SEBON to increase number of share brokers and stock dealers

Kathmandu, July 29: The Securities Board of Nepal (SEBON) has unveiled its Policy and Programmes on Securities and Commodities Market for Fiscal Year 2022/23, with plans of expanding the number of share brokers and stock dealers. 

"To expand the capital market across the country and make it financially strong, new brokers will be added. Likewise, to increase the liquidity and market depth in the secondary market, new stock dealer licenses will be distributed," Chairman of the SEBON, Ramesh Kumar Hamal said while unveiling the policy and programmes at a function organised in Lalitpur on Thursday. 

However, the board also announced a contradictory policy to promote merger and acquisition of the institutions, including the brokers and merchant bankers, registered at the SEBON. A directive would be formulated to facilitate the merger and acquisition. 

This year, the capital market regulator has also planned to formulate rules and bylaws on warehouse to operate commodity market, commodity brokers, market makers and clearing. The policy has also announced to call for applications for the commodity brokers and market makers, provide licenses to them and create an environment to operate them. 

Likewise, a risk-based supervision manual would be formulated and implemented for the monitoring and supervision of the securities brokers. 

The SEBON also expressed its commitment to facilitate the connectivity of investors' bank account to their demat account by transitioning the secondary market transaction to a fully automated one.

It included most of the programmes suggested to the Ministry of Finance to be addressed in the budget of the current fiscal 2022/23 in its annual policy and programmes. 

Legal provisions would be reformed to make it mandatory for the companies with a capital of Rs. 1 billion or more or conducting transaction of more than Rs. 5 billion, companies using natural resources or receiving grants, concessions and tax exemptions from the state to be listed in the stock market by the public issuance of securities. "Company Act, 2006 would be amended in coordination with the Company Registrar's Office to facilitate such a step," read the policy and programme. 

It stated that the wrong practices in the stock market would be discouraged with the adoption of RegTech based on artificial intelligence and trained world-class technical human resources. 

Issues like maintaining reservation in the initial public offering for the Nepali migrant workers, inviting investment from the non-resident Nepalis in the stock market, establishing a SMEs platform at the Nepal Stock Exchange to trade small and medium enterprises' shares, and connecting the commercial agricultural enterprises to the share market are included in the policy of this year. 

Similarly, an automated electronic auction system would be prepared and implemented to support book building system and to attract sustainable and established companies to the stock market. 

Large utility companies will also be listed at the share  market with the implementation of fair and transparent system while commercially successful and established business institutions would be attracted to the stock market to enhance the public ownership to them and create a balance in the market, said Hamal.