Brokerage stocks slip as Sebi asks exchanges to levy uniform charge

Shares of Indian brokers fell on Tuesday, a day after India's markets regulators asked market institutions like exchanges to levy uniform charges on brokers that are not based on volumes.

Brokerages like Angel One, 5Paisa Capital , SMC Global Securities and Motilal Oswal fell between 6%-2% in early trade.

Exchange operator BSE was down 1%.

Exchanges often charge a lower fee to brokers if they generate high volumes, contributing to a surge in trading across segments like derivatives, which the regulator wants to curb.

While retail customers are charged the standard slab rate, brokers were benefiting from a lower fee due to high turnover, Tejas Khoday, cofounder and CEO of FYERS, a discount broking firm said.

The exchange transaction charge revenue stream, which constitutes between 15%-30% of large brokers' revenues and more than 50% of discount brokers', is crucial for their sustainability, Khoday said.