MCX Takes on Rivals with Sharply Lower Fee

Offers introductory fee of . 25 lakh against NSE's . 1.5 crore for equity and derivatives, puts net-worth requirement for brokers at . 30 lakh     MCX Stock Exchange (MCX-SX) kicked off its membership drive on Wednesday with an introductory offer of . 25 lakh for its equity and equity derivatives segments, marginally lower than BSE's and significantly below NSE's . 1.5 crore for both the segments.  However, the bourse said the introductory offer would be valid only till October 18, after which the charge would be doubled.  Most brokers termed the offer "fairly good" and said pricing was an important factor as people were putting money on a new exchange that was yet to stand the test of time.  "We would like to avail of the introductory offer, which I think is fairly good," said Nirmal Jain, chairman, India Infoline. "Most large brokers typically like to be members of all the exchanges and so I'd say pricing is important, especially when it's a new bourse that has yet to reckon with competition." Agreed Motilal Oswal, chairman, Motilal Oswal Financial Services. "I would say MCX-SX's offer is pretty attractive..... Over a period of time, I think most of us would like to see product differentiation with respect to new index or some such thing."  MCX fee for trading and selfclearing members on equity and equity F&O segments stands at . 20 lakh, and the admission fee is . 10 lakh. However, a . 5 lakh rebate is being given against transaction charges, making the total charge . 25 lakh.  Compared with this, a trading member pays . 1.5 crore for accessing both segments on NSE. The net-worth stipulation for an MCX-SX trading member is . 30 lakh against . 1 crore for NSE.  After the offer period, MCX-SX will charge members . 20 lakh each as deposit for equity and equity F&O memberships and . 10 lakh as admission fee, taking the charge to . 50 lakh. The deposit is refundable, usually three years after a member surrenders his/ her membership.  Sudip Bandyopadhyay, MD & CEO, Destimoney Securities, felt most large brokerages would take MCX-SX membership. He added that the fee structure of MCX-SX could not be "too out of line" with the market. "I will take membership of MCX-SX, but I think, over a period of time, the fees would be hiked," he said. KR Choksey, chairman, KR Choksey Securities, said the response to the offer could have been better if markets were more "buoyant". Choksey added that he would wait and see how the new exchange fared before taking membership of it.