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Beginning Thursday, the fees of the SKDD will be reduced. The new SKDD fees were approved by Hanfa a few weeks ago. Similarly, the Hanfa Director, Ante Samodol, announced the revision of the ZSE fees, starting with preliminary negotiations. The reduction of fees will be discussed at today’s meeting of the ZSE Supervisory Board. Judging by the opinions of the ZSE members, which are also Supervisory Board members, it is unlikely that the ZSE shareholders will welcome this idea. Samodol announced that, if necessary, Hanfa would apply legal measures in order to adjust these fees to market conditions.Investment companies should equally reduce their fees toward the end users/ investors. In case this does not happen in due time, Hanfa will withdraw their fee reduction decision, since it is pointless for brokers and investment companies to be sole benefactors.

Opposing interests
Hanfa explained that this initiative is an attempt to lower the cost of trading, in order to encourage more clients to trade during this time of recession. By adopting this decision, SKDD would have 20 million kunas in reduced profits (this also means lower expenses for brokers and issuers). It was easier for the SKDD to carry out their decision, since it required only the consent of the Ministry of Finance as their majority owner that waived their potential dividend. The ZSE shareholders have opposing interests: on the one side, it is in their interest to optimize their return on their investment, yet it should also be in their interest as members of the ZSE to lower trading costs, thereby increasing trading volume. ”Brokers have to choose their position on this matter,” commented Hanfa’s Deputy, Ivo Šulenta, suggesting that their decision should be made from the perspective of their predominant business. The ZSE Board President, Roberto Motušić, did not want to give any comments. On the other hand, the opinions of brokers are quite diverse. Some say that the ZSE and the SKDD cannot be compared, because of the structure of their income.

Losses
SKDD has a higher percentage of income coming from fees that are not dependant upon the amount of transactions. One renowned broker said that the transaction amounts are significantly smaller than last year and therefore the ZSE had a negative result in Q1, which slightly increased toward mid year. If the fees are cut, the ZSE may close the year with a loss. He added that with the slim earnings and these increased financial and organizational demands, even the bigger brokerage companies are experiencing losses. Others will say that this is a “chicken or egg” dilemma. Maybe the transaction amounts increase with the reduction in transaction expenses, said Josip Galinec, Director and Co-owner of “To One”. The recession demands adjustments from all sides and so the ZSE should possibly also have an action plan for the recession.