NSE and BSE revise their transaction fees to comply with Sebi circular

by Hansraj Agrawal | Sep 27, 2024 | Share Market

2 min read Last Updated : Sep 27 2024 | 9:17 PM IST

Stock exchanges National Stock Exchange (NSE) and BSE on Friday revised their charges for various segments in the market to align them with the true-to-label circular issued by the Securities and Exchange Board of India (Sebi), which mandates uniform fees irrespective of turnover. Until now, the exchanges were charging slabwise fees based on the turnover generated by stock brokers.

Effective October 1, the new charges will be applicable.

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NSE revised the charges for the cash market to Rs 2.97 per side per lakh of traded value. For equity futures, the exchange will charge Rs 1.73 per side per lakh of traded value, while for equity options, it will levy a fee of Rs 35.03 per side per lakh of premium value.

All Sensex and Bankex options will have a transaction fee of Rs 3,250 per crore of premium turnover value, while stock options and Sensex 50 options will have a transaction fee of Rs 500 per crore of premium turnover value, said BSE in a circular. However, the same for index futures and stock futures will remain nil at BSE.

Charges in the currency futures and options segments have also been revised by both exchanges.

Other market infrastructure institutions (MIIs), like Central Depository Services and Multi-Commodity Exchange (MCX), have also revised their charges as per the Sebi mandate.

“It (Sebi circular) also directs that the MII charges, which are to be recovered by the trading members from the end clients, should be true to label, wherein the amount recovered from end clients is the same as the amount paid by the trading members to the MIIs,” said NSE in the circular.

First Published: Sep 27 2024 | 9:17 PM IST

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Indian investors paying hefty premiums to invest in China markets

by Hansraj Agrawal | Sep 27, 2024 | Share Market

3 min read Last Updated : Sep 27 2024 | 10:51 PM IST

Indian investors are paying hefty premiums to invest in China markets, with stocks there posting their biggest weekly gain in nearly 16 years.

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Savvy investors were seen making a dash to invest in the only two China-focused exchange-traded funds (ETFs) available in the domestic markets.

On Friday, Mirae Asset Hang Seng Tech ETF closed at Rs 16.9 on the NSE, nearly 7 per cent higher than its indicative net asset value (iNAV) or the fair value of Rs 15.9. Likewise, the Nippon India ETF Hang Seng BeES ended the session at a 6 per cent premium over its iNAV.

According to mutual fund (MF) officials, the premium was a result of high demand for the ETFs coupled with a lack of supply of new ETF units.

“There are limited MF investment options for China exposure. With the Chinese market starting to go up, the demand has shot up. However, the number of ETF units available for trade remains the same as fund houses cannot create fresh units due to the limitations on foreign investments,” said a senior executive.

In January 2022, Sebi had to stop fund houses from taking fresh subscriptions in schemes investing in overseas stocks after the industry exhausted its international investment limit of $7 billion. The industry was later offered leeway to invest, provided the overall exposure remains lower than the February 2022 levels.

However, most international funds have largely remained closed for fresh investments. As a result, the ETFs have been the only available route for investment.

This has led to ETFs trading at high premiums on several occasions over the past two years. In April 2024, Mirae Asset Mutual Fund cautioned investors that its international ETFs were trading at significant premiums, asking them “to take precautions while buying the ETFs on the exchange and also to put ‘limit order’ while buying and selling the overseas ETFs after looking/referring to the iNAV published on the AMC’s website”.

The CSI 300 Index, a gauge for performance of big Chinese companies, rose 4.5 per cent, extending its weekly gain to 15.7 per cent — most since 2008. Meanwhile, Hong Kong’s Hang Seng Index surged 13 per cent this week, marking its best weekly gain in 26 years. The rally was led by Beijing’s stimulus measures, including the People’s Bank of China (PBC) cutting the amount of cash that banks must hold as reserves by 0.50 percentage points.

The interest of Indian investors is also led by a steep valuation differential between the Indian and Chinese equity markets.

The demand for the Hang Seng ETFs was also visible in the volumes. In NSE, the number of trades in Nippon India ETF Hang Seng BeES stood at 10,254 on Friday compared to an average of 3,605 in the previous 20 sessions. The total value of trades stood at Rs 31 crore vis-a-vis the average of Rs 4.7 crore in the previous 20 sessions.

Similarly, the total value of trades in Mirae Asset Hang Seng Tech ETF jumped to nearly Rs 26 crore in the NSE compared to an average of Rs 2.3 crore in the previous 20 sessions.

First Published: Sep 27 2024 | 9:04 PM IST

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BSE revises transaction fee for derivatives; KRN Heat IPO subscribed 214x

by Hansraj Agrawal | Sep 27, 2024 | Share Market

3 min read Last Updated : Sep 27 2024 | 8:56 PM IST

The stock exchange BSE on Friday announced a revision in its charges for equity derivatives to align with the true-to-label circular by the Securities and Exchange Board of India (Sebi), which mandates a uniform fee irrespective of turnover. Till now, exchanges were charging slabwise fees based on turnover generated by stock brokers. Effective October 1, all Sensex and Bankex options will have a transaction fee of Rs 3,250 per crore of premium turnover value, while stock options and Sensex 50 options will have a transaction fee of Rs 500 per crore of premium turnover value. However, the same for index futures and stock futures will remain nil. Charges in the currency futures and options segments have also been revised. Other market infrastructure institutions have also revised their charges as per the Sebi mandate.

