No acche din for stock brokers

MUMBAI: The buoyant atmosphere in the equity markets has failed to bring ‘ache din’ for stock market brokers as intense competition, rising cost of operations and falling brokerage rates have led to many SMEs winding up their business operations. In the last one year, about 3,264 cash market brokers have shut shop according to data available with Sebi. This according to markets participants would have resulted in over 30,000 professionals losing their employment.

“Besides broking services, larger firms are able to provide a host of other services like research and advisory services to their clients, which requires additional investments in manpower and infrastructure. The small and mid sized firms are not able to meet those requirements,” said Ambareesh Baliga, a veteran market expert.

Others added that the rising competition in the industry has brought down the brokerage rates by over 50 per cent during the last two to three years with some broking houses even providing flat rates to investors irrespective of the volumes traded on the exchanges. For instance, in the retail broking side, the rates has come down to 0.1 per cent – 0.25 per cent.

“The SMEs that are getting squeezed in this competition. Moreover, the cost incurred in compliance and upgradation of infrastructure has gone up,” said Siddharth Shah, chairman, BSE Brokers Forum.