NEPSE instructed to issue broker licenses to commercial banks

Kathmandu, Jan. 2

Securities Board of Nepal (SEBON) has directed the Nepal Stock Exchange (NEPSE) to issue licenses to the commercial banks to allow shares transaction through subsidiary companies.

The SEBON has directed the only stock exchange in the country to issue broker licenses to the commercial banks as per the recommendations of the High-Level Committee formed by the Finance Ministry for reforms on monetary and capital market.

The capital market regulator has also directed NEPSE to issue license to the broker companies in the economic hubs outside the Kathmandu Valley.

It has asked the latter to establish an Investors Protection Fund by April 13 and review the existing legal provisions on investors' interest protections.

Likewise, NEPSE is asked to adopt automated system to make the Over The Counter (OTC) market dynamic, and conduct study to issue licenses to Employees Provident Fund, Citizen Investment Trust, Social Security Fund and securities brokers to work as the market maker or dealer.

 Similarly, SEBON has directed the CDS and Clearing Limited to immediately establish Settlement Guarantee Fund to ensure transaction payment in the secondary market.

SEBON Spokesperson Niraj Giri said that the board was preparing a draft for the amendment of Securities Broker Bylaws to create legal provision for the acquisition and merger of the share brokerage companies, including the merchant banks.

It is also conducting a study to facilitate the companies with small paid-up capital base to issue shares through private placement and trade them in the OTC market.

Published in The Rising Nepal daily on 3 January 2019.