Nithin Kamath, co-founder of Zerodha, took to X (formerly known as Twitter) to respond to the recent order released by the National Stock Exchange.
Kamath said that they will be stopping their referral programme and making one-time payouts for whatever is due. They will continue to give out reward points every time any user refers a customer to them, the tweet said. "By the way, 12.4 lakhs of our customers have referred at least one client to date."
NSE issued a circular last week stopping brokers from sharing any brokerage as a referral incentive unless that person is registered as an authorized person with the exchanges. This is another one of those circulars that will hurt the business. 😬
So, we are stopping our… pic.twitter.com/cQgAAl5tGHOn Wednesday, Zerodha announced that it will stop sharing brokerage revenue for demat account referrals starting Aug. 25, 2024.
To protect the investors' interests, NSE earlier issued a directive that prohibited brokers from giving any brokerage as a referral incentive unless the user referring is registered as an authorised individual with the bourses.
The exchange thinks that if brokers share part of their fees as referral rewards, it might encourage their referrals to trade more, which isn't good for customers.
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