Sebon mulling to provide licenses to 35 new stockbrokers, five in each of seven provinces

KATHMANDU : The Securities Board of Nepal (Sebon) is considering issuing additional 35 licenses to brokerage companies, citing an excessive rise in transactions in the secondary market in recent days.

The regulator that has been dilly-dallying to provide brokerage licenses to the banks is now looking for adding new brokers in the country’s stock exchange market. Sebon Chairman Bhisma Raj Dhungana said they are planning to provide licenses to five new brokerage firms each in seven provinces. According to him, there is a massive rise in the number of investors in the locations outside the Valley.

There are now 50 brokerage firms working in the sector. They have been carrying out transactions worth over Rs 10 billion daily at present compared to transactions of around Rs 2 billion just a year ago.

The plan of the government to authorize banks to operate as stock brokers has been put on hold as the authorities concerned have failed to take firm decisions. Nepal Rastra Bank in its Monetary Policy 2018 announced to provide banks with brokerage licenses. But this could not be materialized till the date.

Since May 2017, the Sebon has allowed stockbrokers to operate remote workstations as their branch units to offer their services from outside the Valley. This has helped diversify the workload to some extent. But due to lack of adequate infrastructures with brokers, investors have been facing problems in carrying out smooth transactions from those areas.

Dhungana said they are yet to decide on the modality of the new licenses to stockbrokers. “It has not been decided yet whether the new brokerage licenses will be provided to merchant bankers or brokerage firms or commercial banks,” he said.