Earlier, Sebi had informed the apex court that it would require a huge sum of Rs 784 crore in the next few years for more efficient regulation of the markets and information dissemination.

On the basis of this ambitious expenditure plan, Sebi has proposed to impose registration fee on stock brokers on the basis of turnover they achieve.

This move was opposed by the brokers all over the country and they united under the banner of BBF and Sebi's decision was challenged in the SC in 1993.

BBF has also submitted that Sebi has received interest free loan of Rs 115 crore from the Centre. It further obtained financial assistance of Rs 4.86 crore from the Centre. Thus, in effect the interest free loan constitutes an outright grant of the interest earned by Sebi from loans. Its income has exceeded its expenditure every year since 1992-93 and as on March 31, 1999 Sebi's investments amounted to Rs 147.69 crore, it stated.

BBF has also contended that other regulatory bodies, like the Insurance Regulatory Authority of India (Irda) and the Forward Markets Commission (FMC), have vast difference in their fee structure compared to Sebi.

Irda charges a nominal license fee Rs 250 from the insurance agents who require to obtain or renew a licence. Besides this Irda is not charging any burdensome fee to the agents and more importantly the fee is not linked to the insurance agents' turnover, contended the BBF.

It also said that The East India Cotton Association (EICA), which has cotton traders as its members, is regulated by the FMC, which does not levy any fee on the cotton traders (brokers) either for the purpose of registration or for regulation. The EICA is not required to pay any fees to the FMC for supervising their activities as facilitator of forward trading in cotton.

Sebi, in its earlier submissions before the SC, has contended that even the Securities and Exchange Commission (SEC) of the US imposes transaction fee on the brokers as is the universal practice. To this, BBF has contended that transaction fee imposed by the SEC is a levy imposed by a Act of the US Congress, the legislative body competent to impose such a levy. In case of income-tax and service tax, brokers are required to pay these levies as it has been imposed by the Parliament. Sebi has, by linking the registration fee to turnover, assumed the mantle of a legislative body and has in reality levied a transaction tax in the guise of a registration fee. Sebi has done all this without commensurate authority or power, alleged the BBF.