Brokerage Charge: Share Trading Can Be Expensive! The founder of Zerodha said on the new settlement process

Share Trading Charges May Go Up: The new account settlement process rule is going to be implemented from Friday, October 7, 2022, under which the stock brokers will have to transfer the unused funds to the customers’ bank accounts. In such a situation, Nitin Kamat, founder of Zerodha, believes that after the implementation of this new system, the brokerage charges may increase.

Nitin Kamat tweeted and wrote that on the first Friday of the month, all the brokerage houses will have to transfer the unutilized funds to the customer’s bank account under the new account settlement process. Kamat said that this amount can be equal to about Rs 25,000 crore. He said that if the Zerodha account balance becomes zero or if the money comes in the account on Saturday, then now you must have understood why this has happened.

According to Nitin Kamat, is it not an attempt to know whether the broker is using the capital of the clients. He said that such a regulation is being done in India for the first time. Brokers in many countries use unused funds for working capital. But these funds can be used only for customer’s trading or regulatory charges in Barat.

Nitin Kamat said that account settlement is good for the safety of the customer. But the brokerage industry will face a challenge to meet the working capital requirements on Monday with such huge amount being transferred in a day. This will affect the float income. He said that there are zero brokerage fees in the US as they use customer funds for working capital. But it is not allowed in India. According to Nitin Kamath, due to this, brokerage rates may increase in the coming years.

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