https://twitter.com/Nithin0dha/status/1577974870180507648
Please do go through this tweet. This is what i explained in my previous post that because of negative working capital in NRI segment FINVASIA closed that segment. ASBA might not effect broker because that would most probably be for cash segment but now monthly settlement after quarterly is going to add the pain.
He has clearly mentioned that there will be upward pressure on price. Now as of today I feel only zerodha has a moat in this industry because of their product and service. They can manage to raise price and still not loose many clients but between other brokers there is going to be price war. Zerodha has already increased their brokerage if margin is negative.
In a capitalist economy the interest of business is always held high but in our case lot of focus is going into client protection on the cost of business. The ease of business in this industry is reducing. What I fell is regulators don’t care about business and they will continue to take steps in best interest of customers. The interest of business and customer should go hand in hand which is not the case in this industry and as a result increases the uncertainty here. The brokerage industry is going from the phase what the telecom industry went from.
One last point the previous quarterly settlement was for clients who have not traded in last 30days but this new settlement is for everyone. Even the active client which is rubbing salt to the wound.
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