Now the subsidiary of the bank will get broker license, preparation of securities ward

    Kathmandu. Subsidiaries of commercial banks will get broker license. The Nepal Securities Board (NSB) has stated that it has prepared regulations regarding the issuance of broker license.

    The regulations are currently being drafted and the issue of issuing broker licenses to the bank’s subsidiaries will also be included.

    Chairman of the Board Bhishma Raj Dhungana said that homework is being done to add new broker companies from the private sector as well as subsidiaries of the bank.
    He said that a draft regulation is being prepared to add a broker company with certain conditions and minimum capital.

    A minimum capital of Rs 100 million and Rs 1 billion will be proposed for the broker company according to the scope of work.

    The jurisdiction of a broker is divided into two types. One is to buy and sell shares and only act as margin lending and the other two are to buy or sell securities in one’s own name, to act as a qualified institutional investor and also to act as a guarantor.

    Now, the paid-up capital will be only Rs 100 million for those doing limited work, while the board is preparing to set a minimum of Rs 1 billion for all those doing business. This is 5 times more than now.

    The minimum paid-up capital of those currently in operation is Rs 20 million for those who do limited work and Rs 200 million for those who do all work. There are only 50 brokerage companies operating in the country.

    These broker companies will also have to increase their capital according to the new arrangement. He said that new homework has been done at the state level as there is a need to increase the number of brokers. The new company will get licenses to operate head offices in seven states.

    The minimum infrastructure required for them will also be specified. Once the draft is ready, it will have to be approved by the Ministry of Finance. Applications for the license of a new broker company will be opened only after the regulations are approved by the Ministry.

    Chairman of the Securities Board Dhungana said that they are preparing to add a broker company as soon as possible.
    It is unknown at this time what he will do after leaving the post
    Investors have been raising this demand for years as the capital market continues to expand after broker licenses were issued to the bank’s subsidiaries.

    Investors have been criticizing the syndicate for imposing the syndicate on the brokerage service. The Nepal Bankers Association, an umbrella organization of commercial banks, has been saying that broker licenses should be given to subsidiaries.

    Parasmani Dhakal, CEO of Global IME Capital, says that licensing of subsidiaries of the bank will give access to the capital market in the villages through the bank’s branches.

    Although the subsidiary now serves as the DP, investors still receive demat account services from its parent bank branch.
    In other countries, banks have been providing brokerage services. If that happens in Nepal too, an awakening will be ready for capital market development.
    Former president of Nepal Stock Brokers Association Bharat Ranabhat says that the current broker company should be made strong and strong.

    We are saying that we are ready to open branches, expand services, develop infrastructure and increase capital. But we are not allowed to open branches where we are told, ‘he said.
    He said that they are ready to increase the capital if the board gives instructions.

    The main income of the broker companies is the commission received from the investors while buying and selling shares. The broker commission is 0.27 to 0.4 percent of the amount of shares bought and sold at a time.
    Both buyers and sellers have to pay this commission.
    Buying or selling shares worth Rs 50,000 or less at a time carries a maximum commission of 0.4 per cent, while transactions above Rs 10 million carry a minimum commission of 0.27 per cent.

    In 2050, 32 broker companies were allowed. 9 left. While 23 broker companies started providing services, 27 more were added in 2068 BS. The daily turnover has reached tens of millions. The number of investors has increased from one thousand to 1.5 million. The number of 50 brokers is limited to 50.

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