MCX-SX effect! NSE to cut transaction fees

The move will help increasing the liquidity and make transactions cost-efficient,says NSE.

Two days after the privately promoted MCX-SX bourse announced up to 50 percent lower transaction fees for the prospective broker-members,country8217;s largest exchange NSE today announced a reduction in its fee,citing the need to increase liquidity and encourage wider participation of investors.

The reduced charges,not yet quantified,will be effective October 1,NSE said in a statement. 8220;The move will help increasing the liquidity and make transactions cost-efficient,which is expected to bring more investments into the market,8221; an NSE spokesperson said.

The yet-to-be operational MCX Stock Exchange on Monday announced lower transaction charges to the tune of 50 percent. The NSE members will be able to set off annual subscription charge of Rs 1 lakh per annum against their transaction charges,the bourse said,adding the annual subscription charges are no longer a fixed overhead. 8220;This will give an immediate relief to over 1,400 trading members,8221; an NSE statement said.

In the Famp;O segment,advance transaction charges are currently being offset against transactions charges of the current year. Whatever is not utilised can be carried forward till they utilise the same.

Just as in the case of rural VSATs etc,where adjustments have been made against transaction charges,the exchange has decided to give benefit of annual subscription charges in the capital market segment.

In 1996,when the cash segment was introduced,charge was Rs 10 for a lakh of trade for any traded value. In 2000 it was brought down to Rs 4 for traded value above 800 crore and Rs 7 for traded value up to 200 crore.

It was further brought down in 2005 to Rs 3.50 per lakh of trade for any traded value and then again in 2009 it was brought down to Rs 3.25 for a lakh of trade for traded value up to the first 1,250 crore and Rs 3 for traded value above 15,000 crore.

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In the Futures amp; Options too,the transaction charges have been brought down several times. In July 2001,for both futures and options,fees was levied after an initial waiver in 2000 at Rs 2 for a lakh of trade,the NSE said.

In 2005,charges on options began to be levied on just the premium and not the traded value. In 2009,futures fees was brought down to Rs 1.90 per lakh for traded value up to the first 2,500 crore and Rs 1.75 for traded value above 15,000 crore.