NBA seeks resumption of process to issue stock broker license to banks
August 29, 2019 12:08 PM NPT
KATHMANDU, Aug 29: Nepal Bankers Association (NBA) has requested the Nepal Stock Exchange Ltd (Nepse) to provide stock broker license to those banks who have applied for the license following a due process.
The full-committee meeting of the NBA – the umbrella organization of chief executives of ‘A’ class commercial banks – held on Wednesday decided to request the Nepse to immediately resume to the process of issuing stock broker license to the applicant banks.
Previously, on August 22, Nepse had decided to put on hold the process of issuing recommendation to Securities Board of Nepal (Sebon) for providing license to subsidiaries of commercial banks until further notice, in line with the ‘spirit’ of the directive of Finance Committee of the Federal Parliament.
“The attention of the NBA has been drawn to the sudden decision of putting on hold the process to issue license to stock brokers at a time when banks have already completed internal preparation to provide such service after completing all process,” the NBA said.
“The meeting decides to request the Nepse to immediately provide license to banks that have already completed due process,” the NBA added.
Nepse, which is also considered the front-line regulator of listed companies, decided to withhold the process of recommending bank subsidiaries for a stock broker license after the parliamentary committee directed the stock exchange company to do so.
On July 12, the Finance Committee formed a five-member sub-committee led by Ram Kumari Jhakri to study the recent slump in the capital market as well as frequent volatility in the stock market.
Nepse has said that it will wait for the report and recommendations of the sub-committee before taking further action.
The decision to shelve the plan has made it uncertain whether and when the banks could enter the securities market as stockbrokers.
The process of issuing stockbroker license to bank subsidiaries had begun after the Sebon continued pressing the Nepse to rope in bank subsidiaries in the securities market as stockbrokers.
Releasing the Working Procedure on Recommending License of Stock Broker to Subsidiary of Commercial Bank on August 2, Nepse had sought applications from eligible subsidiaries of commercial banks to apply for a license within 15 days.