Sebi hikes fees it levies on market intermediaries

Regulator says impact on investors will be 'minimal'

Capital market regulator Securities and Exchange Board of India (Sebi) has decided to increase the fees it levies on market intermediaries and entities accessing the capital market.

The fee revision, which is based on recommendations made by an internal panel, is to help Sebi generate resources to pursue policy initiatives set for the next financial year.

The regulator, in a press release, said that expanding reach, capacity building, strengthening investor awareness  and improving supervision and enforcement standards are the core activities identified by for the financial year 2014-15.

Sebi has said the upward revision of fees is done while ensuring that the impact on investors will be minimal.

The quantum of hike will be notified 'through appropriate circulars to be issued in due course,' the release added.

Sebi sources said that the fee it charges while an entity files an offer document for rights issue, open offer or public offering will be rationalised and restored to 2007 levels. Also, the registration fee for mutual funds and stock brokers is also likely to be revised. In addition, the annual fee levied based on the assets managed by a fund house or turnover clocked by a broker is also likely to be revised upward.

The source said that fee increase was warranted the fee income over the last couple of years hasn't kept pace with the increase in expenditure.

According to Sebi's annual reports, between FY09 and FY11, Sebi made an average budget surplus of Rs 80 crore, however, in the last two financial years, due to rising expenses and stagnant fee income the regulator had to budget deficit.

The Sebi ordinance, which has given the regulator more teeth, has also increased its responsibilities and functions.

For instance, the regulator has initiated action against a large number of collective investment schemes (CIS) operating across the country. Sebi also had hired new staffers in recent months.