Framework for Utilization of Regulatory Fee Foregone by SEBI
Summary
SEBI mandates that stock exchanges create a separate fund using regulatory fees forgone on agricultural commodity derivatives to benefit farmers and Farmer Producer Organizations (FPOs). Exchanges must develop an annual action plan by April 10th to utilize these funds for reducing transaction costs and facilitating market participation. The circular outlines permissible activities such as subsidizing warehousing, transportation, and broker fees, while requiring fair distribution of benefits and dissemination of plans.
Text
Stock exchanges dealing with agricultural commodity derivatives shall create a separate fund earmarked for the benefit of farmers/FPOs in which the regulatory fee forgone by SEBI shall be deposited and utilized exclusively for their benefit.
The fund shall be used exclusively for the benefit of and for easy participation by Farmers and FPOs in the agri-commodity derivatives market.
It shall be the endeavour of the exchange to utilise the earmarked fund primarily for reducing cost of transaction and for facilitating ease of trading by farmers/FPOs.
Exchange shall draw an action plan for full utilisation of regulatory fee foregone by SEBI in any financial year... Such action plan shall be drawn up by the 10th of April... keeping in view the amount of fund available for the purpose.
Exchange shall disseminate the details of the action plan including the financial assistance proposed to be rendered to farmers/FPOs... on their website under intimation to SEBI.
The aforesaid earmarked fund shall not be clubbed with any other funds such as Investor Protection Fund (IPF) /Investor Services Fund (ISF) /Corporate Social Responsibility (CSR) Funds etc.
Exchange shall ensure that the farmers/FPOs participating on the exchange are treated in a fair and equitable manner... benefits... are imparted to all farmers/FPOs participating during the year and are not restricted to a select few.
Exchanges may consider one or more of the following activities: Funding of Warehousing/Assaying charges, Cost of bags and transportation, Cost of Mark to market funding, Broker fee subsidy, Delivery fee reduction, Repository related fee subsidy, or any other activity permitted by SEBI.
The exchanges shall allow utilization of the fund for the activities mentioned above with certain conditions such as overall amount per activity, maximum amount per farmer/FPO, maximum period etc., so as to ensure fair and equitable distribution of benefit.
Exchanges are advised to make necessary amendments to bye-laws/rules/regulations, bring provisions to notice of stock brokers, disseminate on website, and communicate implementation status to SEBI.
Source: SecMarx — Framework for Utilization of Regulatory Fee Foregone by SEBI. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.