Revised Charges Schedule and Pricing Update

From October 1, 2024, significant reforms will take effect in India's financial markets, which investors should be aware of. Key changes include the introduction of new transaction fees by both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) across different segments, along with a new government policy that treats share buybacks as dividends for tax purposes.

In addition, the Securities Transaction Tax (STT) on Futures & Options (F&O) trading has been raised, and the Securities and Exchange Board of India (SEBI) has simplified the process for trading bonus shares.
 

Transaction Fee Adjustments

The BSE has revised its transaction fees for options contracts based on the Sensex and Bankex indices, setting it at ₹3,250 per crore of premium turnover. These changes are part of broader reforms highlighted in a SEBI circular from July 2024, affecting Market Infrastructure Institutions (MIIs). On the cash market side, NSE will now impose a fee of ₹2.97 per lakh of traded value on each side. Fees for equity futures and options will be ₹1.73 and ₹35.03 per lakh, respectively. This structure aims to create a consistent and fair trading environment for brokers.

Similarly, the Multi Commodity Exchange of India (MCX), the largest non-agricultural commodity exchange in the country, has updated its transaction fees for futures and options contracts. The new rates will be ₹2.10 per lakh of turnover value for futures contracts, while options contracts will incur a fee of ₹41.80 per lakh of premium turnover.

Tax Changes for Share Buybacks

As of October 1, income from share buybacks will be taxed as dividends, which means shareholders will now pay taxes according to their income tax bracket. This change shifts the tax liability from companies to individual investors, making buybacks less attractive compared to the earlier tax-efficient approach.

STT Increase on Derivatives

To address the rising participation of retail investors in the derivatives market, the STT on Futures trading has been increased to 0.02%, up from 0.0125%, while the STT on options trading has been raised to 0.1%. This change, introduced by the Finance Minister, is aimed at curbing speculative trading.

New Bonus Share Trading Timelines

SEBI has also adjusted the framework for trading bonus shares, introducing a T+2 settlement system. Under this new timeline, bonus shares will be available for trading two days after the record date, thereby improving liquidity and giving investors faster access to their shares.

In summary, these reforms—including changes in transaction fees, taxation of share buybacks, STT adjustments, and the streamlined process for trading bonus shares—signal important shifts in India's financial markets, urging investors to re-evaluate their strategies accordingly.

5paisa Capital Limited would like to bring to your attention that the pricing levied by 5paisa for trades undertaken on the 5paisa platform have been revised as follows:
 

1. Securities Transaction Tax and Other Regulatory Pricing Updates (Effective from October 1, 2024)

a) Securities Transaction Tax (STT):

Futures transactions in securities: STT will increase to 0.02% from the previous rate of 0.0125%.

Options transactions in securities: STT will now be 0.1% of the premium, up from 0.0625%.

b) Investor Protection Fund Trust (IPFT) Charges:

NSE Equity & NSE Futures: ₹10 per crore of traded value, plus an 18% GST.

NSE Equity Options: ₹50 per crore of premium value, plus an 18% GST.

NSE Currency: ₹2 per lakh of premium value for options, and ₹0.05 per lakh of traded value for futures, plus 18% GST.

c) NCDEX Risk Management Fee:

A 0.10% fee (₹100 per lakh) will be applied on the premium value of all new overnight open positions.

d) Exchange Transaction Fees:

MCX: Futures will incur a fee of 0.00210%, while the fee for options has been revised to 0.0418%, down from 0.05%.

NSE: For the cash market, the fee will be 0.00297%, while equity futures will have a fee of 0.00173%. Equity options will be charged at 0.03503%, currency futures at 0.00035%, and currency and interest rate options at 0.0311%.

BSE: Index and stock futures will have no charge, while Sensex 50 and stock options will incur a fee of 0.0050%. Sensex and Bankex options will be charged at 0.0325%.

NCDEX: Futures contracts will have a fee of 0.005800%, options will be 0.030000%, and Guar seeds options will have a fee of 0.015000%.
 

e) DP (Depository Participant) Charges: 

₹20.00 plus GST.

f) Pledge/Unpledge Charges:

This charge applies when shares are pledged to obtain funding.

Pledge for Margin: ₹20.0 per scrip.

This charge applies when shares are pledged for margin requirements.

Unpledge: ₹20.0 per scrip.

This fee is charged when shares are unpledged.

Unpledge and Sell: ₹20 + ₹20 = ₹40 + GST instead of ₹25.

This combined fee is charged when shares are both unpledged and sold.

Important Notes:

Ledger Account: These charges will be automatically deducted from your ledger whenever shares are pledged or unpledged.

Per scrip Basis: All fees are calculated per stock or unit, meaning the charge applies to each individual security you pledge or unpledge.

2. Brokerage and Commercial Pricing Revisions (Effective from November 1, 2024)

a) Annual Maintenance Charges: ₹25 + GST per month will be charged for non-BSDA accounts starting from the second year.

b) Cash Collateral Margin Shortfall: For shortfalls exceeding ₹50,000, an interest rate of 0.0342% per day will apply.

50-50 Split Rule

In line with SEBI's new margin rules for better risk management, brokers are now required to ensure that at least 50% of the total margin requirement from clients is provided in cash or cash equivalents. The remaining 50% can be covered by pledged securities or other cash equivalents. Accordingly, you must provide 50% of the total margin in cash or similar assets, while the other 50% can be in pledged securities or cash equivalents

Interest for Margin Shortfall by 5paisa

21% for ₹50,000 above.

Example:

If your total margin requirement is ₹2,00,000, you must have at least ₹1,00,000 in cash or cash equivalents. The other ₹1,00,000 can be provided through pledged securities or cash equivalents. If your cash balance is less than ₹1,00,000 and you have a shortfall exceeding ₹50,000, 5paisa will charge interest on the excess.

c) Equity Delivery Charges:

Brokerage will be charged at a flat rate of ₹20 for cash/equity delivery.

d) Margin Trading Facility (MTF) Interest:

The interest rate for outstanding balances under the MTF will be revised to 14.99% per year, charged fortnightly.