KRN Heat IPO subscribed 214 times

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KRN Heat Exchanger, a key component supplier to the air conditioning industry, saw its IPO garner 213 times subscription, ranking as the 9th most subscribed issue on the mainboard, as per IPO portal Chittorgarh.com. The Rs 342-crore offering generated bids worth over Rs 51,600 crore. Shares in the IPO were priced between Rs 209-220 per share. The offering was entirely a secondary share sale.

Property Share files draft documents for first SM REIT

Property Share Investment Trust has filed draft documents for a small and medium real estate investment trust (SM REIT) for a scheme aggregating up to Rs 353 crore. The proceeds from the offer are proposed to be utilised primarily for the acquisition of the Prestige Tech Platina asset by the Platina SPVs. ICICI Securities Limited is the sole lead manager to the offer. This will be the first such offering since the fractional ownership platforms in the real estate segment were brought under the ambit of the Securities and Exchange Board of India (Sebi). While Property Share was the first to secure registration with the market regulator, nearly half a dozen others are awaiting approval.

AngelOne settles matter with Sebi by paying Rs 21.64 lakh

Broking firm AngelOne has settled a matter with the market regulator pertaining to alleged front-running by an authorised person (AP) associated with the broker on trades of several big clients, including Bharat Kanaiyalal Sheth Family Trust. The brokerage firm paid Rs 21.64 lakh as a settlement amount to the Securities and Exchange Board of India (Sebi) without admitting or denying the allegations. Sebi had observed that the orders executed in the accounts of clients by the AP were done without maintaining a record of the order instructions, and the signatures on the order instruction sheets were taken after the orders were executed. AngelOne was issued the show-cause notice in April 2024, while it filed for settlement in May. A high-powered advisory committee of Sebi recommended the amount, and a panel of whole-time members approved the settlement.

India’s foreign exchange reserves hit another new record high of $692 billion

India’s foreign exchange reserves rose by $2.8 billion to hit another new all-time high of $692 billion in the week ended September 20, latest data by the Reserve Bank of India showed. The reserves hit a new high for the fifth consecutive week. The previous record high of $689 billion was hit in the week ended September 13. The total reserves rose on the back of an increase in foreign currency assets, which rose by $2.05 billion during the week. Gold reserves rose by $726 million during the week, whereas SDRs increased by $121 million.

First Published: Sep 27 2024 | 8:56 PM IST

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Nifty ends 6-day winning streak as rising FPI flows to China raise concerns

by Hansraj Agrawal | Sep 27, 2024 | Share Market

3 min read Last Updated : Sep 27 2024 | 10:54 PM IST

The Nifty snapped its six-day winning streak on Friday, while the Sensex ended lower after two consecutive days of gains amid concerns over increasing foreign portfolio investor (FPI) flows to China.

Losses in banking heavyweights HDFC Bank and ICICI Bank weighed on the markets but gains in Reliance Industries and IT majors Infosys and HCL Technologies helped mitigate losses.

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After gaining 3.3 per cent in the previous six sessions, the Nifty ended at 26,179, a decline of 37 points or 0.14 per cent.

The Sensex ended the session at 85,572, a drop of 264 points, or 0.3 per cent.

FPIs were net sellers to the tune of Rs 1,209 crore, and domestic institutional investors (DIIs) were net buyers to the tune of Rs 6,887 crore. The robust flows from DIIs were on account of the rebalancing of Nifty indices.

The gains in Chinese markets on Friday and the recent reports about Beijing’s efforts to revive its economy have led to speculation about its effect on FPIs flows to India.

Analysts said that of the top 45 emerging market (EM) funds, 80 per cent are underweight on China.

If these funds reverse their underweight position, more flows could go into China at India’s expense, they said.

Chinese equities trade at less than half the valuation of Indian markets, and the latest measures by China to boost its economy are seen as impactful, with the China markets posting their biggest weekly jump since 2008.

This week, China’s top leaders pledged to support fiscal spending and make efforts to stabilise its property sector.

They announced one-time cash handouts to residents facing economic difficulties and hardship and promised more benefits for the unemployed populace.

The BSE Metal index rose by 1.2 per cent on hopes that new Chinese stimulus measures will boost global demand for metals and commodities.

The Nifty IT index rose 0.4 per cent after the stock of their US-listed peer Accenture due to demand for its AI-related services. Analysts said an improvement in the demand outlook in the US can benefit IT firms.

