Sebon approves entry of 16 new stockbrokers

KATHMANDU: The Securities Board of Nepal (Sebon) has approved licenses of 16 new firms vying for new brokerage permits.

The Sebon has already issued the letter of Intent (LoI) to these firms in the first stage of selecting new stockbrokers. As of now, 50 firms have been offering brokerage services to their clients, while a total of 46 new firms have applied at the Sebon to receive new licenses.

Mukti Nath Shrestha, spokesperson for the Sebon, said they have also started assessments of the remaining applications.

Nabil Securities, Mega Stock Market, CBIL Securities, KBL Securities, NMB Securities, RBB Securities and Sanima Securities have received the Sebon issued LoI under categories of financial institutions.

Likewise, the sector’s regulator has provided the LoI to Himalayan Brokerage Company, Index Securities, Sun Securities, Capital Max Securities, Bhole Ganesh Securities, Akash Bhairab Securities, Elite Stock House and SPSA Securities under the category of individual firms.

Of these, Nabil Securities has received preliminary approval to work as a stock dealer. Similarly, Mega Stock Market aims at functioning as a full brokerage company. The remaining ones have been permitted to carry out limited functions in the category.

Based on their functioning areas, the Sebon has categorized brokerage companies in three categories. The firm to work as a stock dealer should have a paid up capital of Rs 1.5 billion, while the one permitted for full-brokerage and limited functional areas need to have paid up capital of Rs 600 million and Rs 200 million, respectively.

In the past few years, there has been a massive rise in workloads of the existing brokerage firms due to a notable rise in the investors at the stock exchange market. Citing the situation, the regulator has been considering issuing the licenses to new stockbrokers.

On September 11, 2022, Sebon made the second amendment of the Securities Market Operation Regulations 2008, paving a way for entry of new brokerage companies. On April 13, it invited re-application for the license of stockbrokers, stock exchange and commodity exchange, which was suspended by the Supreme Court’s short-term interim order in October.