BSE's proposed fee hikes for the derivative segment need to be introduced with careful timing and after adequate market consultation, says its Managing Director & CEO Sundararaman Ramamurthy.

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Sharing the Exchange's plans to potentially increase charges in the derivatives segment in a recent conversation with CNBC-TV18, Ramamurthy said that this move would require proper timing and market consultation to ensure a smooth transition.

Currently, BSE charges a fee of Rs 500 per a crore rupees of premium turnover in the derivatives segment. However, Ramamurthy stressed that this fee structure was inherited and not of his own design.

Premium turnover in the derivative segment is the money that actually gets traded.

He pointed out that he had taken the helm at BSE just eight months prior, and this relatively short period did not allow for a comprehensive assessment of the fee structure.

"(But if you ask) Will I start charging some meaningful number for derivatives? Yes, at the appropriate time at the appropriate level, I will charge this. I need to ensure the timing is appropriate, and whatever I do will be after consulting the market participants," he clarified.

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One of the key factors influencing this decision is the surge in equity derivative volumes. Ramamurthy highlighted that the relaunch of Sensex Derivatives in May 2023 had exceeded expectations, showing remarkable growth in just 16 weeks. He expressed a desire to see the number of active traders consistently rise, indicating a buoyant market sentiment.

He said, “We started with around eight members being fully ready out of the total 28 members participating. In 16 weeks, as you rightly pointed out, the product has grown much far, exceeding our own expectations. In the last couple of weeks, if you look at it, we are doing around 100 lakh crore as notional turnover. Around 300 members have already been in. When we started, only two software providers were supporting us and today around 13 software providers are supporting at the front-end number.”

BSE's current market share in the equity cash segment hovers around 9 percent as of September this year. Ramamurthy, however, has set his sights on achieving a 10 percent market share in the equity cash market.

Importantly, he emphasised that any market share growth in BSE would not come at the expense of increased volatility in the exchange. He reassured market participants that BSE would prioritise stability and sustainable growth.

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(Edited by : C H Unnikrishnan)

First Published:Sept 21, 2023 12:58 PM IST