Staff costs spike at exchanges

MCX Stock Exchange sees expenses rising over 50 per cent

As it competes for business, the country’s newest stock exchange, MCX Stock Exchange Limited (MCX-SX), has seen its employee expenses rise over 50 per cent in the latest year, outpacing established rivals the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) by a wide margin.      

While the MCX-SX swung into profits in 2012-13 from a net loss of about Rs 2.6 crore, it also saw its employee expenses rise 51 per cent to Rs 46.24 crore.      

While the staff expenses rose at the NSE and BSE as well, growth rates were relatively smaller at nine per cent and four per cent, respectively, for the year ended March 31.      

The NSE incurred total employee expenses of Rs 77.52 crore for the year, while for the BSE those were Rs 46.24 crore. The collective employee expenses of the three exchanges rose 14 per cent to Rs 204 crore in the year, showed an analysis of their annual financial results.      

All the three registered profits for the year, while their cumulative net profit also rose 14 per cent to Rs 1,007 crore.      

Individually, NSE's net profit rose 25 per cent to Rs 878 crore, BSE’s fell 39 per cent to Rs 108 crore. MCX-SX posted a net profit of Rs 21.5 crore for 2012-13, against a net loss of Rs 2.6 crore last year.      

In terms of total income, including the revenue from operations and the other income, NSE’s figure remained the highest at Rs 1,648.11 crore, followed by BSE’s, Rs 553 crore, and MCX-SX’s, Rs 179 crore.         

While NSE’s total income grew nine per cent, the BSE posted a four per cent decline and MCX-SX saw its total income more than double from Rs 81 crore in 2011-12.      

NSE was the only exchange among the three to lower total expenses (by four per cent). BSE’s rose nine per cent and MCX-SX’s by 83 per cent.      

MCX-SX got an approval from the market regulator Securities and Exchange Board of India (Sebi) last year to begin trading in equity and equity-derivative segments, while it started live stock trading earlier this year. The exchange started live trading for a dedicated debt segment on Monday. The NSE went live recently in the dedicated debt segment, while BSE has also got Sebi’s approval for the same and might soon launch this platform. The competition among the three exchanges is set to intensify.