BSE to charge members a turnover fee of Rs 2.5/cr in IRF

Members trading in the newly launched interest rate futures will have to shell out a fee of Rs 2.50 for every Rs 1 crore of turnover made by them, according to leading stock exchange BSE.
BSE had commenced trading in Interest Rate Futures (IRF) in 10-year government bonds on January 28.
"Trading members of the Exchange are hereby informed that in respect of trading done by the members in Interest Rate futures, Sebi turnover fee 0.000025 per cent of the turnover (i.E. Rs 2.5 per crore) would be debited to the members," BSE said in a notice today.
The exchange also said one additional file would be made available to show details of IRF turnover and amount to be debited towards the turnover fees.

The IRF contract is cash settled and is based on the benchmark 10-year government bond, one of the most liquid debt paper instruments in the country.
The BSE has enabled trading in single security future products, including, 7.16 per cent GoI maturing on May 20 2023, 8.83 per cent GoI maturing on November 25 2023, and calendar spread facility for trading across 3 contract months.

According to experts, the product is expected to become a popular hedging tool in its latest form after failing twice in the past.
The cash-settled IRFs would provide market participants with a better option to hedge against risks arising from fluctuations in interest rates.

Besides trading members, market participants like banks, FIIs, mutual funds, insurance companies, corporate houses, NBFCs, HNIs, etc can trade on this product.