Zerodha, has announced that it will likely have to abandon its zero-brokerage model for equity delivery trades and may increase fees for futures and options (F&O) trading due to new regulations from the Securities and Exchange Board of India (SEBI).
SEBI has mandated uniform charges for market infrastructure institutions, including stock exchanges, that are not based on volumes. This means that brokers will no longer be able to get lower fees for generating high volumes, which was a key factor in its ability to offer zero brokerage for equity delivery.
Zerodha’s CEO, Nithin Kamath, has stated that the company will likely have to either increase brokerage fees for F&O trades or abandon its zero-brokerage model for equity delivery trades. This could significantly impact Zerodha’s business model, as it has been a major selling point for the company.
The new regulations are expected to have a significant impact on the entire brokerage industry in India. Other brokers may also have to increase their fees or change their business models. This could lead to higher costs for traders and investors.
Overall, the end of zero-brokerage model is a significant development in the Indian brokerage industry. It remains to be seen how Zerodha and other brokers will adapt to the new regulations.