Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Securities Board of Nepal (Sebon) is set to grant a nine-month extension for stockbroker companies to meet their paid-up capital requirements, as the current deadline of mid-July (Ashad end) nears its end.
This decision, outlined in a proposed amendment to the Securities Business Regulation, would push the new deadline to mid-April (Chaitra end) 2026. The revised regulation has been sent to the Ministry of Finance for approval, offering relief to brokers struggling to comply.Sebon spokesperson Niranjay Ghimire explained that the extension stems from delays in the “Securities Broker Merger Directive,” which was only finalized in mid-April (Chaitra) this year.
“The late issuance of the merger guideline, a key tool for raising capital, has prompted us to propose this extension,” Ghimire said. The regulation mandates a paid-up capital of NPR 20 crore for brokers with limited operations and NPR 60 crore for those with full operations. While the 40 newer firms have met these targets, about two dozen of the 50 older brokers still fall short.Previously, the capital requirement was lower—NPR 2 crore for limited operations and NPR 20 crore for full operations—before the recent hike aimed at bolstering financial stability.
However, the tight timeline and delayed merger directive made compliance challenging. Sagar Dhakal, President of the Stock Broker Association of Nepal, noted, “Companies need general meetings to decide on mergers, a process that only started after the directive.
The original Ashad end deadline was impractical.” With the extension, Dhakal believes most firms will comply by issuing rights or bonus shares.The merger process, governed by the directive, requires completion within six months of an agreement. Yet, some new brokers with NPR 20 crore are struggling with operational costs, prompting calls for business expansion support.
Dhakal argued, “Capital hikes alone aren’t enough; the state must help broaden service scopes like advisory and portfolio management, currently dominated by merchant banks with just NPR 5 crore.” This extension could revitalize the sector, pending Ministry approval and effective implementation.
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