Floor fee off trading at Bourse

The Colombo Stock Exchange (CSE) yesterday announced that its Board and the Securities and Exchange Commission (SEC) have approved the removal of the minimum brokerage fee of Rs.10.00 and the minimum CDS fee of Rs.5.00 levied on transactions.

The move is consequent to implementation of ATS Version 7, wherein the board lot size has been changed to one share.

Accordingly, the 0.64 per cent brokerage fee and the CDS fee of 0.02 per cent will be applicable for all transactions up to Rs.50 million, with effect from 10 April 2012.

CSE also announced that the fee of Rs.25.00 charged from custodian banks in respect of custodian trades, has been done away with effect from 19 March 2012. 

The move drew mixed reactions from brokers and analysts. Some welcomed it saying trading of securities could now reach even the very ordinary if they wish to whilst others warned of the negativities of the same feature with peoples of different expectations entering the Bourse.

Whilst the waiver of minimum fees appears to address a specific anomaly of the ATS Version 7, some warned it could lead to fresh problems of macro nature to the Bourse. “This is equal to a macro move to a micro issue,” one analyst opined. Despite the new measures, overall cost for brokers with the removal of the odd lots system remains at large.