The National Stock Exchange is known to have transaction charges which are a lot higher than the Bombay Stock Exchange. But now the NSE has rolled back a 6 per cent increased in transaction fees for equity cash and derivatives.
Eye on investor protection
Meant to scale up the investor protection fund, the charges have been recaliberated as Rs 10 per crore is applicable on cash equity.
As for futures, the charges are Rs 0.01 per crore and Rs 50 per crore is charged for equity options.
The protection fund is created to compensate investors if a defaulter's assets aren't enough to meet claims by them.
Board members, a public representative, investor association representative and senior exchange officials are appointed as trustees to manage the fund.
What does this mean for traders?
The decision to scrap the hike in transaction charges, will effectively make transactions 4 per cent cheaper.
Transaction charges such as brokerage, exchange fees, turnover fees and a tax on trading securities, are applicable, whether traders earn profits or lose money.
In addition to the net trading loss, traders in futures and options had also lost another 28 per cent as transaction costs in FY22 as per a SEBI analysis.
