Shares of Angel One fell by as much as 10% on July 2 after the Securities and Exchange Board of India (SEBI) issued a new circular revising the market intermediary charge mechanism.
At 10:00 AM, Angel One shares were trading at Rs 2,395.00 each on the NSE. The news caused a significant spike in trading volume with 18 lakh shares changing hands, much higher than the one-month daily average of five lakh shares.
SEBI’s new circular stated that Market Infrastructure Institutions (MIIs) like stock exchanges and clearing corporations should not give discounts based on turnovers.
Currently, MIIs levy transaction charges and depository fees on brokers using a slab-wise structure. Brokers then charge their customers in a similar way. However, brokers recover these charges from clients daily while MIIs receive the charges monthly. This results in brokers collecting more from clients than they pay to MIIs due to the slab benefits.
Discount brokers currently earn between 15% and 30% via transaction charge discounts. For deep discount brokers, this figure can rise to 50% to 70%.
The revised circular states that MII charges should be “true to label.” This means that if an MII charge is levied on a client, MIIs must ensure they receive the same amount from members.
According to the circular, the charge structure of MIIs should be uniform for all members instead of depending on the volume or activity of members.
