The Bombay Stock Exchange has increased the transaction charges for trading for two of its options contracts in the equity derivatives segment from May 13. This comes after Securities and Exchange board of India sought higher regulatory fee from the bourse, which stands to impact its earnings.
The revised prices will apply on S&P BSE Sensex Options and S&P BSE Bankex Options, the exchange said in a circular on Tuesday.
The transaction charge between May 1 and May 10 will be as per the current methodology. However, for the period between May 13 and May 31, the premium turnover of these contracts will be cumulated, and the transaction charges will be charged based on the slab on the incremental turnover basis.
The regulator last week asked BSE to pay the regulatory fee on the annual turnover, considering “notional value” in the case of options contracts instead of premium turnover that the exchange was paying for years.
Derivatives make up about 40% of BSE's FY25/26 net profit estimates, according to Jefferies. The one-time impact of the directive would lead to a 15% cut in the company's earnings per share for FY24, according to the brokerage.
Brokerages had expected that BSE could increase the options tariffs, which are the total transaction costs a trader pays to the exchange while trading options contracts.
"Another way to offset the impact of higher regulatory fees is to increase the transaction charges by ~25% and reduce clearing charges by ~10%, which will reduce the impact to only -5/-2% for FY25/26E," as per HDFC Securities.
BSE's revision in charges also comes a month after its rival National Stock Exchange approved the reduction in overall transaction charges across cash equity and equity derivatives segments/products by 1%, with effect from April 1.
"BSE bringing its prices on par with those of the NSE would offset two-thirds of the incremental hit for the exchange immediately," Jefferies' note had said.
BSE had last revised its transaction charges in the equity derivatives segment on Oct. 23, 2023, and compared to those, the current tariffs show an increase in the range of 34-48%, as per the table above.
Shares of BSE closed 0.6% higher at Rs 2,788 apiece on the NSE on Tuesday, as compared with the Nifty 50 ending 0.17% lower at 22,604. The stock has outperformed in the last year and has rallied over 428% in a year's time.
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