Sebon reduces brokerage commission

 The Securities Board of Nepal (Sebon) has reduced the brokerage commission, though nominal.

“The board has reduced the commission rate charged by brokers by 33 per cent,” according to a press note issued by the regulator of the securities market.

Until now, brokers have been charging 0.40 per cent to 0.60 per cent commission from investors while buying and selling shares but the investors have been asking the regulator to reduce the commission to 0.25 per cent as the secondary market has been witnessing stock trading of Rs 9 billion, lately.

“The Sebon has reduced brokerage commission by 33 per cent, from lowest 0.268 per cent to a maximum of 0.402 per cent,” the press note reads, adding that the decision will come into effect from Sunday. 

The brokers will charge 0.40 per cent up to the transaction amount of Rs 50,000, while 0.37 per cent up to the amount greater than Rs 50,000 but less than Rs 500,000, the press note reads, adding that stock trading amount higher than 500,000 and less than Rs 2,000,000 will be charged 0.34 per cent, and trading amount greater than Rs 2,000,000 but less than Rs 10,000,000 will be charged 0.30 per cent. “Finally, the amount higher than Rs 10,000,000 will be charged 0.27 per cent.”

This is the second time, the regulator has revised the brokerage commission downwards. Earlier, some four-and-a-half years ago, the Sebon had reduced the commission that has been charged till today. Luckily, some four-and-a-half years ago, when the brokerage commission was reduced, the ffinance minister was Bishnu Prasad Poudel, and currently also Poudel has been instrumental in reducing the commission.

The Sebon claimed that the commission rate of stock brokers has been reduced as the operation costs of the brokerage companies has come down due to an increasing use of online transactions. The Sebon – issuing the press note today – asserted that out of the total transactions in the secondary market, more than 85 per cent is being carried out via online trading platforms. Likewise, the regulator also attributed a notable rise in the daily transaction volume for revising the rate of brokers’ commissions.

Claiming that it has revised the rate of stock brokers’ commission in line with the government policy to boost the stock market through attracting as many investors in the secondary market as possible, the Sebon also reduced the commission to up to 0.1 per cent for government bonds and securities. Likewise, the maximum threshold has also been fixed at 0.15 per cent for the mutual fund scheme and other types of capital market instruments, though the commission of Sebon and Nepal Stock Exchange (Nepse) has not been reduced.