Fin Committee smells a rat on issuing stockbroker license
The Parliamentary Finance Committee has asked the Securities Board of Nepal (Sebon) to provide details on issuing new license to stockbrokers and the stock exchange market.
The committee meeting held last week decided to ask the Sebon and the Ministry of Finance for necessary information. The committee in this regard wrote to the board on Monday to provide details about the license distribution process within the next five days.
Out of 46 applicants, the Sebon has provided a letter of intent to 43 firms. According to the Sebon, it is in process of issuing licenses to these firms provided they meet the set criteria of the regulator including the requirement of the infrastructure.
The Sebon has fallen into controversy since it began issuing new licenses eight months ago. On September 11, 2022, Sebon made the second amendment of the Securities Market Operation Regulations 2008, paving a way for entry of new brokerage companies. On April 13, it invited re-application for the license of stockbrokers, stock exchange and commodity exchange, which was suspended by the Supreme Court’s short-term interim order in October.
It was just on Monday that the regulator issued stock brokerage licenses to seven firms. These include Bhole Ganesh Securities, Capital Max Securities, Himalayan Brokerage Company, Sun Securities Pvt Ltd, Mio Securities Pvt Ltd, Sharepro Pvt Ltd and Property Wizard Limited.
The Sebon has been providing stock brokerage licenses under three categories. The firm to work as a stock dealer should have a paid-up capital of Rs 1.5 billion, while the one permitted for full-brokerage and limited functional areas need to have paid-up capital of Rs 600 million and Rs 200 million, respectively.
The parliamentary committee has asked Sebon also to provide details on the status of implementation of directions that the committee had previously issued for the regulator of the stock exchange market.