Stock dealer’s license in a week: SEBON

Lalitpur, Dec. 24

The Securities Board of Nepal (SEBON) is all set to issue license to a new stock dealer.

“The board will issue the license to stock dealer company within a week,” chairman of the SEBON Bhisma Raj Dhungana said while welcoming the newly elected Working Committee members of the Nepalese Association of Financial Journalists (NAFIJ).

Nagarik Stock Dealer Company Limited promoted by Citizen Investment Trust (CIT) has been awaiting the license. The capital market regulator has given green signal to the license as the company has prepared all required infrastructure for the operation of the company.

Similarly, the stock brokers’ commission will also be slashed with the New Year 2021. The SEBON had conducted a study to determine the modality of the broker’s commission and now it is working to finalise the rate of the charges.

“However, it is not yet fixed if the commission rate would be brought down since all the market stakeholders are getting commission from the brokerage charges. We are mulling if the commission should be separately charged for each entities,” said Dhungana.

According to him, the regulator would take a wise decision so as not to disturb the market orientation and hurt the investors’ confidence at a time when the market is continuously going up.

The stock market has witnessed an unprecedented growth in recent months. It’s making new records despite untoward political happenings.

Currently, the secondary market transaction costs 0.6 per cent to 0.4 per cent commission. 0.6 per cent commission is charged for the shares transaction of up to Rs. 50,000 and 0.55 per cent for transaction of Rs. 50,000 to 500,000. Likewise, 0.5 per cent commission is levied for transaction of Rs. 500,000 to Rs. 2 million, 0.45 per cent for Rs. 2 million to Rs. 10 million transactions and 0.4 per cent for the business above Rs. 10 million.

“Stock market transaction has reached 25 per cent of the market capitalisation against 7-8 per cent until last year. It should reach up to 40 per cent,” said Dhungana. “The market is making new records every day,” he added.

He also said that license to commodity exchange will also be issued soon.

The capital market has also witnessed a massive growth in online shares transaction in recent months. Online transaction has increased to 220,000 from last year’s 22,000. The share market capitalisation to GDP ratio has reached 73 per cent this year from 43 per cent last year.

Dhungana said that programmes like bank integration, broker TMS reform, electronic reporting system and e-KYC are in the pipeline.

Likewise, spokesperson of the SEBON Niraj Giri said that since stock market is a risk market, media had an important role to inform and raise awareness. “Media must help the investors take informed decisions about their investment,” he said.

Published in The Rising Nepal daily on 25 December 2020.