The country’s oldest stock exchange, the BSE, is looking to revive its wholesale debt trading platform with the waiver of annual charges and lower net worth requirements for those willing to trade on the bourse. The exchange has decided to waive off the annual subscription fee of Rs 25,000 for its wholesale debt market (WDM) trading members, the BSE said in a circular.
At the same time, the BSE has also lowered the net worth requirement drastically from Rs 1.5 crore to Rs 30 lakh only.
The transaction charges would be levied at a rate of 0.01 per cent of the traded value, or Rs 50 per trade, whichever is lower, and the cumulative annual charge for any member would be capped at Rs 1 lakh.
The WDM segment allows institutional investors such as banks, primary dealers and financial institutions in India to undertake transactions in debt instruments among themselves or with non-bank clients through the members of BSE.
BSE’s larger rival, the National Stock Exchange, has fixed the net worth requirement at Rs 2 crore for the WDM segment, while the annual subscription charges are Rs 1 lakh.
At the NSE, the average daily transaction value in the WDM segment is Rs 2489.49 crore for the current fiscal. In the last fiscal ended March 31, 2011, the exchange registered a net traded value of about Rs 6,00,000 crore.
While the figures were not available for the BSE, the exchange says that its WDM segment has shown “a gradual but consistent growth in turnover in the past few years with increased participation from the mainstream banking and institutional players.”
“This segment expects a sustained rise in turnover and participation in the coming years with the initiation of activity by new members and the continued support and participation of major banks, primary dealers and financial institutions,” the BSE said.
The BSE began trading in wholesale debt securities in June, 2001, although the government securities market is the largest and oldest component of the Indian debt market and has been in place at the BSE since the beginning of the 19th century.