BSE Introduces Maker Taker Charges in the Equity Derivatives Segment
On December 29, 2009 the Bombay Stock Exchange (BSE) introduces a maker / taker transaction model in its equity derivatives segment. The targeted reduction in effective spreads and impact costs, along with the innovative fee structure, should potentially result in substantially lower transaction costs for all market participants.
This new pricing scheme is designed to improve depth and liquidity in the BSE equity derivatives segment. It will help shrink quoted spreads and thus reduce impact cost. The proposed structure is a transparent and equitable way to attract liquidity to the BSE platform.
When combined with mid-month expiration design, the BSE index and single stock futures and options markets now provide a whole new range of hedging, investment and trading opportunities to Exchange members and their retail and institutional clients.
Transaction charges applicable for Passive (Maker) orders inclusive of IPF and TGF charges
Stock Futures and Index futures – Pay 1 Rupees per lakh (lakh = 100,000)
Stock Options and Index options – Pay 15 Rupees per lakh (lakh = 100,000)
Transaction charges applicable for Active (Taker) orders inclusive of IPF and TGF charges
Stock Futures and Index futures – Charge 1.5 Rupees per lakh (lakh = 100,000)
Stock Options and Index options – Charge 20 Rupees per lakh (lakh = 100,000)
Note: IPF: Investor Protection Fund, TGF: Trade Guarantee Fund
The above transaction charges will be applicable uniformly across all valid orders executed in the Exchange’s Equity Derivatives segment. Executed orders will be identified as passive or active on the basis of their respective time stamps assigned by the BSE system. As per the Exchange trading system design, two orders cannot have the same time stamp.
Passive Orders: Passive orders are defined as the orders that already exist in the order book at the time of matching (order taking place).
Active Orders: Active orders are defined as the orders that are matched against the orders already existing in the order book at the time of matching (trade taking place).