Decoding Global Financial

Markets

Stock Exchanges
 1 Overview of financial markets

2 Participants in financial markets

3 Financial Institutions

Sections 4

5
Stock exchanges

Investment alternatives

6
FX & Commodity

7 Factors affecting financial markets

8 Nuances of financial markets
4 Stock exchanges

A. Background and overview

B. Benchmarking of global exchanges

Table of contents

Sr.No. Area
A Background and overview
A.1 Understanding growth of stock exchanges across the globe
A.2 Landscape of Indian stock exchanges
A.3 Evolution of Indian stock exchanges
A.4 Infrastructural set up and participants
A.5 Understanding growth of stock exchanges of India
A.6 National stock exchange- Data and website
Understanding growth of stock exchanges across the globe
Number of Trades Value of Share Trading

• While the global market experienced a 11

decrease in value of equity trades, Asia-Pacific
experienced a 5.5 growth in the same.

• Derivatives: Traded volume of options were up

Data source: World Federation of Stock Exchanges, August 2019 Data source: World Federation of Stock Exchanges, August 2019
1 2 while futures had increased by 9.8 with NSE
All Derivatives being the largest contributor in the index
options trading of over 1.85 billion contracts.

• New IPO listings experienced a 3 5 .2 decrease

from 2 0 1 8 due to drop in all regions: Asia-Pacific
(-32.7 ), Americas (-22.3 ) and EMEA (-55.4 ).

Data source: World Federation of Stock Exchanges, August 2019

 Understanding growth of stock exchanges across the globe

Volume of exchange traded derivatives Share of total volumes

• Commodity options and futures experienced a

sharp increase of 6 and 1 4 .1 . Asia-Pacific was
the largest contributor with a 58.8 increase in
commodity options.

Data source: World Federation of Stock Exchanges, August 2019 Data source: World Federation of Stock Exchanges, August 2019
• While single stop options were down by 2.4 ,
Share of total volumes by asset class traded volume of single stock futures increased
by 2 1 .2 with the Americas seeing a 319.4
growth in number of contracts.

• The Americas represent 6 5 of the Interest Rate

futures market which saw a global decrease of

3 .6 due to the EMEA region.

Data source: World Federation of Stock Exchanges, August 2019

Understanding growth of stock exchanges across the globe

Overview 45.00 42.64 Market capitalisation of exchanges

40.00
35.00
• The first stock exchange can be dated back to Belgium,
Antwerp in 1 5 3 1 dealing with debt issuances from businesses 30.00

In $ Trillion
and the government. 25.00
20.00
• Rapid growth in the financial sector with 60+ stock 15.00 10.90
exchanges representing a market capitalization of $ 84.68 10.00 6.91
3.28
trillion amongst them. 5.00
2.59 2.52 2.43
0.77
-
U.S. China Japan U.K. Canada India Saudi Arabia Singapore
• Exchanges such as N YSE and NASDAQ in the United States,
OSE/TSE, S SE , L S E are leading w.r.t market capitalisation U.S. China Japan U.K. Canada India Saudi Arabia Singapore

…some interesting facts

Poorest 6141
~320 Month: 80 return
September

Increasein market cap Historically proven to be the 80% of all trades in the world’s If you invested $ 1000
from 2009-2021 poorest performing month of stock exchangesare automated in 1980, you would
the year have $ 61,410 today
Understanding growth of stock exchanges across the globe
Market performance ratios across jurisdictions (as on 2019) Historical trend of market performance metrics in India
Turnoverto Market cap to
300 120 101 Year Market cap GDP
Market capitalisation to GDP

250 100 2010 -6.83 10.09

2015 -5.13 -5.84
Singapore
200 80 2019 -13.19 1.27
United Kingdom United States
150 Japan 60
29
India Korea, Rep. 40
100 China
Germany
20
50
0
0
2004 2010 2015 2019
0 50 100 150 200 250
Turnover to Market capitalisation ratio Turnover to Market cap Market cap to GDP Linear (Turnover to Market cap)
Data source: World bank data, October 2019 Data source: World bank data, October2019

Turnover to market capitalisationratio

Market cap to GDP

Parameter** Low High

Low India China, Germany, UK
High Hong Kong, Singapore USA
**Japan and South Korea ranks are similarly ranked in both ratios

• India has both low levels turnover to market cap ratio and Market capitalisation to GDP ratio as compared to other jurisdictions.

