Transaction Fees When Investing In The NSE

There are certain charges that are required when investing in the Nigerian Stock Exchange. Some are paid to brokers and the others are required by law.

Regardless of where we’re from, the background we’ve had, our class in society, our cultural ideologies, and all the defining characteristics that typically set us apart, there are general similarities that we all have as humans.

One of such is that nobody likes paying fees. From levies, to taxes, to transaction fees, or even bank charges, we are, at best, unbothered because we understand the need to pay them – especially if it is for the sake of our comfort or peace of mind.

You can rest assured, though, that if you are ready to invest in the Nigerian Stock Exchange, transaction fees would be the least of your worries.

Transaction fees or charges represent a basic cost of investing and they are typically charged anytime your bid or offer goes through. All charges are a percentage of the purchase or sales consideration.

Some of these fees represent statutory fees that are paid to regulators while others are commissions or fees that you pay to your stockbroker when you want to buy or sell shares on the exchange. As you would expect, statutory fees are fixed (they are approved by the security and exchange commission) while broker fees depends on your stockbroker, usually within a specified range.

Usually, stockbrokers would charge a little below their own portion of the commission and fees to gain the upper hand over competition so as to get more investors. They can only reduce their own charges because those are flexible. The fees charged by SEC and NSE cannot be reduced.

Buy And Sell Charges On The NSE

Buy

The following are percentages of the purchase consideration that would be charged whenever you want to buy stocks on the NSE. They are the currently published “buy” transaction charges for equities traded on the NSE. They include:

- Securities and Exchange Commission Fee (0.3%)

- Stamp Duty (0.075%)

- CSCS Trade Alert (0.06%)

- VAT on Trade Alert (5% on CSCS) (0.003%)

- Brokerage Fee (1.35%)

Sell

The sell charges are also charged when you want to sell or dispose shares on the NSE. The currently published “sell” transaction charges for equities traded on the NSE include:

- NSE Fee (0.3%)

- Stamp Duty (0.075%)

- CSCS Trade Alert (0.06%)

- VAT on Trade Alert (5% on CSCS) (0.003%)

- CSCS Transaction Fee (0.3%)

- VAT on Transaction Fee (0.015%)

- Brokerage Fee (1.35)

If there’s anything you can pick from this, it is that it costs more to sell off shares than to buy. As such, buy more shares and only sell when it is the right time to do so.

Written by Lawretta Egba.