Market regulator Securities & Exchange Board of India (Sebi) in its meet held on Thursday, 18 June 2009 cut the fee it charges from market intermediaries by half to boost confidence of brokers (for transactions in securities, debt and derivatives), foreign institutional investors, their sub-accounts, mutual funds, foreign venture capital funds and the custodians of securities (such as NSDL and CDSL) in the Indian equity market.
The market regulator at its first meeting since the election of the new government also reduced the brokerage charges of all sale and purchase transactions in securities, other than Debt Securities, by 50% from Rs 20 to Rs 10 for a Rs 1 crore turnover.
Similarly, brokers' fee for all sale and purchase transactions in debt securities have been reduced to Rs 2.5 from Rs 5 for per Rs 1 crore turnover. Sebi also announced cut in the three-year registration fee of foreign institutional investors (FIIs) to $5,000 from the existing $10,000.
Similarly, filing fee for offer document of mutual fund have been reduced to 0.0020% from 0.005% of the amount raised in the new fund offer, subjected to a minimum of Rs 1 lakh and a maximum of Rs 50 lakh.
Meanwhile, Sebi Chairman C B Bhave also approved the concept of anchor investor (AI). The new entity will be allowed to take part in the public offers to give the required boost to the primary market. The anchor investor, who cannot be a promoter of the issuer company, can be allocated as much as 30% of the portion reserved for qualified institutional buyers (usually 60%) in an issue, through a bidding process.
The minimum size of application for anchor investors would be Rs 10 crore; and their margin payable on application is 25% and the balance 75% within 2 days of the date of closure of the public issue. There would be a 30-day lock-in period on the investment, Sebi said in a press release after the board meeting.
Among other reform measures, the Sebi board also decided to do away with entry load for mutual fund schemes. It is up to mutual funds to determine the commission payable to the distributors, the board said, adding that the distributors must disclose commission for mutual fund schemes.
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