• For the period 2 0 0 4 to 2 0 1 9 , there has been a drop in the turnover to market cap ratio for India from 101 in 2004 to 29 in 2019.

• For the same period, no linear trend was observed in the market cap to GDP ratio as it increased from 55 in 2004 to 97 in 2010, and declined to 76 thereafter in 2019
 Landscape of Indian stock exchanges

About India:

• SEBI is the primary regulator of the stock exchanges in India.

• It is established to promote the growth and development of the securities markets while protecting the rights of the investors.

Landscape of exchanges in India

Evolution of Indian stock exchanges

Index futures & options (2000) & ➢ Financial Crisis of 2 0 0 8

➢ ➢ FII driven ➢ After the NSEL scam
stock futures & options (2001) risk growth and IT and Mumbai Attacks in 2013, RBI declared
➢ NIFTY Index launched management principles introduced sector boom causes S E N S E X to drop clearing and
on NSE representing leads to by 6 4 to 8,000 points settlement services of
4 7 of free-float ➢ Initial margins based on worst SENSEX spot exchanges to be
market cap scenario loss, short option minimum touching authorized under the
margin, price scan range, exposure 21,000 points Payment and
limit and position limit introduced Settlement Systems
➢ Derivatives for derivatives trading. ➢ S E N S E X corrects to
trading to be 15,000 points (PSS) Act, 2 0 0 7
launched in ➢ Settlement after the Eurozone
phases guarantee fund for Debt Crisis
beginning with derivatives trading
stock index separated from
futures cash segment

1996 - 1998 1999- 2002 2003 - 2008 2008 – 2015

2019-21 2016-18
➢ Covid-19 Pandemic
➢ Additional ➢ Risk Management Guidelines made
➢ S E N S E X dropped by surveillance more robust
2 9 1 9 . 2 6 points margin
(8.9) in one week introduced ➢ Exposure margins collected upfront as ➢ Demonetization of Indian
due to the pandemic on highly initial margin currency notes and
volatile ➢ Exposure margin applicable on Donald Trump wins U.S.
stocks. underlying published daily. Elections negatively
➢ Delivery margins introduced for physical effect stock market
settlement of equity contracts

➢ (SEBI) and Monetary Authority of

Singapore approved the proposed
structure for the Special Purpose
Vehicle that will allow onshore trading
activity on SGX NIFTY to be traded
officially on the Singapore Stock
Exchange..
Infrastructural set up and participants

Indian equity F&O markets are governed by the regulators set out by SEBI which are enforced by the exchange, clearing corporation and clearing member

Regulator SEBI Apex regulatory body which regulates the stock exchanges in India

Exchange Clearing corporation (‘CC’)

Exchange ▪ Facilitator for

electronic trading in
▪ Responsible for clearing and settlement of securities
and providing counter-party risk guarantee through
the equity F&O an established risk containment system.
segment

Clearing member (‘CM’)

▪ Collects margins from trading members
▪ Responsible for clearing and settling
trades for it’s proprietary positions
and/or for positions of associated
trading members.

Trading member (‘TM’) Sub- broker

▪ Trades on behalf of ▪ Trades through proprietary ▪ Acts on behalf
Participants customers positions. account. of/as an agent of a
▪ Collects margins from ▪ Bears margin obligation on
trading member to
customers & clears &settles proprietary positions assist in trading of
trades through CM. securities

Customer (Retail and institutional)

▪ Retail investors trade on ▪ Institutional investors trade
their personal accounts on accounts managed for
group or institutions.
Understanding growth of the stock exchanges in India

1 0 0 .0 0 Trading value of different marketsegments Participant wise trading value in the F&O segment
9 0 .0 0
8 0 .0 0 35,00,00,000
7 0 .0 0 30,00,00,000
6 0 .0 0 25,00,00,000
5 0 .0 0 20,00,00,000
4 0 .0 0
15,00,00,000
3 0 .0 0
10,00,00,000
2 0 .0 0
5,00,00,000
1 0 .0 0
0 .0 0 -
2 0 1 3 -14 2 0 1 4 -15 2 0 1 5 -16 2 0 1 6 -17 2017-18 2 0 1 8 -19 2 0 1 9 -20 2013-14 2014-15 2015-16 2016-17 2017-18

