BSE Stocks Take a Hit (Image Source: iStockphoto)
On Monday, the shares of BSE cracked by over 11 per cent and at the time of filing, the BSE shares were trading at Rs 2,834.40.
This drastic decline followed a stern letter from the Securities and Exchange Board of India (Sebi) to the exchange regarding underpayment of regulatory fees. Sebi’s communication highlighted that BSE is obligated to remit regulatory fees for option contracts based on their notional value, rather than the premium value.
In a detailed directive, Sebi instructed BSE to recalibrate its regulatory fee structure, emphasizing that the computation of annual turnover for option contracts should be based on their notional value.
The Securities and Exchange Board of India (Sebi) disclosed that the regulatory fee remitted by the Bombay Stock Exchange (BSE) for the fiscal year 2006–07 pertained to only a quarter, rather than the entire financial year.
Furthermore, since the inception of derivative contracts, including those from the erstwhile United Stock Exchange (USE) that merged with BSE during FY 2014–15, BSE has been paying regulatory fees based on the “Annual Turnover,” calculated on the premium value for option contracts instead of their notional value.
BSE Share Price Target
In response to these revelations, financial analysts at Jefferies have revised their stance on BSE from a previous “buy” recommendation to a “hold” position. Additionally, they have adjusted the target price downward to Rs 2900 from the earlier Rs 3000. Jefferies predicts that the Sebi order could potentially impact the company’s earnings per share (EPS) by a significant margin of 15-18 per cent.
