SC upholds SEBI registration fee on brokers

NEW DELHI, FEB. 1. In a major judgment affecting big stock brokers more, the Supreme Court today upheld the controversial registration fee charged from brokers by the Securities and Exchange Board of India (SEBI), which would substantially enhance the income of the regulatory body.

Dismissing a petition by the Bombay Stock Exchange Brokers Forum challenging the SEBI decision, a three-judge bench comprising Mr. Justice B. N. Kirpal, Mr. Justice N. Santosh Hegde and Mr. Justice Brijesh Kumar said SEBI had the necessary legislative competence to impose the said fee.

The court accepted the contention of the Additional Solicitor General, Mr. Kirit Raval, who appeared for SEBI, that a large number of activities were being carried out by SEBI and hence the fee charges were not merely for registration of a broker but also for performance of its regulatory functions.

The Forum's counsel, Mr. P. Chidambaram, had contended that SEBI had exceeded its powers by linking the fee to the turnover of a broker for five years post registration.

The SEBI has charged a fixed amount plus one hundredth of one per cent of the turnover of brokers for a five year period. It has already collected Rs. 49 crores as registration fee from brokers alone and another Rs. 79 crores from other intermediaries.

Mr. Justice Hegde, writing the judgment for the bench, rejected the contention of Mr. Chidambaram that the fee charged from brokers was in the nature of a tax and thus, beyond the legislative competence of SEBI.

- PTI

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Section  : Business
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