The capital market regulator has directed Nepal Stock Exchange (Nepse) and CDS and Clearing (CDSC) to expedite the process of market reform as suggested by a committee formed by the finance minister Dr Yuba Raj Khatiwada.
The Securities Board of Nepal (Sebon) has today directed the Nepse to conduct a study on issuing broker license to commercial banks, according to the report of the team of experts led by central bank deputy governor Shiva Raj Shrestha. The team had suggested that banks should be allowed to establish subsidiary brokerage firms. "Nepse and CDS should carry out a study to implement the recommendation,” a press note issued by the board today reads.
The central bank has last Wednesday already paved the way for commercial banks to set up their subsidiaries to work as stockbrokers. Three commercial banks – Sanima Bank, NIC Asia Bank and Citizens Bank International – have also applied to work as stockbrokers. But they also have to get a recommendation from the Nepse to apply for the stockbroker license with the Sebon. The entry of commercial banks to work as subsidiaries in the stock market as brokerage firms is expected to boost competition in the market.
Asking the Nepse to come up with measures to discourage activities that affect the capital market and lead to fluctuations in the stock index, the board has also instructed Nepse to revise the system of imposing circuit breaker in the market in line with international practices, to work toward establishing investors protection fund, to set up automated online system in the over-the-counter (OTC) market, and issue license to Employees Provident Fund, Citizens Investment Trust, Social Security Fund and securities businesspersons to work as market makers or dealers.
The board has also directed the stock exchange to provide a recommendation letter to the board for issuance of stockbroker license in line with the Securities Businessperson (Stock Broker, Dealer & Market Maker) Regulation, 2064.
The Securities Board of Nepal (Sebon) has today directed the Nepse to conduct a study on issuing broker license to commercial banks, according to the report of the team of experts led by central bank deputy governor Shiva Raj Shrestha. The team had suggested that banks should be allowed to establish subsidiary brokerage firms. "Nepse and CDS should carry out a study to implement the recommendation,” a press note issued by the board today reads.
The central bank has last Wednesday already paved the way for commercial banks to set up their subsidiaries to work as stockbrokers. Three commercial banks – Sanima Bank, NIC Asia Bank and Citizens Bank International – have also applied to work as stockbrokers. But they also have to get a recommendation from the Nepse to apply for the stockbroker license with the Sebon. The entry of commercial banks to work as subsidiaries in the stock market as brokerage firms is expected to boost competition in the market.
Asking the Nepse to come up with measures to discourage activities that affect the capital market and lead to fluctuations in the stock index, the board has also instructed Nepse to revise the system of imposing circuit breaker in the market in line with international practices, to work toward establishing investors protection fund, to set up automated online system in the over-the-counter (OTC) market, and issue license to Employees Provident Fund, Citizens Investment Trust, Social Security Fund and securities businesspersons to work as market makers or dealers.
The board has also directed the stock exchange to provide a recommendation letter to the board for issuance of stockbroker license in line with the Securities Businessperson (Stock Broker, Dealer & Market Maker) Regulation, 2064.
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