NSE rolls back 6% hike in transaction charges on equity cash, derivatives

The National Stock Exchange (NSE) on Friday rolled back an increase in transaction charges for the cash equities and equities derivatives segments. The rollback will be effective from April 1, 2023, the exchange decided in its board of directors meeting held on Thursday.

Earlier, NSE had increased the charges by six per cent effective January 2021, to augment the corpus of NSE Investor Protection Fund Trust (NSE IPFT).

The objective of the fund is to compensate investors in case defaulters’ assets are not sufficient to meet the admitted claims made by investors. The fund also aims to promote investor education.

The NSE board has decided to increase the contribution towards NSE IPFT from Rs 0.01 per crore rupees to Rs 10 per crore rupees in the cash equities market segment and equity futures. On the equity options, it has been increased from Rs 0.01 per crore rupees to Rs 50 per crore rupees.

“The above reduction in transaction charges, partially offset by the recalibration of contribution to NSE IPFT, will lead to effective reduction in the impact on overall transaction charges by about 4 per cent,” said the exchange.

As on February 28, the IPFT corpus amounted to Rs 1,587 crore, down from a peak of Rs 1,774 crore in 2020-21. So far this financial year, claims amounting to Rs 124 crore have been paid from the investor protection fund. The claims paid were at an all time high of Rs 553 crore in 2020-21.

The IPFT compensates investors to the extent of funds found insufficient in defaulters' account to meet the admitted value of claim, subject to a maximum limit of Rs 25 lakh per investor per defaulter.