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Shares of BSE Ltd. plunged as much as 19% on Monday, their biggest intraday decline on record, after India’s markets regulator requested it pay back-pay fees charged on derivatives contracts.

The Securities and Exchange Board of India has asked BSE, the country’s second biggest exchange operator after privately-held National Stock Exchange of India Ltd., to pay as much as $20 million in fees. The additional charges are being calculated on the notional turnover of derivative contracts instead of the value of the premium paid against such wagers, according an exchange filing.

BSE has been battling NSE to capture a share of India’s rapidly growing derivative market, offering lower fees and newer products. NSE, largely owned by institutional investors including state-run insurance firms, is the world’s largest derivative exchange by number of contracts traded, according to a derivatives trade body, but has conceded some market share in recent years.

“The options price hike was an optionality to BSE’s earnings but has now become a necessity,” HDFC Securities analyst Amit Chandra wrote in a note. Chandra said BSE may raise prices to offset the impact of the higher regulatory fees.

The latest communication from the market regulator means BSE will have to shell out 686.4 million rupees ($8.23 million) in legacy arrears while for the year ending March, the bourse will have to an additional liability of 963 million rupees, the BSE said in a statement. 

The one-time impact of legacy arrears and taxes leads to a potential drop of about 15% on the company’s estimated earnings for fiscal year 2024, according to Jefferies Financial Group analyst Jayant Kharote, who downgraded recommendation on the stock to hold from buy.

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