Charges levied by Market Infrastructure Institutions – True to Label
Summary
The circular mandates Market Infrastructure Institutions to adopt a uniform, non-slab-based charge structure for services recovered from end clients. It requires these charges to be 'True to Label', ensuring the amount collected from members matches the amount received by the MII. The directive aims to enhance transparency and ensure a level playing field among market participants.
Text
Market Infrastructure Institutions (MIIs) being public utility institutions act as first level Regulator and are entrusted with the responsibility of providing equal, unrestricted, transparent and fair access to all market participants.
The MII charges which are to be recovered from the end client should be True to Label i.e. if certain MII charge is levied on the end client by members... it should be ensured by MIIs that the same amount is received by them.
The charge structure of the MII should be uniform and equal for all its members instead of slab-wise viz. dependent on volume/activity of members.
To begin with, the new charge structure designed by MIIs should give due consideration to the existing per unit charges realized by MIIs so that the end clients are benefitted with the reduction of charges.
Redesign the existing charge structure and associated processes to comply with the aforesaid principles.
Take necessary steps to put in place requisite infrastructure and systems for implementation of the circular, including necessary amendments to the relevant bye-laws, rules and regulations.
Bring the provisions of this circular to the notice of their members and also disseminate the same on their website.
Communicate to SEBI, the status of implementation of the provisions of this circular.
The circular would be effective from October 01, 2024. The circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 51 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 and Regulation 97 of Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018.
Source: SecMarx — Charges levied by Market Infrastructure Institutions – True to Label. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.