Zerodha has confirmed that equity delivery will remain free, with no changes to brokerage fees despite adjustments in the market.
Starting today, changes in fees for options and futures trading have taken effect, following SEBI’s true-to-label circular.
Zerodha co-founder Nithin Kamath addressed the concerns around potential fee hikes in a statement on social media. “Equity delivery will continue to be free at Zerodha. As of now, we are not making any changes to our brokerage,” Kamath said.
The clarification comes after his earlier warning that brokers might have to adjust their business models due to SEBI’s circular.
SEBI’s new true-to-label rules, which went into effect on October 1, have shifted the fee structure that stock exchanges charge brokers.
Previously, transaction fees were based on the overall turnover contributed by brokers each month, with higher turnover brokers paying lower fees. The new system now imposes a uniform transaction fee across all brokers, regardless of turnover.
For example, the National Stock Exchange (NSE) will now charge Rs 2.97 per lakh of traded value in the cash market, Rs 1.73 per lakh in equity futures, and Rs 35.03 per lakh of premium value in equity options. For Sensex and Bankex options, the fee has been set at Rs 3,250 per crore of premium turnover value. This change in structure is expected to cause a 10% dip in Zerodha’s revenue, Kamath acknowledged.
In addition to these fee adjustments, changes in the Securities Transaction Tax (STT), announced in July’s budget, have also come into effect. The STT on options has been raised from 0.0625% to 0.1%, while the transaction charge has been reduced to 0.035%. Kamath explained this results in a net cost increase of Rs 2,303 per crore of premium on the selling side for NSE and Rs 2,050 per crore on BSE.
In the futures segment, STT has been increased from 0.0125% to 0.02%, with transaction charges reduced slightly to 0.00173%. This adjustment results in a net increase of Rs 735 per crore of futures turnover on the selling side, Kamath noted, adding that the impact is particularly significant for futures traders, as STT is charged on the entire contract value, unlike options where it is levied only on the premium.