Sebi to unbundle clearing and trading fees to boost transparency

Explores whether charges paid to exchanges and clearing corporations can be unbundled

The Securities and Exchange Board of India (Sebi) is aiming to further boost transparency around trading charges incurred by investors.

 

The regulator has embarked upon a drive to unbundle fees charged by stock exchanges and clearing corporations (CCs) — a move that will provide greater clarity on the trading cost structure.

 

The move is critical for independence of CCs from stock exchanges. However, a long-mooted proposal for changing ownership has been put on the back burner.

 

Following its board meeting on June 18, 2025, Sebi Chairman Tuhin Kanta Pandey clarified that the regulator was not pursuing structural or ownership changes for CCs.

 

Instead, Sebi has established a working group to examine the separation of trading and clearing charges, and to assess the independence and governance of CCs, which are currently wholly owned subsidiaries of stock exchanges.

 

This initiative aims to enhance transparency by clearly delineating fees paid to exchanges and CCs.

 

The working group, comprising market representatives, will evaluate measures to ensure CCs are financially self-sufficient, in order to fund their capex requirements, and also to contribute to the Settlement Guarantee Fund (SGF).

 

Currently, CCs rely on exchanges for capital investments and SGF contributions.

 

“We need clarity on costs and sustainability. Unbundling addresses governance concerns, ensuring independent oversight and distinct charges for clearing and trading,” Pandey stated. 

 

Another Sebi official noted that unbundling was unlikely to increase costs for investors but would provide a clear breakdown of fees, which was currently unavailable.

 

Narinder Wadhwa, managing director & chief executive officer (CEO) of SKI Capital Services, emphasized: “Clients deserve transparency on fee components — CC charges and broker margins. This will foster accountability and competition among clearing service providers. Sebi may mandate standardised disclosure norms for clearing-related fees in future circulars.”

 

CCs are market infrastructure institutions that carry out key functions like trade confirmation and settlement.

 

Mrugank Paranjape, managing partner at MCQube and chairman of the IMC Task Force on Capital Markets, stated: “In a multi-exchange market, CCs must remain closely aligned with their parent exchanges.”

 

He cautioned that diluting ownership could weaken the SGF, which has bolstered India’s investor-friendly image.

 

In 2023-24 (FY24), the NSE contributed ₹1,883 crore to the SGF, with an additional ₹22 crore on behalf of members while NSE Clearing and BSE's Indian Clearing Corporation Ltd (ICCL) added ₹1,103 crore and ₹92 crore, respectively, to the core SGF.

 

Globally, most CCs, such as CME Clearing, ICE Clear Credit, and Eurex Clearing, are owned by single exchanges. Exceptions include multi-shareholder-owned CCs like Euroclear and China’s CSDC — owned by two exchanges. India avoids the member-owned DTCC model to prevent conflicts between CCs and clearing members.

 

The working group’s recommendations, expected in the coming months, will shape the path toward greater transparency and financial autonomy for India’s CCs, believe experts. 

Regulatory push

 

Sebi working group to look into the break-up of charges, i.e. unbundling

 

Discussions on how to make clearing corporations self-sufficient for profit, SGF, and capex

 

Sebi chairman clarifies that regulator not looking to alter structure or ownership of clearing corporations

 

Sebi proposal on hiving off clearing corporations from stock exchanges had raised concerns