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Opinion
Livemint 1 min read 04 Jul 2024, 07:00 AM IST
Summary
- Sebi’s directive that marketplace infrastructure institutions indispensable complaint members a azygous interest unlinked to trading volumes sent discount brokers into a tizzy. Zerodha co-founder Nithin Kamath said the concern whitethorn person to rethink its model.
A caller circular from the Securities and Exchange Board of India (Sebi) seems to person sent discount brokers into a tizzy. Zerodha co-founder Nithin Kamath said the institution whitethorn person to reconsider its zero-brokerage model, oregon adjacent summation brokerage fees for trades successful the futures and options (F&O) segment, aft Sebi’s directive that each marketplace infrastructure institutions, including banal exchanges, indispensable complaint members a azygous interest unlinked to trading volumes.
As Kamath’s remarks suggest, this whitethorn shingle up the pricing models of discount brokers, since they don’t complaint brokerage for equity investments but marque up for it done F&O trades and different services. The zero-brokerage exemplary has been their cardinal selling proposition. It appeals to customers who similar low-cost marketplace entree adjacent if it means forgoing probe notes and proposal that full-service brokers connection successful lieu of higher charges.
Also read: SEBI circular for MIIs: How it volition interaction brokerage firms
But nether Sebi’s caller mandate, discount brokers whitethorn beryllium forced to complaint more. This could blunt their outgo borderline implicit full-service brokers. But then, with ample idiosyncratic bases already built and different claimed advantages, particularly successful younker engagement, they person abstraction to adapt.
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