Sebi's Initiative for Enhanced Transparency in Trading Charges

The Securities and Exchange Board of India (SEBI) is working to increase transparency around trading charges for investors by unbundling fees charged by stock exchanges and clearing corporations (CCs). This move is significant for ensuring the independence of CCs from stock exchanges, although ownership changes have been shelved.

Current Developments

• Following a board meeting on June 18, 2025, SEBI announced no current plans for structural or ownership changes for CCs.
• A working group has been established to assess the separation of trading and clearing charges, and the independence and governance of CCs, which are wholly owned subsidiaries of stock exchanges.
• The initiative aims to clarify fees paid to exchanges and CCs.

Objectives of the Working Group

• Evaluate measures to ensure CCs' financial self-sufficiency to fund capex requirements and contribute to the Settlement Guarantee Fund (SGF).
• Currently, CCs depend on exchanges for capital investments and SGF contributions.
• SEBI mentioned unbundling addresses governance concerns, ensuring independent oversight, and distinct charges for clearing and trading.

Perspectives on Unbundling

• A SEBI official noted that unbundling is unlikely to increase costs for investors but will provide a clear breakdown of fees.
• It emphasized the need for transparency on fee components, which will foster accountability and competition among clearing service providers.

Clearing Corporations' Role and Global Context

• CCs perform crucial functions like trade confirmation and settlement.
• It stressed the importance of CCs’ alignment with parent exchanges.
• It cautioned that altering ownership could weaken the SGF, crucial for India's investor-friendly image.
• For instance, in FY24, the NSE contributed ₹1,883 crore to the SGF, with NSE Clearing and BSE's ICCL adding ₹1,103 crore and ₹92 crore, respectively.
• Globally, most CCs are owned by single exchanges; exceptions include multi-shareholder-owned CCs like Euroclear.

Experts believe the working group’s recommendations, expected soon, will pave the way for greater transparency and financial autonomy for India’s CCs.

Regulatory Push

• The SEBI working group will investigate the unbundling of charges.
• Discussions on making CCs self-sufficient for profit, SGF, and capex are ongoing.
• Sebi clarifies no intent to change the structure or ownership of CCs.
• Past proposals on separating CCs from stock exchanges had raised concerns.