June 6: The Securities Board of Nepal (SEBON) has decided to grant broker licenses to an additional 11 companies. According to the board's spokesperson, Mukti Shrestha, 11 more companies that have fulfilled the prerequisites as per the Securities Dealers (Stock Broker, Securities Dealer and Market Maker) Regulations, 2064 (2008) will be awarded broker licenses.
Among them, Nabil Securities Limited, with a paid-up capital of Rs. 1.5 billion, has been granted a dealer's license, while Mega Stock Market Limited, with a paid-up capital of Rs. 600 million, has been granted a license to operate as a full-service securities broker.
Limited securities broker licenses have been granted to several companies with a paid-up capital of Rs. 200 million.
The companies that have been granted broker licenses include Elite Stock House Limited, Infinity Securities Limited, Index Securities Limited, Shubhakamana Securities Pvt. Ltd., Hatemalo Financial Services Pvt. Ltd., Money World Share Exchange Pvt. Ltd., Machhapuchchhre Securities Limited, K.V.L. Securities Limited, and Kalash Stock Market Pvt. Ltd.
The board had received applications for broker licenses from a total of 46 companies. Among the applications, 41 companies had applied to operate as limited securities brokers, four companies as full-service securities brokers, and one company applied for a dealer license.
However, one company did not meet the qualification criteria, one company was scrapped, and one company withdrew its application. According to the SEBON, application of Eagle Stock Equity Private Limited, which applied to operate as a limited securities broker, failed to meet the criteria as it was not submitted in the prescribed format.
The application of NIC Asia Securities Company, which applied to operate as a limited securities broker, was scrapped. Additionally, Century Stock Broker Limited, which initially applied to operate as a full-service securities broker, has withdrawn its application.
Previously, the SEBON had granted the letters of intent to the 43 companies for brokerage licenses. In the first phase, the board had granted broker licenses to seven companies to work as a limited service brokers.
These seven companies are now preparing to start their services within the same fiscal year and become members of the Nepal Stock Exchange (NEPSE). These companies have already filed their applications for membership with Nepal Stock Exchange to start their services from this year.
Furthermore, an additional 11 companies that were granted broker licenses by the board will also need to acquire NEPSE membership to begin their operations. There are still 25 companies out of the 43 that have received letters of intent pending the issuance of broker licenses.
Among the 43 companies that have received letters of intent for brokerage licenses, one is a stock dealer, 39 are limited securities brokers, and three are full-service securities broker companies. Among the 18 companies that have obtained broker licenses so far, one is a stock dealer, one is a full-service securities broker, and 16 are limited securities broker companies.
Out of the 43 companies that have been granted the letters of intent for broker licenses, 12 are subsidiary companies of 'Class A' banks, and 31 are other institutions.
Companies entering the securities market with strong capital will increase market competition, transparency, service levels, and competition in terms of service and pricing, providing confidence to investors, according to the SEBON.