USE gains market share in absence of transaction charges

The market share of United Stock Exchange (USE), where currency derivatives are traded, has jumped around 10 per cent since August 22. Trading on the exchange has shot up ever since rivals National Stock Exchange (NSE) and MCX-SX started imposing transactions charges in the segment from August 22. The USE board is yet to take a decision on imposing these charges.

The market share of USE, which stood at 20-25 per cent in the currency derivative segment, has risen to around 33-35 per cent. Since August 22, it has witnessed volumes in the range of Rs 14,000- Rs 18,000 crore.

 

On an average, the currency segment saw trading volumes of around Rs 50,000-60,000 crore. These volumes crashed by 40 per cent after NSE and MCX-SX decided to impose transaction charges. As of now, NSE charges up to Rs 115 on every Rs 1 crore worth of trades in the currency segment in four slabs, while MCX-SX charges up to Rs 110 in three slabs. USE was expected to charge up to Rs 100 as transaction fee, sources said.
 

GAINING TRACTION (% market share)
	MCX	NSE	USE
22-Aug	31	38	29
23-Aug	32	32	35
24-Aug	31	32	35
25-Aug	36	29	33
26-Aug	35	30	33
29-Aug	34	27	38
(data compiled by BS Research Bureau)

Banks and New Delhi-based stock brokers generate the majority of volumes on the exchange.

The currency segment, launched in 2009, saw a gradual rise in volumes as exchanges didn’t impose any charge in their attempt to attract players. A fight between NSE and MCX-SX, however, saw the issue being challenged before the Competition Commission of India, which ruled that NSE impose transaction charges. Prior to imposing the fee, NSE and MCX-SX saw average daily trades of Rs 20,000-25,000 crore each.