounting pressure on discount brokerages to ensure sustainable operations.

“I said before that if zero is unviable for us, it is unviable for everyone else too. Leave zero, in my view even Rs 20 may not be sustainable for many,” Nanda said in a post on X (Twitter). He further said that additional challenges -- such as the end of daily expiring options contracts to move to one expiry a week from 1 December, and increase in lot sizes from 1 January 2025 -- are expected to hit revenues for discount brokers.

Brokerages such as Shoonya and Kotak Neo are adjusting their fee structures amid regulatory changes and evolving market conditions. The Securities and Exchange Board of India (SEBI) recently eliminated exchange rebates, pushing brokerages to adopt flat-fee structures to remain viable. Shoonya cited these regulatory changes and rising technology costs as key factors behind its decision to introduce charges.

Nanda also said that while some brokerages are attempting to maintain zero brokerage on specific segments, sustaining such a model in the long term may be challenging. “At our end, Rs 10 per order is how we will be for intraday, F&O, and commodities across plans. Delivery under Rs 30 will stay at zero,” he said, adding that all platforms, including APIs, will remain free at Kotak Neo.

Zero-brokerage platforms are grappling with revenue pressures while aiming to strike a balance between affordability and sustainability.

UPDATE (February 2025): Shoonya later put the charges on hold. The company said in a communication --

'While these charges were initially announced... they were revised after a few days, as follows: The proposed AMC of Rs 499 per year (plus GST) will no longer apply; The proposed API Trading Fee of Rs 1,999 monthly (plus GST) has been put on hold'

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