Shares of stock broking firms declined on July 2, a day after markets regulator Sebi directed stock exchanges and other market infrastructure institutions (MIIs) to implement a uniform and equal charge structure for all members rather than varying charges based on their volume or activity.
At the close of trade, the stock of Angel One tanked 8.72%, Geojit Financial Services tumbled 6.83%, Motilal Oswal Financial Services dropped 4.19%, SMC Global Securities went lower by 2.81%, Dolat Algotech declined 2.28% and 5paisa Capital dipped 0.05% on the BSE.
During the day, shares of Angel One tumbled 10.50%, Geojit Financial Services tanked 7.59%, Dolat Algotech dropped 5.39%, Motilal Oswal Financial Services went lower by 4.63%, 5paisa Capital declined 4.51% and SMC Global Securities fell 4.13%.
The regulator instructed stock exchanges, clearing corporations, and depositories constituted as MIIs to ensure that any charges recovered from the end client are ‘True to Label’.
It means that if a certain charge is levied on the end client by members — stock brokers, depository participants, clearing members — it should be ensured by MIIs that the same amount is received by them.
“To begin with, the new charge structure designed by MIIs should give due consideration to the existing per unit charges realised by MIIs, so that the end-clients are benefited from the reduction of charges,” Sebi said in a circular on Monday.
The regulator has asked MIIs to comply with these additional principles while designing the processes for charges levied on their members, which are to be recovered from the end clients.
MIIs, being public utility institutions, act as first-level regulators, and are entrusted with the responsibility of providing equal, unrestricted, transparent and fair access to all market participants.