NSE rolls back 6% hike in transaction charges on equity cash, derivatives

Mumbai, March 24, 2023 

The roll back will be effective from April 1, 2023, the exchange decided in its board of directors meeting held on Thursday

The National Stock Exchange (NSE) on Friday rolled back an increase in transaction charges for the cash equities and equities derivatives segment. The roll back will be effective from April 1, 2023, the exchange decided in its board of directors meeting held on Thursday.

Earlier, NSE had increased the charges by 6 per cent effective January 2021, to augment the corpus of NSE Investor Protection Fund Trust (NSE IPFT).

The objective of the fund is to compensate investors in case of defaulters’ assets not being sufficient to meet the admitted claims for investors apart from promoting investor education.

The NSE board has also decided to increase the contribution towards NSE IPFT from Rs 0.01 per crore to Rs 10 per crore in cash equities market segment and equity futures. On the equity options, it has been increased from Rs 0.01 per crore to Rs 50 per crore.

“This above reduction in transaction charges partially offset by the recalibration of contribution to NSE IPFT will lead to effective reduction impact on overall transaction charges by around 4 per cent,” said the exchange.

As on February 28, 2023, the IPFT corpus was to the tune of Rs 1,587 crore, down from the peak of Rs 1,774 crore in 2020-21. So far, in the current financial year, claims accounting up to Rs 124 have been paid from the investor protection fund. Claims paid were also highest in 2020-21 at Rs 553 crore.

The IPFT compensates investors to the extent of funds found insufficient in defaulters' account to meet the admitted value of claim, subject to a maximum limit of Rs 25 lakhs per investor per defaulter.

[The Business Standard]