SC admits Sebi appeal on brokers’ registration fees

MUMBAI: The Supreme Court has admitted an appeal from the Securities and Exchange Board of India (Sebi) challenging a November 2005 Delhi High Court order which said only a single registration with Sebi is required even if a stock broker has membership of and functions from, several stock exchanges. This meant that a stock broker would have to pay registration fee with Sebi only for the first registration and doesn't require any further registration even if he operates in several stock exchanges.

The Delhi High Court order had said that if the broker had paid any fee to Sebi for any subsequent registration after his first registration, the fee had to be refunded to him by Sebi.

While this order was annulled by the Supreme Court in March 2006, with the admission of the Sebi appeal on Tuesday, the Supreme Court also made it clear that status quo will be maintained. It means that brokers will have to pay the registration fees to Sebi for as many exchanges in which they operate.

While the older brokers pay a fixed-amount per Rs 1crore of transactions for the initial 5 years, and then a flat rate for the next 5 years, the new brokers have been given the option of paying a lower fixed amount per Rs 1crore worth of transaction for their entire lifetimes. This will have to be given for each exchange in which the broker operates.