Sebi considers equal treatment to equity and commodity brokers

Markets regulator the Securities and Exchange Board of India (Sebi) has intended to treat brokers of commodity exchanges at par with their counterparts at equity exchanges in terms of registration and transaction fee ahead of registration process.

In a meeting recently held with representatives of commodity broking fraternity, Sebi said that commodity brokers should be treated at par with equity brokers and therefore, pay uniform registration fee of Rs 50,000 per member as currently paid by equity brokers.

Apart from that, Sebi also said that there should be uniformity in transaction fee. Therefore, commodity brokers should pay Rs 20 per Rs 1 lakh worth of transaction done, similar to equity brokers.

Sebi is currently in he process of framing guidelines for commodity brokers' registration with it ahead of the proposed merger of the Forward Markets Commission (FMC) with it.

While the commodity brokers' registration is set to start by August-end, FMC's merger with Sebi is expected to complete by September.

Commodity brokers, however, have recommended Sebi to distinguish between national and regional brokers, in addition to have a differentiation in agri and non-agri segments within commodities for differential treatment.

According a member of the team which deliberated with Sebi, commodity brokers proposed a registration fee of Rs 50,000 for a national level broker and Rs 25,000 for a regional player as against Sebi's view if uniform registration fee of Rs 50,000.

"We argued that regional players have limited power and hence should be allowed to pay lesser. For national level player, registration fee of Rs 50,000 is okay", he said.

In case of transaction charge also, commodity brokers urged Sebi to fix at Rs 10 per Rs 1 lakh of transaction in case of CTT (commodity transaction tax) levied commodities i.e. gold, silver, base metals anf processed agri commodities. In case of farm goods like guar, the transaction charge is proposed at Rs 5 per Rs 1 lakh of transaction.

The proposal was submitted to Sebi in response to the recommendations asked for.