The Securities and Exchange Board of India has slashed broker fees by 25% in an attempt to reduce overall cost of transactions. This brings down the fee from Rs 20 per transaction of Rs 1 crore to Rs 15 per crore of turnover. “Taking into consideration the projected income and expenditure of Sebi for the next three financial years, the board decided to reduce the fees payable by brokers,” said the market regulator in a statement on Saturday.
Besides, the board also decided to ask all market intermediaries and companies to make digital payments. The market regulator aligned the fees payable for buy back of securities with that for an open offer. It also introduced filing fees for draft scheme of arrangement and a processing fee for applications that seek relaxation, reported PTI.
It also tightened merger and acquisitions rules. The regulator decided that in case of merger of an unlisted company with a listed one, it would have to meet the minimum public shareholding requirement of 25%, reported Economic Times. “The objective is to have wider public shareholding and to prevent very large unlisted company to get listed by merging with a very small company,” said Sebi.
The board also gave stock exchanges the power to take action against listed companies for non-compliance. Stock exchanges can now levy fine and suspend trading as a form of penalty. This decision was taken to reduce the cost of adjudication. “Delegating responsibilities to them [stock exchanges], through empowering them, also makes them accountable for any malfunctioning in the listed company,” former Sebi official Sumit Agarwal told The Hindu.
The market regulator also allowed mutual funds to invest up to 10% of its net asset value in real estate investment trusts and infrastructure investment trusts. Besides, it decided to allow celebrities to endorse mutual funds at industry level.