Markets regulator Securities and Exchange Board of India (Sebi) has taken a big decision to help market participants tide over the financial challenges due to COVID-19 pandemic. In a major development, Sebi has reduced broker turnover fees and filing charges on offer documents for public offering, rights issue and buyback of shares.

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The broker turnover fee has been reduced to 50 per cent of the existing fee structure for the period June 2020 to March 2021, the Securities and Exchange Board of India (Sebi) said in a notification dated May 8. The benefit of such reduction in fees will automatically be passed on to the investors.

"Every stock broker in cash segment, equity derivatives segment, currency derivatives segment, interest rate derivatives segment and commodity derivatives segment (other than agri commodity derivative) liable to pay fees as a percentage of their turnover...For period June 1, 2020 to March 31, 2021, pay only 50 per cent of fees as calculated therein, including for off-market transactions undertaken by them," the regulator noted.

Fees for filing offer documents

Besides, fees for filing offer documents for public issue, rights issue and buy back of shares have been reduced to 50 per cent of the existing fee structure. This will be effective for documents filed from June 1, 2020, to December 31, 2020.

Buyback

With regard to buyback, the regulator said a fee of Rs 2.5 lakh would be charged for filing draft papers for issues worth up to Rs 10 crore, and the same would be 0.25 per cent of the offer size for issue size of over Rs 10 crore but less than Rs 1,000 crore. For issue size of more than Rs 1,000 crore, Sebi said a fee of Rs 2.5 crore along with a portion of the offer size would be charged.

In respect of public issues, the regulator has cut fee by 50 per cent to Rs 25,000 for filing draft documents for offer size of up to Rs 10 crore, while the same has been reduced to Rs 12,500 from Rs 25,000 for rights issues of up to Rs 10 crore. Fee has also been cut by half for issue size of over Rs 10 crore , among others.