NSE to give incentives on SLB transaction charges from March 1

Mumbai: To encourage market participation in securities lending and borrowing (SLB) scheme, top stock exchange NSE has decided to provide incentives on transaction charges, from March 1.

The move will lower the transaction charges for traders in SLB segment from 0.5 percentage points to 2 percentage points.

Currently, the National Securities Clearing Corporation (NSCCL), an arm of NSE levies 2.5 percent of the lending fee on a monthly basis as transaction charges in SLB segment. The charges are levied on each instance of fresh lend, borrow and rollover transactions, to both lending and borrowing participants.

"In order to encourage market participation in SLB Scheme, it has been decided to introduce incentive structure," NSE said in a circular today.

The incentives would come into effect from March 1 and would be applicable for a period of 1 year from date of implementation, the exchange added.

Under the structure, where the value of total lending fees is above Rs 1 crore, traders will get an incentive of 2 percent on transaction charge of 2.50 percent. Accordingly, the transaction charge would be 0.5 percent of the lending fee.

Similarly, incentive rate on transaction charges on lending fee above Rs 50 lakh - Rs 1 crore is 1.25 per cent.

Lending fee above Rs 10 lakh - Rs 50 lakh would get an incentive of 0.75 percent, while transaction charges on lending fee upto Rs 10 lakh will attract a incentive of 0.5 percent.

According to NSE the incentive will be applicable on all fresh lend and borrow transactions.

However, it would not be applicable for rollover transactions under SLB segment.