Securities Board of Nepal (SEBON) Prepares to Reduce Stock Broker Commissions

The Securities Board of Nepal (SEBON) is preparing to reduce the commission of stockbrokers. The board is currently in discussions with stakeholders, including stockbrokers and stock investors, regarding this reduction.

Discussions have been held with stockbrokers and investors on how to adjust the fees charged for trading shares.

After the board made the decision to reduce stockbroker commissions, stockbroker companies have set a condition that they should be allowed to expand into other areas of business.

During the recent board discussion held last Friday, stockbrokers demanded that portfolio management should be opened up to stockbrokers as well. They proposed that a merchant banker with a capital of 100 million should be eligible to manage a portfolio, and similarly, a stockbroker with a minimum capital of 200 million should also have access to this facility, as stated by one of the brokers who participated in the discussion. They argued that if the commission were to be reduced, additional facilities such as margin trading and portfolio management should be introduced.

It's worth noting that bankers who have received permission to engage in limited trading are currently not allowed to participate in margin trading.

In the event of a reduction in broker commissions, there is a proposal to introduce other related business activities, which seems to be a natural progression.

During the discussion, stockbrokers also demanded amendments to the Securities Dealers Supervision Regulations, which were passed by the Board of Directors of NEPSE and subsequently sent to the Securities Board for approval. They sought changes to the system, particularly stating that the requirement for one-house families of stockbrokers to give prior notice to NEPSE when dealing in shares and the suspension of stockbrokers for 15 days were impractical. A positive attitude toward these proposed amendments was noted among the authorities.