Zerodha can shut down zero brokerage service: Nitin Kamat said after SEBI’s new circular – this has ended the revenue stream.

Brokerage firm Zerodha may end ‘zero brokerage framework’. Along with this, the fees for trading in futures and options (F&O) can be increased. Zerodha’s co-founder and CEO Nitin Kamat has given these indications. This may be due to the new circular of market regulator Securities Exchange Board of India.

He wrote on social media platform It said that Market Infrastructure Institutions (MIIs) should impose the charges ‘as per the label’ from October 2, 2024. This circular will impact not only the brokers but also the customers doing trading and investing.

Revenue stream ended due to new circular

Nitin Kamat said that stock exchanges charge transaction fees based on the total turnover made by the broker. Whatever is left between the fees the broker takes from customers and the fees the exchange takes from the broker at the end of the month goes to the broker.

Such discounts are common in major markets around the world. These discounts average around 10% of our revenue and range between 10-50% for other brokers in the industry. With the new circular this revenue stream has ended.

Zero brokerage structure will have to be abandoned

Nitin Kamat said that we are one of the last brokers to offer free equity delivery trades. We were able to do this because the revenue generated from F&O trading allows us to offset the charges.

With the new circular, we will in all likelihood have to abandon the zero brokerage structure or increase brokerage for F&O trades. Brokers across the industry will also have to change their prices.