Maximum Brokerage Charges as stipulated by SEBI

#1
Hi,

The maximum brok.charges allowed by sebi is 2.5%. No broker can charge more than this. Yet we find that brokerages charge more than 2.5% for Penny Stocks and Trade to Trade Stocks and Z Category Stocks.

Assuming that I purchase X Stock at Rs.20/- and the quantity purchased is 10000/- the rate as per Angel given to me is 0.04 per share chargeable to me, which means that 10000 x 0.04 = Rs.400/- (If the maximum brokerage stipulated by SEBI is 2.5% then how can Angel or any other brokerages charge on Per Share Basis).

Please advise if SEBI has another set of rules for Brokerages for Penny Stock, Trade to Trade Stocks and Z Category Stocks. If Yes, could I know the page from that rules which states as such. Otherwise, if there is no such rules then dont you think those who have been charged like this and those who have proofs should make a complaint to SEBI, NSE or BSE.

Your inputs to this query will help lots of investors/traders.
Regards,
 
#4
Hi,

The maximum brok.charges allowed by sebi is 2.5%. No broker can charge more than this. Yet we find that brokerages charge more than 2.5% for Penny Stocks and Trade to Trade Stocks and Z Category Stocks.

Assuming that I purchase X Stock at Rs.20/- and the quantity purchased is 10000/- the rate as per Angel given to me is 0.04 per share chargeable to me, which means that 10000 x 0.04 = Rs.400/- (If the maximum brokerage stipulated by SEBI is 2.5% then how can Angel or any other brokerages charge on Per Share Basis).

Please advise if SEBI has another set of rules for Brokerages for Penny Stock, Trade to Trade Stocks and Z Category Stocks. If Yes, could I know the page from that rules which states as such. Otherwise, if there is no such rules then dont you think those who have been charged like this and those who have proofs should make a complaint to SEBI, NSE or BSE.

Your inputs to this query will help lots of investors/traders.
Regards,

Hi,

The Maximum Brokerage of 2.5% means that if you have bought the value of stocks worth Rs. 100000 (1Lac) a broker can charge you maximum of Rs. 2500 and not more than this.

Hence, you are talking about penny stocks, so your broker isn't charging you more than the maximum brokerage.

Regards,
gurpreetsaluja
 
#5
I have sold 2 Shares of Network 18 @ Rs.37.85 = Total Rs.75.70 ...on which Brokerage @ 0.0568 per share ( @ 0.15% ) was charged = Rs.0.11 ( 11 Paise ) . However they have a minimum Brokerage of Rs.16 /- .....so they have charged me additional Rs.18.27 ( difference brokerage + Service Tax ).
Can they charge it ...or they have to charge only Rs.1.89 ( maximum Brokerage allowed by SEBI = 2.5 % )
Further if they are charging brokerage @ 16 % as per written in KYC Form( Minimum Rs.16 /- on a sale of Rs.100 /- ) ....but they are not using the word "Brokerage" ...but instead using some other words ....like "delivery handling charges" .....is it permissible

They are charging the additional Brokerage in the Ledger ...and not on Contract Note ....so that they would be seen as complying with SEBI Rules .

So basically I want to go behind the Rationale ....of why has SEBI given the restriction of 2.5 % ....and what does the word "Brokerage" include . Is it the total charges for Trading that can be collected from the investor ....or is it that the word "Brokerage" should not be used for charges of more than 2.5 % .....after that the Broker is free to charge any amount from the investor ...by using some other word .....like " extra Charges "
 

suri112000

Well-Known Member
#6
Fixed brokerage gives us an idea of the cost of the trade while we contemplate the trade. Zerodha, RKSV are examples of brokers who charge fixed brokerage.

The traditional brokers charge brokerage as a percentage of turnover. They have separate rules for penny stocks, minimum brokerage concepts which make our life miserable.

I blew my initial trading accounts while trading with Sharekhan. (Rs.50000 each ac funded).
When I finally sit to analyse my trades and brokerage, I have made Rs.10000 profit and I have paid Rs.60000 as brokerage and taxes. We need to be cost effective to win this game by analysis.

Whether we make profit or not, we are charged. Brokerage, exchange turnover charges, STT, service tax, cess etc are to be paid just because we trade. If you make profits, you need to pay Income Tax also. If you incur losses, you need to pay Tax audit fee to CA.

Entry and exit at same price has a huge impact on your money. Practically you are not making any loss in the trade, but as a whole you are.

Entrance of discount brokers has given a sigh of relief to traders to some extent. Zerodha is the ice breaker.

If i am salaried, I care to pay only Income Tax. There are further many exemptions to reduce the tax there.

If i am a businessman, I have lot of loop holes to escape the tax liability.

If you are a trader with a capital of less than Rs.5 lakh go with discount brokers.

If you are an investor for more than Rs.20 lakhs, go with established and renowned brokers as the impact of brokerage is not that much. You will have a safety of funds and holding of shares.
 

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