BSE shares A decision from the Securities and Exchange Board of India caused shares of BSE Ltd to plummet dramatically in early trading.
Following a direction about regulatory costs on options contracts from the market regulator Securities and Exchange Board of India (Sebi), shares of BSE Ltd suffered a dramatic decrease of more than 18% during Monday’s trading session. BSE was directed by the market regulator to pay regulatory costs based not only on the premium value but also on the “notional value” of option contracts.
Sebi advised BSE to make up any past payment deficiencies and to pay 15% annual interest on any sums that remained unpaid as a result of this modification.
Mr. S. S. Mundra, Chairman, BSE along with Mr. Sundararaman Ramamurthy, MD&CEO, BSE and other dignitaries on the dais Unveiling the New BSE Logo at the Celebration of 149th Foundation Day of BSE.
BSE shares fell 18.63% to Rs 2,612.10 on the National shares Exchange (NSE) as a result of this incident.
BSE shares were down 12.28% at Rs 2,816 a share at 10.40 am.
BSE responded by saying it was evaluating the legality of Sebi’s order. “In case, if it is ascertained that the said amount is payable, then the total differential SEBI regulatory fees for the past periods i.e. from FY 2006-07 to FY 2022-23, would be approximately Rs 68.64 crore plus GST which includes interest of Rs 30.34 crore,” the BSE stated in a filing with the NSE.
The BSE said that April 30 was the deadline for paying the FY24 Sebi regulatory fee. Based on premium turnover, the due amount was Rs.
The BSE pointed out that the differential SEBI regulatory fees for the year, if applicable, might be almost Rs 96.30 crore + GST.
Regulatory standards stipulate that stock exchanges must pay Sebi regulatory fees within 30 days after the end of the fiscal year. The exchange’s annual turnover, or the total value of all transactions made over the course of the year, is used to calculate the fee.Sebi stated that, in the case of options contracts, the notional value of the contracts—rather than only the premium value—is used to compute the “annual turnover.”
It was brought to light that BSE had only paid regulatory fees for a quarter of FY2006–07 rather than the entire fiscal year.
Ever since derivatives contracts were introduced, BSE has only paid regulatory fees based on the premium value of option contracts, not their notional value. This includes option contracts from the former United Stock Exchange, which merged with BSE in FY15.
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