Shares of BSE (Bombay Stock Exchange), which has been witnessing a stellar rally in the past year, rising over 400 per cent, saw a steep decline on Monday, in the wake of a Securities and Exchange Board of India (Sebi) directive on regulatory fees on options contracts.
The stock fell over 18 per cent in the morning trade, but recovered later. At 2 pm, it was trading at Rs 2,807, a nearly 12 per cent fall from the previous day.
The regulator asked BSE to pay a regulatory fee based on the 'notional value' of option contracts.
'Notional value' refers to the total value of the underlying asset in a contract or trade. It can represent the total value of a position, the amount of value a position controls, or an agreed-upon amount in a contract.
BSE has been calculating the annual turnover as per the premium value for the options contract.
Premium value refers to the market price at which the options contract is currently valued. The premium is influenced by market demand, with more investors buying options leading to a rise in the premium, and more investors selling options causing the premium to fall.
PTI reported that market experts expect an increase in the BSE's regulatory fee payments to Sebi due to the significant variance between the notional and premium values.
Responding to the Sebi directive, BSE, in a regulatory filing, noted that it is currently evaluating the validity of the claim as per Sebi communication.
"In case, if it is ascertained that the said amount is payable, then the total differential SEBI regulatory fees for the past periods i.e. from FY 2006-07 to FY 2022-23, would be approximately Rs 68.64 crore plus GST which includes interest of Rs 30.34 crore," the filing said.