Zerodha, India’s leading brokerage firm, has announced that it will discontinue its referral program following a recent circular from the National Stock Exchange (NSE). The NSE circular prohibits brokers from sharing brokerage revenue for referrals, citing concerns that such practices could lead to trade inducement, which may not be in the best interest of customers.
Here is the circular from NSE –
Zerodha has stated that all referral wallet balances exceeding ₹10 as of July 31, 2024, will be paid out, and the referral program will be stopped. However, clients will still receive 300 reward points for each account they refer, which can be redeemed for AMC fees or access to partner products like Smallcase, Tickertape, Tijori, MProfit, and Quicko.
The new policy will take effect on August 25, 2024. Zerodha is currently in discussions with the exchanges and various forums to argue for the continuation of the referral program and will update customers on any developments.
“NSE issued a circular last week stopping brokers from sharing any brokerage as a referral incentive unless that person is registered as an authorized person with the exchanges. This is another one of those circulars that will hurt the business,” Nithin Kamath tweeted on X.
NSE issued a circular last week stopping brokers from sharing any brokerage as a referral incentive unless that person is registered as an authorized person with the exchanges. This is another one of those circulars that will hurt the business. 😬
So, we are stopping our… pic.twitter.com/cQgAAl5tGH
— Nithin Kamath (@Nithin0dha) August 21, 2024