Sebon is serious to bolster capital market

Bhisma Raj Dhungana is the newly appointed chairman of the Securities Board of Nepal (Sebon), the regulator of the stock exchange market.

In this regard, ceotab.com caught Dhungana, who is also former chief executive director of the Nepal Rastra Bank, to talk about various vital issues related to the country’s capital market. Excepts:

Lack of effective coordination between the Nepal Stock Exchange (Nepse) and Sebon is said to be one of the prime reasons behind the poor performance of the capital market. What is your take on this?

This is true to some extent.  Realizing this, I am planning to strengthen the coordination and collaboration between the two entities.  Under my leadership, the Sebon will not only effectively regulate the local bourse but also work in close coordination with the Nepse to bolster it. I strongly hope it (Nepse) is ready to work in tandem with the Sebon abiding by the rules and regulations.   

From time to time, the country’s stock exchange seems to be reeling under volatility due to the manipulative tactics. How do you assess this?

Whenever the share market sees major fluctuations, the possibility of its manipulations does arise. Any onset of such manipulations will directly hit the confidence level of general investors. So, in order to prevent this, educating them about the fundamentals of stock trading is a must.  

There has been a prolonged delay on the part of the Sebon in issuing operating licenses to the commodity market operators. What is the major reason behind this?

Apart from the stock market, we are authorized to govern and regulate the commodity market as well. In this regard, the Sebon has formed a committee to set certain standards in the process of licensing the commodity market operators.   The very committee is now carefully scrutinizing the applications and other necessary documents submitted by six firms to get approval for starting commodity trading. It will take some time for the committee to complete such scrutiny and issue new licenses to them.

In its policies and programs for the fiscal year 2019-20, the Sebon has talked about allowing the private sector to open new stock exchange.  When will it take place?

Currently, intense debates vis-à-vis the need for an optional stock exchange are going on. Some stakeholders advocate for operating such an exchange to help strengthen the capital market, while others term is unnecessary. In this connection, we are consulting with government agencies as well as private players to give the issue a final shape.   

The Sebon has said that it will expand the stock trading services to cover all 77 districts of the country. What measures are being adopted in this regard?

So far, such services have been expanded in over 2,500 different locations across the country.  The Nepse is in a position to issue operating licenses to as many as 1,000 new brokerage firms to further expand the countrywide reach of the stock market.

It has also formed a separate team to study whether issuing licenses to brokering firms at the provincial level will be viable or not. The team will also assess the possible ways of making the existing firms outside the valley sustainable.     

What are your plans to boost up the country’s capital market?

Under my leadership, the securities market regulator will be focused on expediting the growth of the capital by implementing the policies and programs for fiscal year 2019/20.

They include increasing the lock-in period of promoter shares of listed companies, facilitating manufacturing companies with capital of above Rs one billion to participate in the capital market and introducing automated trading systems of the over-the-counter market, among others.

 Similarly, revising the fee of credit rating companies, enforcing the insider trading related regulation and bringing down the trading and settlement time from existing T+3 days (trading day plus three days) are other policies and programs.

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