MCX revises transaction fees for F&O contracts after Sebi directive

The Multi Commodity Exchange of India (MCX) on Tuesday said it has revised transaction fees for futures and options (F&O) contracts after a directive from the markets regulator Sebi.

The new rates will be effective from next month.

According to a statement by MCX, the new fees will be ₹2.10 per lakh of turnover for futures and Rs41.80 per lakh of premium turnover for options.

Following the directive of the Securities and Exchange Board of India (Sebi), the MCX has moved from a tiered fee system to fixed transaction fee structure.

“Members shall ensure that the Exchange transaction fees, if recovered from the end client should be True to Label, i.e. the fees levied on the end client by members shall not exceed the exact amount as charged by the Exchange to the member,” MCX said in the statement.

Previously, the markets regulator had raised concerns about the existing slab-based fee system used by some market infrastructure institutions (MIIs), including MCX.

It had highlighted that this system could result in clients being charged more than what MIIs actually get, creating potential transparency issues.

The regulator had called for a uniform fee structure, moving away from the slab-based approach to potentially reduce costs for clients.

In July, the Sebi in its consultation paper had proposed seven measures, including increasing minimum contract size and upfront collection of option premiums, intra-day monitoring of position limits, rationalisation of strike prices, removal of calendar spread benefit on expiry day and increase in near contract expiry margin.

Sebi stated that these measures are aimed at enhancing investor protection and promote market stability in derivative markets.

The proposed margin increase for options sellers close to expiry could reduce leverage and profitability, especially for retail traders with limited funds.

Earlier, Sebi research showed retail traders lose money in nine out of 10 trades in the F&O segment.