SEBI turnover charge
A flat Rs 10 per crore of trading turnover, charged by SEBI on both the buy and sell legs of a listed equity transaction, to fund market regulation.
In plain language
Every trade in listed securities carries small regulatory costs on top of brokerage. One of these is charged directly by the market regulator itself.
SEBI, the Securities and Exchange Board of India, levies a turnover charge to fund its role in regulating the stock exchanges. It is a small amount, but it applies to every single trade.
How it works
The rate is Rs 10 per crore of transaction turnover. It applies on both sides of a trade, once when buying and again when selling, not just once per round trip.
This charge sits alongside several other costs the workbook lists for trading listed equity: brokerage, Securities Transaction Tax, stamp duty, exchange transaction charges, and Depository Participant charges. The SEBI turnover charge is one of the smallest of these in percentage terms, but it is charged regardless of whether the trade is intraday or for delivery.
A worked example
Illustrative figures. Mr Chawla buys shares worth Rs 50,00,000 and later sells the same shares for Rs 60,00,000.
SEBI turnover charge on purchase = (50,00,000 / 1,00,00,000) x Rs 10 = Rs 5.00
SEBI turnover charge on sale = (60,00,000 / 1,00,00,000) x Rs 10 = Rs 6.00
Total SEBI turnover charge on the round trip = Rs 11.00
Eleven rupees is negligible next to brokerage or STT on a trade this size, but the workbook lists it as a distinct, separately named charge, not folded into any other cost line, because exam questions test the full cost stack, not just its largest items.
Why NISM asks about it
Chapter 11 (Taxation of Equity Products), section 11.2.1, "Charges & Taxes," lists the SEBI turnover charge as one of the components of the cost of trading listed equity shares, alongside brokerage, STT, stamp duty, exchange charges and DP charges. Expect a question asking which of these charges apply on both legs of a trade, or a full cost-stack computation.
Common exam traps
- The charge applies on both buying and selling, not just once per trade, a common oversight when computing the total cost of a round trip.
- Rs 10 per crore is a rate on turnover value, not a flat fee per trade. It scales with the size of the transaction.
- This charge is separate from exchange transaction charges and DP charges, which are levied by different bodies for different purposes, even though all of them sit in the same "cost of trading" list.