Sebon grants initial approval to 8 brokerage firms to open branches in 5 districts
February 5, 2019 05:00 AM NPT
All province capitals to have stock broker presence for share trading
KATHMANDU, Feb 5: The Securities Board of Nepal (Sebon) has provided a letter of intent to eight brokerage firms to open branch offices in various parts of the country.
The letter of intent gives these brokerage firms initial approval to open their branch offices in five districts of the country.
However, they will get the final approval to operate branch offices only after they set up their necessary infrastructure, according to Sebon officials.
Though as many as three dozen brokerage firms had sought permission to open nearly 200 brokerage firms, the Sebon decided to give the eight firms initial approval to set up infrastructure to provide brokerage services from branches in the districts where share trading service was absent.
The securities market regulator also took into consideration federal structure and economic viability of the districts.
With the Sebon approval, stock brokers will have branch offices in Mahendranagar of Kanchanpur, Birendranagar of Surkhet, Ghorahi or Tulsipur of Dang, Bhairahawa of Rupandehi, and Janakpur of Dhanusha.
"We have provided these brokerage firms the letter of intent based on four criteria we have set until the Securities Businessperson Regulation, 2064 BS, is amended which is currently in the process," said Niranjaya Ghimire, deputy spokesperson of Sebon. "There are many others who have applied for branch offices. Their applications will be considered based on the revised regulation."
The Sebon granted the initial approval to those who had applied before mid-July last year.
The Sebon, in its statement, said that all provincial capitals will have stock brokers now.
Once these eight brokerage firms' branch offices come into operation, the securities market will reach 18 districts across the country besides the Kathmandu Valley. So far, there are stock brokers providing services from 41 places of 13 districts besides the Kathmandu Valley.
Stock brokers had rushed to apply for expansion of their services outside the Valley when the Sebon and Nepal Rastra Bank started preparation to grant stock broker license to subsidiaries of commercial banks.
However, the stock brokers claimed that they were reaching out to open branches in districts with the beginning of automated online trading system by Nepal Stock Exchange.
“Earlier, it was difficult to provide brokerage service mainly due to the computerized trading system which could not provide multiple log-ins for placing and executing trading orders,” said Bharat Ranabhat, president of the Stock Brokers Association of Nepal (SBAN).
He said that more brokerage firms would be ready to expand to other parts if the Sebon showed leniency in its requirements, including office space and staff number.