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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to Securities Broking Operations

A trading member has a client who buys 1,000 shares at Rs 200 in the cash segment on a T+1 rolling settlement. The broker's brokerage is 0.20% of the turnover and is charged on the trade value only; ignore all other charges. What is the brokerage payable by the client?

The brokerage is Rs 400. The turnover is 1,000 shares times Rs 200, which is Rs 2,00,000, and 0.20% of that amount equals Rs 400. Other figures arise from misplacing the decimal point in the percentage rate.

  1. ARs 400Correct
  2. BRs 40
  3. CRs 4,000
  4. DRs 2,000

Explanation

Turnover = 1,000 x 200 = Rs 2,00,000. Brokerage at 0.20% = 2,00,000 x 0.002 = Rs 400. Rs 40 results from using 0.02%, Rs 4,000 from using 2%, and Rs 2,000 from using 1%.

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