The Hindu Business Line : SEBI moots fee collection from brokers by bourses

IN a bid to avoid arrears of registration fees from stockbrokers, a Securities and Exchange Board of India (SEBI) paper has suggested various measures including setting up of Self Regulatory Organisations (SROs) such as stock exchanges to collect the fee from brokers on behalf of the market regulator.

The paper has said that stock exchanges are collecting transaction charges from brokers based on turnover and SEBI is collecting registration fees also based on turnover. This is duplication of effort. To avoid this, the SEBI paper has suggested that exchanges also collect registration fees on behalf of the market regulator while collecting transaction charges.

In case a stockbroker fails to pay the fee, SEBI would ask the stock exchange concerned to pay the fee and similarly if a sub-broker fails to pay the fee, the concerned brokers have to pay the fee.

For a single market intermediary having registered with SEBI for multiple activities, the paper has called for integrated registration. It means that a unique registration number to each entity and suffix it by an alpha-numeric code to indicate the kind of activity the intermediary is permitted to carry on.

With this code, SEBI will know if an entity is registered with it in five capacities and his integrated fee liability to it. The paper says that if the entity defaults on account of one activity, it would cease to carry on all the activities.

In case an intermediary fails to pay fees within 30 days of its becoming due, it would automatically cease to do business. The onus should be on the intermediary to ascertain and ensure that it has paid the fees fully to SEBI in compliance with the regulations, the paper said.

Article E-Mail :: Comment :: Syndication

Stories in this Section
IL&FS to recast `e-com' fund

Morarjee board okays addl shares buying

Volatile movement

Stock-split factor

Nifty August futures end in premium

SEBI moots fee collection from brokers by bourses

Sensex ends on positive ground

Investors' council questions Escorts units conversion