Capital Market Equity F&O Wholesale Debt Market Currency F&O Interest Rate Futures Institutional investors Retail Propreitary

Number of trades as per instrument type Year wise participant growth age
9 ,0 0,00,00,00 0 2
8 ,0 0,00,00,00 0 1.8
7 ,0 0,00,00,00 0 1.6
6 ,0 0,00,00,00 0 1.4
5 ,0 0,00,00,00 0 1.2
1
4 ,0 0,00,00,00 0
0.8
3 ,0 0,00,00,00 0
0.6
2 ,0 0,00,00,00 0
0.4
1 ,0 0,00,00,00 0
0.2
- 0
2013-14 2014 -15 2015-16 2016-17 2017-18 2018-19 2019 -20 2020-21 2014-15 2015-16 2016-17 2017-18

Index Futures Stock Futures Index Options Stock Options Institutional investors Retail Propreitary
Navigating the NSE website

Data available at :

Resources > > Downloadmarket

reports/historical reports

Illustrative list of reports :

1. Security wise archives

2. Archives of daily/monthly
reports
3. Percentage share of ‘n’
securities
4. Monthly settlement statistics
4 Stock exchanges

A. Background and overview

B. Benchmarking of global exchanges

Table of contents

Sr.No. Area
B Benchmarking of global exchanges
B.0 Scope of session: Exchanges and benchmarking parameters (USA, UK,
Japan, Singapore)
B.1 Capital requirements
B.2 Risk management mechanisms
B.3 Transaction taxes
Scope of session: Exchanges and benchmarking parameters

Geography Exchanges covered

India National Stock Exchange
Japan Osaka securities exchange
Singapore Singapore Stock Exchange
UK London stock exchange
USA New York stock exchange

Evaluation benchmarks

General information Risk management framework Transaction taxes

Types of participants Settlement guarantee fund STT

Capital requirements Types of margins GST

Span parameters Stamp duty

Margin benefits

Note: The benchmarking has been done for the equity F&O segment
General information
Current practice followed in National Stock Exchange
General information

Trading hours

Pre-open session Regular trading session Closing Session

09:00 hrs to 09:08 hrs 09:15 hrs to 15:30 hrs 15.40 hrs and 16.00 hrs

Products traded
Equity cash Mutual funds Debt Derivatives Primary
► Corporate bonds ► Currency ► Stock IPO issuances
► Equity shares ► Equity
► Debentures ► Equity
► Indexes ► Debt
► Government securities ► Interest
► Commercial papers ► Commodities

Capital requirements
Clearing Member-
➢ Net worth of at least Rs. 300 Lakhs
➢ Deposit of Rs. 50 Lakhs to NSCCL which forms part of security deposit of the CM
Trading cum Clearing Member
➢ Net worth requirement of Rs. 300 Lakhs
➢ Collateral Security Deposit of Rs. 25 Lakhs with NSCCL, Rs. 25 Lakhs IFSD with NSCCL, Rs. 25 Lakhs with NSEIL.
Trading cum Self Clearing Member
➢ Net worth of Rs. 100 Lakhs,
➢ Collateral security deposit with NSCCL of Rs. 25 Lakhs, Rs. 25 Lakhs with IFSD with NSCCL and Rs. 25 Lakhs IFSD with NSEIL
Trading Member:
➢ Net worth of at least Rs. 100 Lakhs
➢ Interest Free Security Deposit of Rs. 25 Lakhs with NSEIL
Current practice followed in National Stock Exchange
General information

