Sebi regulatory fee directive: BSE stocks fall nearly 19% in intra-day

Later, it ended at Rs 2,783 apiece, down 13.31 per cent

Shares of BSE tanked nearly 19 per cent in intra-day trade on Monday as the exchange is expected to shell out more regulatory fee after markets watchdog Sebi asked it to pay the fee based on the “notional value” of its options contracts rather than on the premium value.

The stock plummeted 18.63 per cent to Rs 2,612.10 during the day on the NSE. Later, it ended at Rs 2,783 apiece, down 13.31 per cent.

“Shares of BSE plunged more than 13 per cent after Sebi asked the exchange to pay the regulatory fee based on the notional value of its options contracts and not based on the premium value,” Avdhut Bagkar, Technical and Derivatives Analyst at StoxBox, said.

About 112.45 lakh shares of the exchange were traded on the NSE during the day. The exchange’s market valuation stood at Rs 37,675.24 crore.

In the broader market, the NSE Nifty ended with a gain of 223.45 points or 1 per cent at 22,643.40.

“BSE is hereby advised to pay the regulatory fee based on annual turnover to Sebi considering the notional value in case of options contract,” the exchange said in a filing to the National Stock Exchange (NSE) on Friday. Also, the exchange has been asked to pay the differential regulatory fee for the

Sebi’s letter mentioned that since the introduction of derivative contracts, BSE has been paying the regulatory fee on ‘annual turnover’ to the regulator considering premium value for option contracts, instead of the notional value

past periods along with an interest of 15 per cent per annum on the remaining unpaid amount. It has been directed to pay the amount within one month of receipt of the letter, the filing noted.

Sebi’s letter mentioned that since the introduction of derivative contracts, BSE has been paying the regulatory fee on “annual turnover” to the regulator considering premium value for option contracts, instead of the notional value.

Notional turnover represents the overall strike price of all contracts traded in derivatives, whereas premium turnover is the sum of premiums paid on all contracts traded. As the notional value exceeds the premium turnover, opting for notional turnover as the basis entails a higher fee outlay.

In a disclosure on Sunday, BSE said it is currently evaluating the validity of the claim as per Sebi communication.

In case it is ascertained that the said amount is payable, the total differential Sebi regulatory fees for the period from FY 2006-07 to FY 2022-23 would be Rs 68.64 crore plus GST, which includes an interest of Rs 30.34 crore. Further, the differential Sebi regulatory fees for FY 202324, if liable, could be around Rs 96.30 crore plus GST, BSE said.