KATHMANDU, Jan 26: The government has expedited the process of establishing the country’s second stock exchange market. Sources privy to the matter told Republica that the Ministry of Finance (MoF) has given the green light to the Securities Board of Nepal (SEBON) to provide a licence to the new entity.
An official at the Securities Board of Nepal (SEBON) confirmed that the sector’s regulator received a go ahead letter from its line ministry. Following a decision of the Cabinet meeting, the MoF sent a letter to the SEBON to take necessary action over the issue.
Amid controversies, the cabinet meeting held last month gave the go ahead to the SEBON, the sector’s regulator, to issue a license to the new stock exchange market.
“Now, the SEBON will take necessary decisions over the modality to install the new platform,” said the source. “The SEBON’s meeting to be held next week will decide on whether to award licenses to eligible firms from the applications that it had received previously or to call for fresh applications.”
The SEBON for the first time invited applications on September 18, 2022. However, it had to halt the process following the Supreme Court’s order.
SEBON grants broker license to 11 more companies
After the apex court scrapped the writ against the process to install the new entity, the SEBON invited applications in the first week of April 2023. Three aspiring firms including Himalaya Stock Exchange, National Stock Exchange and Annapurna Stock Exchange applied for the license with SEBON, seeking the regulator’s approval.
Former presidents of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Pashupati Murarka, Bhawani Rana, Shekhar Golchha, and the directors of the Himalayan Reinsurance Company are among the major investors in the Himalayan Stock Exchange.
Likewise, Siddharth Group and Agni Group, which include past Non-Resident Nepali Association presidents Upendra Mahato, Jiba Lamichhane, current president Dr. Badri KC, and Kul Acharya, are the largest investors in the National Stock Exchange.
Annapurna Media House’s Proprietor Captain Rameswor Thapa has a major stake in Annapurna Stock Exchange. Surendraraj Wagle, Anil Sapkota, Prakash Kumar Shrestha, Ganesh Kumar Shrestha, and Sekhar Subedi are other major investors in the company.
The process of opening a new stock exchange courted controversy after the government showed interest to issue licenses to the aspirant who had close connections to the ruling parties.
The process was halted again by the direct intervention of the then Prime Minister Pushpa Kamal Dahal in April-end 2023, after failing to fulfill his vested interest.
Due to the tug-of-war among the political parties, the government failed to appoint the chairperson of SEBON on time as the vital post remained vacant for about 11 months.
The process of appointing SEBON chair also courted controversy due to the differences among the then Prime Minister Dahal and his coalition partner KP Sharma Oli. Subsequently, after the formation of a new government, the new prime minister, Oli, was able to pick the SEBON chair of his choice - Santosh Narayan Shrestha.
Of late, the government stepped up efforts to open the new stock exchange after the parliamentary Finance Committee gave the green signal to the government on November 9, 2024, to take forward the process.
The proposed stock exchange will be a parallel institution to the existing Nepal Stock Exchange (NEPSE). NEPSE, which started its secondary market operation on January 13, 1994, has been working as a solo entity and frontline regulator in the segment.