Capital requirements • India has the lowest net worth requirement which
stands within the range of INR 1 – 3 crore based on the
Geography Equity Derivatives category of clearing member
India Net worth*: INR 1 – INR 3 crore
• Singapore keep a fixed minimum base capital
Base capital: Base capital:
Singapore requirements of INR 27 crore, INR 360 crore and INR
• CM: SGD 5 0 lakh (INR 2 7 crore) • CM: SGD 5 0 lakh (INR 2 7 crore)
256 crore respectively, which is ~ 9 times, 120 times
Net worth: and 85 times of India respectively
• PCP: JPY 2 0 0 crore (INR 1 4 0 crore)
Japan • ACP: JPY 2,000 crore (INR 1 4 0 0 crore)
Base capital: • Japan has both minimum net worth and base capital
• Not less than JPY 3 0 crore (INR 2 0 crore) requirement which is higher than India at INR 140-
Minimum capital for broker/ dealers:
1400 crore and INR 20 crore respectively
Initial net capital requirement ishigher:
• USD 5 lakh (INR 3.7 crore); or
• USD 2 5 lakh (INR 1 8 crore);
• USD 1 0 lakh (INR 7.4 crore) is
• 12.5 of aggregate indebtedness (not • USA has an initial minimum capital requirement
USA clearing done for other broker/
adopted for ANC)
dealers.
• 5 of aggregate debit items (adopted for
defined as higher of either a fixed amount or variable
Any additional requirements prescribed amount ( of aggregated indebtedness (12.5 ) or
ANC)
by clearing house
aggregate debit items (5 ))
UK LCH Clearing member categories and respective net capital requirements:
• SwapClear Clearing Member: USD 5 crore (INR 3 6 9 crore)
• EquityClear Individual Clearing Member: £ 5 0 lakh- GBP 1 crore (INR 4 7 – 9 4 crore) • United Kingdom, define minimum net capital
• ForexClear Clearing Member: USD 5 crore (INR 3 6 9 crore) requirements for various market segments which
• Net capital requirements of clearing members operating across multiple of these
range between INR 47 – 369 crore
markets will be sum of individual market net capital requirements (min GBP 5 0 lakh)-
(INR 4 7 crore)
• Net capital requirements of clearing members operating across multiple of these
markets will be sum of individual market net capital requirements (min GBP 5 0 lakh)-
(INR 4 7 crore)
Risk management practices
Risk management framework of Indian exchanges

There are multiple provisions made available such as capital adequacy requirements, margins, deposits and settlement guarantee funds
and other protection measures. Some of the key provisions are discussed below:

1 Capital adequacy requirements of members:

• Capital adequacy norms are required to be maintained by every trading member/clearing member and are set for different
trading segments. These include parameters like base capital, minimum net worth, deposited securities etc.

2 Margin requirements:
• Transactions in securities are subject to margin requirements and every trading member / clearing member deposit or pay such
amount of margins, as may be prescribed by SEBI or the Exchange or Clearing Agency and in turn collect such margins from their
clients.

3 Settlement guarantee funds:

• These are maintained by the Clearing Corporation or the Exchange either separately or jointly, for different clearing segments to
meet shortfalls and loss or liability etc. According to SEBI circular CIR/MRD/DRMNP/25/2014, norms related to core settlement
guarantee fund, stress testing and default procedures were issued to enhance the robustness of the risk management system in
the clearing corporations.
Risk management framework of Indian exchanges

Settlement guarantee fund • In India, the contribution made by clearing members to the
Settlement Guarantee Fund (‘SGF’) is fixed at a maximum of 25 ,
Geography Fixed contribution Variable contribution as per the SEBI circular. Unlike other geographies considered, no
minimum contribution to the SGF is prescribed

India 2 5 of the minimum required corpus of the Core SGF

• USA defines contribution to clearing fund by each clearing

Equity: INR 2.7 crore - Based on clearing value for 1 2 months member at a fixed (INR 4 crore) and variable level with a
(equity) (equity)
Singapore Derivatives: INR 5.4 - 4.5 of CM’s 3 month average risk margin weighted average of total risk, open interest and volume
crore (derivatives)

Japan Basis aggregated expected loss for the top 2 – 5 CM • For Japan, the clearing fund size is defined as per the excess risk
in the system by computing the expected loss under stress test.
This is further defined as per different products segments by
Derivative: INR 3.69 Amount determined by giving weights to total
USA crore (derivative) risk (70 ), open interest (15 ) and volume aggregating the risk values of largest clearing members.
Equity: INR 7.38 lakh (15 )

UK INR 4.71-131 crore

Additional amount called in as per portfolio • All exchanges follow waterfall mechanism for default redressal
positions
Risk management framework of Indian exchanges

Settlement guarantee fund

120000 Geography INR equivalent amount (In Date
112420 crore)

India* INR 3,266 June 2 0 2 0

Singapore INR 3,375 June 2 0 2 0

100000 Japan INR 20,999 June 2 0 2 0

USA (NSCC) INR 1,12,420 June 2 0 2 0

Hong Kong INR 6 1 8 9 June 2 0 2 0

80000 Germany INR 59,820 September 2 0 2 0

UK INR 12,315 August 2 0 2 0

59820
60000

40000

20999
20000
12315
6189
3266 3375
0
India* Singapore Japan USA (NSCC) Hong Kong Germany UK

