Upfront brokerage: SEBI

I have been told before that my view on upfront brokerage is wrong. But anyways, wanted to share the link on BS today:

http://www.business-standard.com/ar...wns-on-prepaid-brokerages-113052000680_1.html

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If I comment in one of the brokers thread, I am supposed to be a big broker who is bad mouthing. Hence created a thread.

Basically wants to stop the practice of charging upfront brokerage and this has been in discussion for a bit. Looks like the time is around.

In one of my posts what I had writtend is exactly what the SEBI has mentioned. Brokerage can be charged only after a service has been provided and not before.

What I want to know is what do all the brokers who are practicing are planning to do? The reason I am posting here is because there are a lot of them active on the forum.

These guys might come and say, we are charging so little 500/month, 1000/month or whatever while they are talking about people who collect 10000/month.


You steal a small earphone or you steal a big screen TV, you are still stealing aren't u??

My question is directed only at the brokers..

Factually speaking charging upfront brokerage certainly doesn't sound good. But scenario is different when offsetting of brokerage for trades in future is adopted [in many cases forfeited if certain limits of volume are not met] rather than Fixed Monthly charges [which ought to be returned if no trades done].

From traders' point of view I feel that the packages which offer the offset of charges for the trades done in future is likely to be more negative as certain awful targets are set in respect of meeting volumes of transactions. In certain cases the unused amount is forfeited if not used within a timeframe coupled with unmet volumes . This is cruel.

In the case of fixed monthly charges in form of brokerage which is returned if no trade has been done for the month seems quite viable for a trader who does high volume trading. I feel this kind of brokerage just as Prepaid Talktime where you know that how much talktime you need in future as per your requirement. If you don't consume that talktime for that period the amount will remain with you for carrying it forward for future use. Nothing so cruel about it. My personal views.