They have also said that the government should introduce attractive plan to lure companies of production, service and trade sectors to list their shares in the stock market.
Submitting a memorandum to the Ministry of Finance on Monday, Stock Brokers Association of Nepal (SBAN) called for the government to pave the way for Non-resident Nepalis (NRNs) and foreign institutional investors to trade securities in the Nepali bourse.
“Since the index of the companies from the current securities market does not reflect the real economy of the country, the government should immediately form a special taskforce to diversify the capital market,” Priya Raj Regmi, president of SBAN, told Republica.
The umbrella organization of the brokerage firms has also demanded that the government immediately form regulatory bodies of the companies of various sectors that do not have any regulator.
Companies related to Hydropower, Manufacturing, Hotels and Trading sectors do not have any regulatory body yet.
Similarly, the association has also asked the government to provide waiver in income tax if government employees want to invest 20 percent of their income.
SBAN has also urged the government to introduce foreign and domestic strategic partners for Nepal Stock Exchange (Nepse) and Central Depository System (CDS) and Clearing Ltd. It has also suggested that the government make provision to insure a minimum amount of dematerialized securities of the investors so that the public confidence toward the dematerialized securities transactions grows.
“Modernized trading system, including online trading system, demat settlement and clearing module and risk management module should be installed in Nepse as the number of investors and listed companies are increasing and NRNs and foreign instructional investors are likely to enter Nepali capital market soon,” the memorandum reads.
Stock brokers have also sought a broader business scope for them. Arguing that the current Securities Act only allows brokerage firms to only buy and sell securities which amounts to a 'clerical' work, they have asked the government to frame necessary rules for allowing them to expand their businesses.
Among others, the brokerage firms have asked the government to allow them to provide services like consultation, portfolio management, dealership of securities, and margin trading and margin lending, according to the memorandum.
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