Broking firms with non-trading income fared better during 2025-2026 regulatory shifts, while transaction-dependent brokers saw revenue drops due to lower trading volumes.

Broking firms with diversified revenue streams, generating two-thirds of income from non-trading activities, showed greater stability amid regulatory changes in 2025-2026, according to Crisil. A proposed rise in securities transaction tax (STT) on derivatives and SEBI’s restrictions on weekly expiry products caused a 25% drop in average daily turnover and a 6% year-on-year revenue decline in the first half of fiscal 2026. Traditional brokers relying on transaction fees saw a 15% revenue drop, while proprietary traders, especially high-frequency and arbitrageurs, faced up to a 25% decline due to reduced market opportunities. Though margin trading income helped cushion losses, total revenues remained below prior-year levels. Crisil stresses that long-term resilience requires shifting beyond transaction-based models, as proposed STT hikes could further reduce liquidity and trading volumes.