Three companies apply for the operation of second stock exchange

 Kathmandu, Apr. 23

Three companies have applied for the license to operate a new second stock exchange in the country.

 Himalayan Stock Exchange, National Stock Exchange of Nepal and Annapurna Stock Exchange Limited have applied for the new license within the new deadline of 10 days set by the Securities Board of Nepal (SEBON) on 14 April.

Likewise, four new companies – Nepal Multi Commodities Exchange, Himalayan Commodities and Derivative Exchange, Multi Derivative Exchange, and Multi Assets and Derivative Exchange – have applied for the license to run commodity trading platform, the SEBON informed in a statement on Sunday.

The SEBON had announced to issue license to a new stock exchange, commodity exchange and broker company on September 18, 2022 but had to halt the entire process as a case was filed at the Supreme Court on October 21 last year.

Earlier on September 21 last year, Justice Til Prasad Shrestha had issued an interim ruling to halt the process to open new companies in the capital market sector. Later on April 9 this year, a joint bench of Justices Anil Kumar Sinha and Sushma Lata Mathema had cancelled all the writs challenging the SEBON's move.

The capital market regulator had amended the Securities Market Operation Regulations-2008 and the Securities Dealers Regulations-2008, in order to initiate the process of issuing licenses.

Following the amendment, it had published a notice with a 30-day deadline to apply for the license of the stock and commodity exchanges and stock brokers. According to the SEBON, 46 companies – including existing one - had filed applications for stock broker's licenses, and one application was registered for stock exchange license.

As per the amended regulations, a fully operational stock broker company should have Rs. 600 million paid up capital while limited trading broker should have Rs. 200 million capital. Likewise, the stock exchange company is required to maintain paid -capital of Rs. 3 billion.

Currently, Nepal has one stock exchange and 50 stock brokers but has no commodity exchange. Likewise, it has one clearing company, three credit rating companies, 19 mutual funds, one stock dealer, and 234 listed companies.

According to the NEPSE, about 4.36 million Mero Share accounts, and 5.26 million demat accounts have been opened in the country. Meanwhile, 2.7 million people have participated in the initial public offerings of various companies in the current fiscal year 2022/23. 

Published in The Rising Nepal daily on 24 April 2023.