Brokerage firm Zerodha may end the ‘Zero Brokerage Framework’. Along with this, it can increase the fees for trading in futures and options (FO). Zerodha’s co-founder and CEO Nitin Kamath has given these indications. This may be due to the new circular of the market regulator Security Exchange Board of India. He wrote on the social media platform X – SEBI has recently issued a circular. It states that Market Infrastructure Institutions (MII) should levy the charge to be levied from October 2, 2024 ‘as per the label’. This circular will not only affect brokers but also trading and investing customers. Revenue stream ended due to the new circular Nitin Kamath said that stock exchanges charge transaction fees based on the total turnover done by the broker. The difference between the fees that brokers charge from customers and the fees that the exchanges charge from the broker at the end of the month goes to the broker. Such discounts are common in major markets around the world. These rebates are around 10% of our revenue and between 10-50% for other brokers in the industry. With the new circular, this revenue stream has ended. Zero brokerage structure will have to be abandoned Nitin Kamat said that we are one of the last brokers who offer free equity delivery trades. We are able to do this because the revenue generated from FO trading is able to compensate for the charges. With the new circular, we will most likely have to abandon the zero brokerage structure or increase the brokerage for FO trades. Brokers across the industry will also have to change their prices.