India* Singapore Japan USA (NSCC) Hong Kong Germany UK

Risk management framework of Indian exchanges

Type of margins applicable in equity F&O segment in NSE

Types of margin Purpose

(i) SPAN risk charge: Risk based margin, applicable at customer level to cover for risk of default
on contractual obligation.
SPAN margin
(ii) Short option minimum charge (‘SOMC’): Assess the minimum margin applicable on all short
option positions
Exposure margin VaR based margin collected upfront from customers to cover for extreme pricemovement.
Premium margin Collected from option buyer to ensure settlement of option premium.
Assignment margin Levied on clearing member to ensure the pay in towards exercise settlement
Intra day crystallised losses Levied at customer to ensure pay in of mark-to market settlement in futures
Delivery margin Levied on customer near expiry to ensure delivery of contracts held till expiry
Additional margin Levied to ensure additional margin collection for highly volatile stocks

Levied to penalize for higher concentration of short options in a particular expiry month of long
Concentration margin
dated options

Daily settlement Mark-to-market done at end-of the day to cover for intra-day price movement
Understanding SPAN margin

Objective of SPAN is to identify overall risk in a portfolio of futures and options contracts for each member. Because SPAN is used to determine performance bond
requirements (margin requirements), its overriding objective is to determine the largest loss that a portfolio might reasonably be expected to suffer from one day
to the next day.

SPAN Margin
Price Scan Range Risk Arrays
Risk The gain or loss
Scenarios Volatility Scan value over oneday
Range for the contract

1 Scanning risk Short

MAX charge Option Scanning
, Minimum scenarios
Calendar Spread Charge

2 Net Option Value (Mark tomarket value

of difference in long open positions and
short open positions)

SPAN Margin requirement* = 1 minus 2

Critical factors:
• Underlying market price
• Volatility (variability) of underlying
instrument
• Time to expiration
Risk management framework of Indian exchanges

Applicability of SPAN margin • Across global exchanges considered under review, SPAN margin

Geography Initial margin is collected as the initial margin. Intermittent periods of higher

Yes volatility are covered by applying event based margins

India

Singapore Yes

Japan Yes

USA Yes

UK Yes
Risk management framework of Indian exchanges

Instances of levy of event based margins around global events are observed such as during budget, general elections, Brexit etc

Type of
S.No. Event Year Exchange Impact on margining
change

➢ SEBI revised the exposure margins from 5 or 1.5 times the SD to 1 0 or 1.5 times SDfor
Temporary
2010 NSE exchange traded equity derivatives w.e.f Oct 22,2008. This change was reverted back
change
in July 7,2010
Lehman
1
crisis
Process ➢ Implementation of a daily intra-day margin process on derivatives markets w.e.f 10
2007 LCH
change April, 2007

Process ➢ The third intra-day margin call collection time changed to two hours earlier so that it is
2016 LCH
change collected while repo market is still open

2 Brexit

➢ Following the news on Brexit referendum, ASX Clear (Futures) has revised SPAN margin
Temporary
2016 ASX rates for the SPI 200 (AP) and the 10 Year Government Bond 6 Coupon (XT) futures
Change
contracts on June 24, 2016. This change was reverted back in July 15, 2016
Transaction taxes
 Transaction taxes
India applies both transaction taxes and profit taxes on participants trading in the secondary markets.
These are defined differently as per the following types: • India applies STT/ CTT on intra-day trades, F&Otrades
1) Product segment: All three product segments (equity, derivative and commodities) have different and commodities trades
taxation rates defined. The rates applicable in the derivatives and commodities segment are lower
as compared to those applicable in equity cash. Agricultural commodities are exempt from taxes. For 8 global jurisdictions under consideration:
2) Trade transaction: There are different cost and tax rates applicable for delivery and non-delivery
where rates applicable are higher for the former. • 1/8 global jurisdictions applies STT rate in cash equity
segment for delivery.
Applicability of rates in India and global jurisdictions
• No jurisdiction applies STT in F&O or CTT on
Applicabi ity in India Applicability in global (outof 8) commodities
l Equity cash Equity cash
S.No. Charge type • 4/8 global jurisdictions apply stamp duty charge in
Non- F&O Com Non- F&O Com
Delivery Delivery
delivery delivery equity cash segment for delivery trades. However
Trans action taxes certain geographies provide options to claim tax rebate,
1 STT Yes Yes Yes** NA 1 0 0 NA
exempt certain securities from this charge etc.
2 CTT NA NA NA Yes** NA 0 NA No
3 Stamp duty* Yes Yes Yes Yes 4 0 0 0
Exchange
4 Yes Yes Yes Yes 8 0 8 8
charge • Most global jurisdictions (5/8) are taxing capital gains.
6 GST Yes Yes Yes Yes 7 0 7 7
However, in these geographies STT is not applied.
Profit taxes
Capital
5 Yes Yes Yes Yes 5 5 5
gain**
NA: Not applicable, *Only buy side; **Only sell side
Transaction taxes

