Brokerages Revise Charges Following SEBI’s True-To-Label Norms, Here's What Happened

Angel One issued a statement and noted that it will now charge a flat Rs 20, or 0.1 per cent in addition to GST of trade value and brokerage, whichever is lower, in the cash/equity delivery segment

SEBI in its circular said that qualified institutional brokers (QIBs) will now have to ensure that they provide UPI-based block mechanism to their clients for trading in the secondary market.

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The Securities and Exchange Board of India (SEBI) announced the true-to-label norms via a circular this week. Following the changes issued by the capital markets regulator, leading brokerages have issued revisions in their charges. 

While Zerodha announced no change in the rates for now, Angel One said that it is increasing its charges, reported Business Standard. Other leading players in the brokerage sector are also expected to make changes to their prices in ‘due course’. 

Announcing the revisions, Angel One issued a statement and noted that it will now charge a flat Rs 20, or 0.1 per cent in addition to GST of trade value and brokerage, whichever is lower, in the cash/equity delivery segment. Further, the brokerage also informed about changes in transaction charges, interest on several services, annual maintenance charges, etc. 

Notably, SEBI in its circular said that qualified institutional brokers (QIBs) will now have to ensure that they provide UPI-based block mechanism to their clients for trading in the secondary market. This system is similar to ASBA, which is followed in the primary market. However, investors have a choice to either opt for these facilities or continue with the current facility where they have to transfer funds to trading members.

The regulator also instructed brokers to provide a three-in-one trading account facility to investors which would basically be a combination of a savings account, demat account, and trading account.

Earlier in July, SEBI issued a circular making it mandatory for market infrastructure institutions (MIIs) like stock exchanges and clear corporations to recover charges from the end client on a true-to-label basis. This essentially means that if any charges are imposed on the end client, they have to ensure that the same amount gets recovered.

Till recently, the MIIs were collecting slab-wise charges based on the volume or turnover of the stock broker. Now this system is being discontinued and a uniform charge will be imposed taking away the benefit earlier enjoyed by discount stock brokers as they paid lesser charges in comparison to their peers owing to higher turnover from their clients. As such, the NSE and BSE have also implemented revisions to levy uniform fees.