BSE share tanks 18% after SEBI’s regulatory fee order

Shares of capital market exchange BSE tanked as low as 18.6% during the morning trade after market regulator SEBI asked it to pay differential regulatory fees for the past periods, along with applicable interest.

Issuing a clarification, a BSE exchange filing said the company is currently evaluating the "validity" of the claim as per SEBI communication.

BSE clarified that in case it is ascertained the said amount is payable, the total differential SEBI regulatory fees for the past periods i.e. from FY 2006-07 to FY 2022-23, would be approx. ₹68.64 crore plus GST which includes interest of ₹30.34 crore.

The SEBI had introduced a "regulatory fee" on recognised stock exchanges wherein they would have to pay a regulatory fee within 30 days of the conclusion of the relevant financial year. The rate of regulatory fee was on the annual turnover of a stock exchange.

SEBI says in line with this, the annual turnover for options contracts is to be computed and always deemed to have been computed on the basis of the “notional value” of the options contracts for the purpose of payment of regulatory fees.

"The regulatory fee paid to the board for the FY 2006-07 was for a quarter rather than for the financial year," says SEBI, adding that since the introduction of derivative contracts, and since the introduction of derivative contracts, BSE has been paying regulatory fees on "annual turnover" to the board considering premium value for options contracts, instead of the notional value.

The due date for the payment of SEBI regulatory fee for FY 2023-24 is April 30, 2024, amount payable as per premium (turnover) is around ₹1.66 crore plus GST, which has been paid, says the company. “The differential SEBI regulatory fees for the year, if liable, could be around ₹ 96.30 crore plus GST,” says BSE.

Notably, SEBI's April 26 order directed BSE to pay the regulatory fee based on annual turnover, considering "national value" in the case of option contracts. The exchange was asked to pay the differential regulatory fee for the past periods along with applicable interest i.e. 15% per annum for every month of delay.

Shares of BSE Ltd opened a gap down at ₹2,728.45 and dipped to the intra-day low of ₹2,612.10 on the NSE, taking the company's m-cap down to ₹38,327.08 crore. The share is currently trading 12.36% down at ₹2,813.60 on the NSE.

Even though BSE share has seen a fall today, the scrip has given a multi-fold return in the past year, rising about 433.38% since May last year. The company share's year-to-date return stands at 27.69% while it has surged 48.34% in the past six months alone. In the past month, the share surged by 3.84%. In contrast, the benchmark BSE Sensex is trading 0.91% up at 74,403 while NSE Nifty is up 0.66% at 22,569.9.