Informist, Friday, Apr 26, 2024

--BSE: Got SEBI letter today on regulatory fee payment matter

--SEBI asks BSE to pay regulatory fee in F&O on notional turnover

--SEBI found BSE paid regulatory fee in F&O on premium turnover

--SEBI asks BSE to pay differential regulatory fee for past periods

MUMBAI – The Securities and Exchange Board of India has asked BSE Ltd to pay certain regulatory fees of past periods, saying that the exchange had wrongly considered premium turnover in options contracts, instead of considering the notional turnover, to calculate the regulatory fee, the bourse said in a filing today.

A stock exchange is required to pay SEBI a regulatory fee at a certain rate based on its "annual turnover" within 30 days of the end of a financial year. According to the market regulator, in the case of options contracts, the "annual turnover" was required to be computed on the basis of notional value.

But SEBI said that since introduction of derivatives contracts, BSE has been paying the mandated regulatory fee on "annual turnover" after considering the premium value for options contracts instead of notional value. Since notional turnover is multiple times of premium turnover, BSE would have paid SEBI lower regulatory fees in the past periods. SEBI did not specify the quantum of regulatory fee that BSE paid on the basis of premium turnover and the quantum it was supposed to pay on the basis of notional turnover.

SEBI, therefore, advised BSE to pay the differential regulatory fee for past periods, along with interest at 15% per annum, within a month.

The regulatory fee rate on turnover is specified in the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018. An exchange's annual turnover is defined as aggregate value of transactions, excluding turnover on agricultural commodity derivatives, which took place during the relevant financial year.

The rate of turnover fee varies as per slabs. For annual turnover of less than 100 bln rupees the regulatory fee is 100,000 rupees. In case an exchange has annual turnover of 5-10 trln rupees the regulatory fee is 10 mln rupees. The highest slab is for annual turnover above 10 trln rupees and the applicable regulatory fee is 10 mln rupees plus 0.000012% of the annual turnover.

BSE did not specify the financial impact of the SEBI directive on the turnover fee.

Shares of BSE closed 2% higher at 3,210.35 rupees on the National Stock Exchange. End

Reported by Rajesh Gajra

Edited by Ashish Shirke

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