First Business News Portal in English from Nepal
KATHMANDU: The Securities Board of Nepal (SEBON) has issued a 30-day notice inviting applications for new broker licenses. Although almost two weeks have passed since SEBON asked for the application, there is still confusion as to whether the recommendation of the Securities Market or NEPSE is needed to get the license.
Since the Securities Act clearly states that the permission of the Securities Market (Exchange) is required for the membership of the securities market, financial experts have been saying that the approval of NEPSE is mandatory for the license.
In section 57 of the Securities Act 2064, sub-section 2 (c) under the title of ‘applying for a license to conduct securities business’, it is stated that ‘recommendation letter of the relevant securities market in the case of specified businessmen who are allowed to do business only by being a member of the securities market’.
According to financial experts, the recommendation of stock exchange is mandatory for broker license as per international practice.
However, according to a senior officer of SEBON, the leadership of SEBON now intends to amend the regulations and issue licenses without the recommendation of the stock market.
According to that official, SEBON is now preparing to issue a license without the recommendation of NEPSE by revising the provisions mentioned in Schedule-4 of Securities Traders Regulations, 2064. “There is a strong possibility that the subject will be amended before the 10th if the SEBON Board of Directors meets,” said the official.
“It is understood that the NEPSE leadership is angry with the board as SEBON has started the process of introducing a new stock exchange”, the official said, “Therefore, fearing that NEPSE will not recommend the broker license, it seems that the SEBON leadership is preparing to amend the regulations and issue the license without the recommendation of NEPSE.”
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