KATHMANDU, March 28: Operating stock brokerage will have to increase their paid-up capital by 10 fold or they will have to go for a merger with other similar companies.
The Securities Board of Nepal (SEBON), by approving the Stockbroker Merger Directive recently, has enforced the new rule for the stockbrokers. As per the new provision, a brokerage company will have to increase their paid up capital to Rs 200 million from the existing Rs 20 million.
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Although the SEBON in August 2022 decided to increase the capital base of stockbrokers, the sector’s regulator officially enforced the policy recently to implement the provision. Although the newly licensed brokerage firms maintain the threshold of paid-up capital, the majority of the old stockbrokers fail to comply with the new rule.
Out of the 90 brokerage firms, the SEBON issued licenses to 50 such firms as of 2009. According to the SEBON, only 22 old brokerage firms comply with the new rule. The remaining 28 firms will have to either increase their capital base or unify with similar entities.