The Hindu Business Line : SEBI relief to SE subsidiaries on turnover fee

IN a significant development, providing the much needed clarity to the issue of exemption from payment of turnover fee by the subsidiaries floated by regional stock exchanges (RSEs), the Securities and Exchange Board of India (SEBI) has issued detailed guidelines on computation of turnover fee.

According to the SEBI Chief General Manager, Mr M.S. Sahoo, the regulator has been receiving several queries seeking clarification regarding exemption of turnover from payment of fees payable by the subsidiaries of stock exchanges.

Mr Sahoo said the turnover of the subsidiary would be the total aggregated turnover of the sub-brokers transacting through it. However, the turnover of those sub-brokers, who have paid registration fees individually to the SEBI as members of the parent stock exchange, which floated the subsidiary, would not be included in total turnover of the subsidiary for the purpose of computing the fee liability of the subsidiary.

"Therefore, the total turnover of those sub-brokers, who have not paid five years turnover-based fees and block of five years fees on the parent stock exchange, would be the turnover of the subsidiary for the purpose of computation of fee liability," the regulator clarified through its latest circular.

While stating that the fees based on turnover determined in this manner would have to be paid by the subsidiary, the regulator has, however, said certain concessional rates were available as per the amendment carried on to the SEBI (Stock Brokers and Sub-brokers) Regulations, 1992 last year in respect of specified transactions available to the subsidiary.

According to the SEBI circular, the subsidiary would be exempted from payment of turnover-based fee in respect of turnover of the sub-brokers who have paid SEBI fees along with interest, if any, as brokers on the parent exchange in accordance with the Schedule III of SEBI Regulations, read with amendment dated February 20, 2002. The computation of fee would be from the date of such payment and not from the date of completion of five years period from the date of SEBI registration of the sub-broker as a member of parent exchange, the regulator said.

Further, SEBI has also clarified that the regulations do not provide exemption in respect of turnover of the sub-brokers of the subsidiaries if those sub-brokers have paid 50 per cent of the principal fees and undertaken to pay the balance with interest.

"The exemption would be available only if entire fees and interest, if any, has been paid in accordance with the regulations and from the date of such payment."

In addition, SEBI has also made it clear that the non-payment of Rs 5,000 payable towards second block of five years as a member of the parent stock exchange by the sub-broker would be considered as non-compliance with Clause 4A of Schedule III of SEBI (Stock Brokers and Sub-brokers) Regulations 1992 and accordingly, the subsidiary would not be eligible for exemption of fess on turnover of such sub-brokers.)

Article E-Mail :: Comment :: Syndication

Stories in this Section
Challenging time for fund trackers

NSE changes price bands

BSE modifies circuit filter limit

Market lacks direction as war worries linger

United Phosphorus: Restructuring to be fruitful?

SEBI relief to SE subsidiaries on turnover fee

Wrangle over regulatory body delays IDR norms

`Hold stocks for longer term' — Mr Prashant Jain, CIO, Zurich India MF

Infy premium drops