“While a strong recovery in discretionary demand may take a few quarters, it is unlikely to worsen further, in our view. We expect revenue growth for large-caps to improve in FY26 first half. Interest rate cut cycle and a potential thaw in decision-making by US corporates post US elections in November 2024 could provide a fillip to demand,” said Nomura in a note.

The potential flow rotation of India into China could determine the market trajectory over the next few weeks, said experts.

Traders will maintain a light position ahead of the second quarter earnings season, they added.

“Following the recent impressive surge, the benchmark indices experienced a sideways movement as investors engaged in profit booking at elevated levels. Investors are looking forward to the second earnings report, anticipating an improvement in earnings outlook,” said Vinod Nair, head of research of Geojit Financial Services.

The market breadth was mixed, with 1,979 stocks advancing and 1,957 declining.

First Published: Sep 27 2024 | 8:48 PM IST

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Sebi plans half-yearly disclosures for direct plan mutual fund schemes

by Hansraj Agrawal | Sep 27, 2024 | Share Market

2 min read Last Updated : Sep 27 2024 | 8:23 PM IST

The Securities and Exchange Board of India (Sebi) has proposed to make it mandatory for fund houses to make separate disclosures for direct plan and regular plan schemes in their half-yearly financial results.

So far, the disclosures are only for regular plans. The reports include details like expenses, returns, and yields of the schemes.

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Currently, asset management companies (AMCs) only disclose this information for regular plans, but since direct plans have different expense ratios and returns, Sebi believes it’s essential to provide them separately.

This increased transparency will help investors understand the impact of fees on their investments.

“Considering that the expenses, expense ratio, returns, and yields for direct plans and regular plans are different, it is proposed that such disclosures pertaining to both direct plans as well as regular plans may be disclosed in a standard format,” Sebi stated in a consultation paper.

In addition, the regulator plans to bring in a colour-coded risk-o-meter, with low risk denoted by green and high risk by red. At present, the risk-o-meters are in black and white.

“To further enhance the pictorial representation of risk, it is proposed that the risk-o-meter should be colour-coded. It is also proposed to standardise the format for disclosure of changes in risk-o-meters of a mutual fund scheme as well as its benchmark,” the regulator said.

First Published: Sep 27 2024 | 8:16 PM IST

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Angel One pays Rs 22 lakh to settle front running trade case with Sebi

by Hansraj Agrawal | Sep 27, 2024 | Share Market

3 min read Last Updated : Sep 27 2024 | 8:05 PM IST

Angel One on Friday settled an alleged front-running case with capital markets regulator Sebi by paying Rs 21.64 lakh towards settlement charges.

The settlement order came after Angel One had filed a settlement application on May 15, 2024, proposing to settle the instant proceeding “without admitting or denying the findings of fact and conclusions of law”.

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“It is hereby ordered that the instant proceeding initiated against the Applicant, vide Show Cause Notice dated April 24, 2024, is disposed of,” Sebi said.

Sebi had undertaken an investigation to ascertain whether there was any violation of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules by certain entities during the period from January 2021 to October 2022, who were consistently placing orders ahead of the Big Clients, including Bharat Kanaiyalal Sheth Family Trust in the equity (cash) segment of NSE and were squaring off the same.

The investigation revealed that Jitendra Kewalramani, who was the Authorised Person (AP) of Angel One Ltd (Noticee/ Applicant) was, directly or indirectly, in possession of the details of the impending orders to be placed by the big clients.

Accordingly, front-running trades were allegedly executed by him in his own trading account and the trading accounts of certain other entities, who were all related/ associated with him during the investigation period, Sebi said.

It was further observed that all the alleged front runners, except two entities, had executed their front-running trades through the noticee (Jitendra Kewalramani), the AP of the noticee was alleged to be the main front runner of the front-running orders executed.

The regulator also observed that the orders executed in the accounts of his clients by the AP were done without maintaining a record of the order instructions given by the clients as mandated by Sebi.

Further, the signatures on the order instruction sheets were taken after the orders were executed. Kewalramani had not maintained a record of the pre-order placement and had obtained such documents from the clients after the orders were executed.

According to Sebi norms, the stock broker will be responsible for all the acts of omission and commission of his authorised person(s) and/or their employees, including liabilities arising therefrom.

Thereafter, a Show Cause Notice was issued by the regulator to Angel One on April 24, 2024.

In its show cause notice, Sebi alleged that the noticee had failed to maintain a proper record of the execution of trades of clients in the form of a Voice Recording System (VRS) to record the placement of orders by the clients through its AP and to maintain order sheets with a time stamp indicating the time when the order for trade was placed by its client.

Accordingly, Angel One allegedly failed to exercise due skill and in compliance with statutory requirements in violation of the code of conduct of Stock Brokers rules.

Pursuant to receipt of the settlement application, the applicant filed revised settlement terms and submitted details of the corrective action/ measures put in place by it to prevent the re-occurrence of similar violations.

After remitting the settlement fee of Rs 21.64 lakh, Angel One settled the case with Sebi.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sep 27 2024 | 8:05 PM IST

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