The expert committee appointed by SEBI on turnover-based fees of brokers had recommended that with respect to jobbing transactions identified and included in the turnover, concessional rate of fee of `one hundredth of one per cent' of the jobbing turnover calculated should be considered. Hence, SEBI has decided to offer this concession to only those brokers who create a market for the stock by offering two way quotes.

SEBI has also clarified that such concessional rate of fee based on jobbing transaction cannot be availed of in respect of proprietary, custodial or non custodial square off within the same settlement. Jobbing is undertaken by a broker who chooses to make marketin any scrip. The concession offered by the expert committee has been justified on the basis that the jobber manages his sale or purchase in a scrip in which he is making market by giving two way quotes. Interestingly, the jobber also ensures that he has a sale for every purchase and a purchase for every sale so that he does not have any obligation at the end of the day.

"The committee had recommended the concessional rate of fees as for the risk undertaken by the jobber," states the letter issued by SEBI on November 5 to all the stock exchanges.

"It is clarified that transactions undertaken by a broker on behalf of his client or on his own behalf (i.e., proprietary trading) where the broker is not giving the two-way quote or making market, cannot be treated as a jobbing transaction," the letter further elaborates. The exchanges have also been notified that all transactions by a broker on behalf of his client or custodian has to be taken into account in computation of turnover for the purpose ofcalculating turnover based fees payable and registration fees will continue to be computed at one hundredth of one per cent of the turnover.