SUMMARY
- Zerodha to keep brokerage fees unchanged despite new SEBI rules.
- SEBI’s true-to-label circular standardizes transaction fees across stock exchanges.
- Zerodha expects a 10% revenue dip due to the fee structure change.
Nithin Kamath, the billionaire founder and CEO of Bengaluru-based Zerodha, confirmed on Tuesday that the company will not increase its brokerage charges despite the implementation of SEBI’s true-to-label circular, which came into effect on October 1. Kamath stated on X (formerly Twitter), “Equity delivery will continue to be free at Zerodha. As of now, we are not making any changes to our brokerage.”
The Securities and Exchange Board of India (SEBI) circular aims to standardize fee structures across stock exchanges, with BSE and NSE now charging uniform transaction fees. Brokers who previously paid lower fees due to higher turnover will now face a flat transaction fee for all trades, which could have significant financial implications for brokerage firms.
New Transaction Fee Structure:
- NSE Cash Market: Rs 2.97 per lakh traded value (each side)
- Equity Futures: Rs 1.73 per lakh traded value (each side)
- Equity Options: Rs 35.03 per lakh of premium value (each side)
- Sensex & Bankex Options: Rs 3,250 per crore of premium turnover value
While these fees represent a shift in how transaction costs are calculated, Kamath emphasized that Zerodha remains committed to maintaining its current brokerage structure. However, he acknowledged the potential financial impact of SEBI’s new guidelines, estimating a 10% revenue dip for Zerodha due to the revised fee structure.
Impact of Budget 2024 Changes:
In addition to SEBI’s regulations, the July 2024 Budget introduced changes in the Securities Transaction Tax (STT), which also took effect on October 1:
- Equity Options: STT increased to 0.1% (up from 0.0625%)
- Equity Futures: STT hiked to 0.02% (up from 0.0125%)
Kamath explained that the net impact of these changes will increase trading costs for both options and futures traders. For example, the cost of trades in equity options will rise by Rs 2,303 per crore of premium on the selling side on NSE, and futures trades will see an increase of Rs 735 per crore of turnover on the selling side. As STT is levied on the entire contract value for futures, the effect will be more pronounced for futures traders.
Kamath further explained, “Since STT is charged on the entire contract value for futures, whereas in options, it is charged only on the premium, the impact will be much larger for futures traders.”
Despite these regulatory changes, Zerodha remains committed to offering competitive trading services without increasing its brokerage fees at this time.
