MCX Stock Exchange offers up to 50 per cent lower transaction fees

MUMBAI: In a bid to woo the probable broker-members to its bourse, Financial Technologies-promoted MCX Stock Exchange (MCX-SX) today announced lower transaction charges to the tune of 50 percent of those charged by other exchanges for its exchange platform slated to start around Diwali.

"Our transaction charges for members are around 50 percent less than the other exchanges," chairman and ceo of financial technologies Jignesh Shah told reporters today while kicking off nationwide road-shows for membership drive here.

Justifying the lower fee structure, Shah said, "the optimisation in transaction charges, along with optimal membership structure will lower the entry barriers to capital markets, thereby fostering inclusive growth."

After a near-two year wait, Sebi gave its nod to MCX-SX to launch an equity trading platform last month.

The MCX-SX will charge Rs 2 per Rs 1 lakh trading in the equity cash segment if the total traded value in a month is under Rs 1,000 crore while it will be Rs 1.75 per Rs 1 lakh if the monthly volume is over Rs 1,000 crore and under Rs 5,000 crore, Shah said, adding if the volume is over Rs 5,000 crore, then the transaction fee will be Rs 1.50 per Rs 1 lakh.

On the equity futures segment, it the total traded value in a month is under Rs 2,000 crore, the charge will be Rs 1.20 per Rs 1 lakh, and if it is over Rs 2,000 crore and under Rs 10,000 crore, it will be Rs 1.10 per Rs 1 lakh. But if the volume exceeds Rs 10,000 crore a moth, the chargeable fee will be a low Rs 1 per Rs 1 lakh, the exchange said.

On the equity options front, the fee will be a flat Rs 25 per Rs 1 lakh of the premium for any the traded volume in a month.

The exchange also introduced a cost optimal membership fee and deposit structure of Rs 25 lakh as net outlay valid till October 18, capping the total outlay for an MCX-SX membership to Rs 50 lakh.

As per regulatory requirement, the minimum deposit (base minimum capital) is Rs 10 lakh and networth (paid-up capital) is Rs 30 lakh for cash equity and trading membership of F&O segments.

Shah claimed that the structure proposed by his exchange will release significant capital for members which will otherwise be blocked by exchanges, despite there being no need of it.

The membership is also transferable after three years as per rules and guidelines of the exchange, he added.

The deposits and networth requirements will increase once members opt for additional segments or for clearing or with the growth in their business, the exchange said.

The MCX-SX will be offering membership in three categories, namely, composite members, professionally qualified members and rural entrepreneur members, managing director and chief executive Joseph Massey said, adding the last two category of memberships are introduced for financial inclusion and market development.

The rural entrepreneur memberships are designed for persons located in those 5,924 sub-districts and talukas, beyond the existing 2,000, where there is no capital market penetration, Massey said.

Beginning today through September 21, the company will hold road-shows in Ahmedabad, New Delhi, Kolkata, Chennai, Hyderabad, Jaipur and Indore, he said.