New regulation more market-friendly, liberal, says SEBON chief

Kathmandu, November 4:

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 transaction.

“The new regulation is more market-friendly and liberal,” said Dr Chiranjibi Nepal, chief of Securities Board of Nepal (SEBON), the regulatory body, adding that SEBON has recommended the regulation to government for approval some eight months ago.

“It is the best regulaion in South Asia,” Nepal added.

“The small investors will benefit from the new regulation,” Rewat Bahadur Karki, general manager (GM) and CEO of 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.

“The Nepse will collect the amount and give to SEBON every month,” added Karki.

The government has approved four regulations; Securities Board Regulation-2064, Stock Exchange Regulation-2064 and Stock Brokers Regulation-2064, according to the

Securities Act 2063, (clause 116) — in the recommendation of SEBON — today.

Meanwhile, the brokers didnot want to comment about the reduction of commission.

“It will be beneficial for the investors and the volume of transaction will also increase,” said one broker without wanting to be quoted.

However, Nepse dropped by 10.99 points or 1.24 per cent due to the book closure of Nepal Investment Bank Ltd (NIBL) today. The index closed at 876.60 points at the closing today evening. NIBL has recently announced cash dividend, share dividend and rights shares after stock dividend. NIBL’s shares saw Rs 605 drop in the per unit share price.

The banking sub-index has also dropped by 21.29 points or 2.22 per cent to 939.80 points at the closing of today’s trading.

Nepse imposed circuit breaker (trading halt) on the Nepal Credit and Commerce Bank’s (NCCB) and Kist Merchant Banking and Finance’s (KMBF) transaction today.

Lately, SEBON and Nepse have been trying hard to modernise and develop capital market. The capital market that started some 14 years ago, has been literally on fire as its index has tried to cross 900-point mark within last three months.