On Jul. 1, IND SEBI required MIIs to levy charges true to label.
IND SEBI issued a circular to require market infrastructure institutions (MIIs) to comply with additional principle regarding charges levied on their members.
Follows IND SEBI May 2024 issued circular on data sharing to third parties, #213525.
Background
SEBI observed a volume based slab-wise charge structure is followed by some MIIs.
These charges are levied in lieu of services offered by MIIs and are recovered from the end clients by members; members recover such charges from the end clients on daily basis, whereas MIIs receive aggregate charges from the members on monthly basis.
As a result, aggregated charges collected by members from end clients can be higher than end of month charges paid to MII - incorrect/misleading disclosure to end client.
Additional Principle
The MII charges which are to be recovered from the end client should be true to label.
The charge structure of the MII should be uniform and equal for all its members.
New charge structure should give due consideration to the existing per unit charges realized by MIIs so that the end clients are benefitted with charge reduction.
Actions by MIIs
Redesign the existing charge structure/processes to comply with the principles above.
Take necessary steps to put in place requisite infrastructure and systems for implementation of the circular, including amending relevant bye-laws/rules/regulations.
Inform their members and also disseminate the same on their website.
Communicate to IND SEBI the status of implementation of provisions of this circular.
