Wednesday, December 26, 2018

Central bank allows banks to work as brokerage services

The central bank has allowed commercial banks to set up a subsidiary company to provide brokerage services for securities trading.
Issuing a circular today, the central bank said that a commercial bank can set up a subsidiary company with an ownership of a minimum of 51 per cent to provide brokerage service after acquiring license from the Securities Board of Nepal (Sebon).
So far, commercial banks or their subsidiaries were not allowed to work as stock broker though they have been repeatedly asking with the central bank for the permission.
Though providing broker license to bank subsidiary was one of the top agenda of Sebon's chairman Rewat Bahadur Karki, the plan could not be materialised due to the lack of legal apparatus.
However, the central bank's circular today has paved the way for banks to open subsidiary for working as brokerage. The central bank has, however, barred such subsidiary company from trading securities of its parent company.

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