Overview: Transaction and profit taxes in India

In 2004, STT was introduced as a transaction tax to simplify the taxation regime and also to replace profit tax (Long-term capital gains tax (LTCG)) 2. Since then,
the rate of STT has been revised multiple times and is different for different products. Downward revision in rates is observed post the 2 00 8 period. Currently, the
rate of STT on cash deliverable and exercised options is highest amongst all products at 0.1 and 0.125 respectively.

A tax rebate was available under section 88E on STT for all Evolution of STT rates in India
transactions. However, this rebate was removed in 20 0
Additionally, post 2018, along with STT and short term capital gain 8. Cash Non cash
Equity futures
Options
Options Exercised
Date deliverable deliverabl notional
LTCG was also re-introduced (for > 1 lakh capital gain), there s (sell) premium (sell) options
(buy and sell) e (sell) amount(sell)

increasing the total cost oftransaction. ,

b 01-Oct-04 0.075 0.015 0.01 0.017 - 0.01
y
01-Jun-05 0.1 0.02 0.0133 0.017 - 0.013
“STT is expected to curb volatility while
simultaneously increasing tax revenue for the
01-Jun-06 0.125 0.025 0.017 0.017 - 0.017
government. However, literature on global
jurisdiction’s experience with STT highlights its 01-Jun-08 0.125 0.025 0.017 - 0.017 0.125
impact on liquidity and price discovery.
However, evidence for its impact on both short- 01-Jul-12 0.1 0.025 0.017 - 0.017 0.125
and long-term volatility remains
01-Jun-13 0.1 0.025 0.01 - 0.017 0.125
inconclusive.3”
01-Jun-16 0.1 0.025 0.01 - 0.05 0.125

Data source: NSE files

Transaction taxes

Securities transaction taxes • India is the only geography applying STT and CTT charge in the
Geography Equities F&O Commodities derivatives and commodities segment respectively
Agri- No CTT
Futures: 0.01
India 0.10 Non Agri- Sell side
Options: • India applies STT on both sides (sell/buy) in case of cash equity
- Futures: 0.01
0.05
- Options: 0.05 and only on sell side in case of derivatives. However, in South
Korea, STT is applicable on sell side for all product segments
Singapore - - -

Japan - - -

USA - - -

UK - - -
Transaction taxes

Stamp duty • India is the only geography that applies stamp duty across all
Geography Equities F&O Commodities product segments and in case of non-delivery trades

2. - Futures
India 0.015
3. - Options • No rebate/provisions/ exemption is available in India unlike other
benchmark geographies such as UK

Singapore - - -
• In comparison to India, geographies like UK have exempted
application of stamp duty in certain market segments like AIM
and high growth markets to reduce the cost of investing in the
Japan - - -
security, providing an incentive to a wider set of investors to back
high growth SMEs in the UK

USA - - -

UK 0.5 * 0.5 * 0.5 *

Transaction taxes

GST • India applies GST rate of 1 8 which is second highest amongst

Geography Rate Applicable on geographies under consideration.

India 18 Exchange + brokerage

• The GST tax rate applicable in secondary markets in India is same
as that applicable on other products in the economy. This is
unlike China where a lower GST rate is applicable in secondary
Singapore 7 Exchange+ brokerage markets

Japan 10 Exchange + brokerage

USA 4 Exchange + brokerage

VAT is not applicable on

UK 0-20 equity. Only select
commodities
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