Capital market comes of age

"Capital market has entered into a new era," said Dr Chiranjibi Nepal, chairman of Securities Board of Nepal (SEBON), the regulatory authority of the capital market in Nepal addressing a press meet here in the valley Wednesday.
"Capital market needs transparency and effective regulation to develop it as a vibrant economic driver," he said adding that technological advancement and modernisation can only help it develop.
SEBON has on Sunday brought the long-awaited three regulations — Securities Board Regulation-2064, Stock Exchange Licensing Regulation-2064 and Securities Businessperson Regulation-2064, according to the Securities Act 2063, (clause 116).
The Stock Exchange Licensing Regulation-2064 has provisions that Nepse can now invite applications for new brokers. In Nepal Stock Exchange's (Nepse) recommendation SEBON will give licence to the new brokers. However, the existing brokers also have to take new license to improve their competence and quality at par with the new brokers, according to the new regulation.
The small investors will benefit from this as there will be more brokers and they can cater to the needs of all the investors. To make the brokers more deciplined, professional and check fake investors, the regulation has also provisions that they must keep records of proper identification of their clients.
The regulation — has already come into effect from Monday — has also reduced brokers' commission to maximum one per cent to 0.7 per cent. Earlier brokers used to charge 1.5 per cent to one per cent.
Though, it is too soon to expect any one to come forward for new stock exchange, the new regulation has paved the way for new stock exchange also. It has however, laid emphasis on sound infrastructure and investors' reputation.
"The new regulation will help professionalise the market, market -makers and brokers," said Nepal adding that SEBON can now act like a real regulator as the Securities Board Regulation has given it right to investigate and punish the wrong-doers.
It will also get 0.015 per cent of every transaction; from both buying and selling. The Nepse will collect the amount and give to SEBON every month, states the regulation.
Parista N Poudyal, director of the Marketing Regulation Department at SEBON did the presentation on the regulations while chief of SEBON Nepal replied the questions raised by the media at the press meet. Nepal also informed that SEBON is bringing IPO Registration regulation and planning more investors awareness programme throughout the country.

Brokers' commission reduced

Stock brokers' commission has been reduced to one per cent to 0.7 per cent, according to the new regulation that is going to be implemented from Monday. Earlier brokers used to charge 1.5 per cent to one per cent commission depending on the amount of the transaction.
"The new regulations are more market-friendly and liberal for the investors," said Dr Chiranjibi Nepal, chairman of SEBON, the regulatory body, adding that SEBON has recommended the regulation eight months ago. "It is the best in whole South Asia," Nepal added.
"The small investors will benefit from the new regulation," Rewat Bahadur Karki, general manager and CEO of the Nepal Stock Exchange (Nepse) said adding that it will be implemented from Monday.
Similarly, SEBON will also get 0.015 per cent amount of every transaction; from both buying and selling.