Kathmandu, January 12 Nepal Bankers’ Association (NBA) has again sought stock broker licence and has submitted a seven-point memorandum to the sub-panel of the Finance Committee of the Federal Parliament. A few months ago, the sub-panel was formed by the Finance Committee to study the capital market and the NBA today again submitted a memorandum asking it to grant banks sharebroker licence. The main argument from the NBA is that given the widespread presence of commercial banks all over the country, providing broker licences to banks would allow more people to participate in the capital market. The memorandum letter highlights factors such as financial reach, corporate governance, international practice, capacity of banks and their contribution to the economy to support their demand. “Banks and financial institutions (BFIs) have assured that they will not be involved in insider trading and pointed out that they have always maintained institutional good governance while expanding their business,” stated the memorandum. The NBA has claimed that it can provide accurate information to the customers or traders, citing that there are skilled employees working in the banks. Similarly, it has said that the banks will open a separate company to provide sharebroker services to clients. On July 30, the Nepal Stock Exchange (Nepse) had also collected some applications from commercial banks regarding the same but nothing concrete has come out of it yet. On August 16, the Finance Committee had directed the government not to provide sharebroker licence to commercial banks until a sub-panel conducts the necessary study. On August 27, NBA had formally urged the concerned authorities not to delay issuing broker licence to commercial banks. On July 15, Securities Board of Nepal (SEBON) had directed Nepse to provide sharebroker licence to the banks’ subsidiary companies as per the recommendation made by a team of experts formed by the Ministry of Finance last year. Subsequently, seven commercial banks — Sanima Bank, NIC Asia Bank, Prabhu Bank, Machhapu-chchhre Bank, Mega Bank, Citizens Bank International and Global IME Bank — had opened their subsidiary companies to establish broker firms. As per the direction of SEBON, before issuing the sharebroker licence, Nepse needs to determine the number of subsidiary companies of commercial banks, minimum capital of such firms, necessary human resources, physical infrastructure, and their number of branches across the country, among others.
NBA again submits memorandum seeking stock broker licence
Published: 04:08 pm Jan 13, 2020