When will New Brokerage Companies Begin Services? BOD Meeting To Be Potentially Held Next To Officially Verify NEPSE Membership of Seven Companies

As the process of awarding new broker licenses has resumed after the temporary halt was lifted by the Finance Committee, everyone is curious to find out when the new brokers will begin offering their services.

We spoke to Information Officer of NEPSE Murahari Parajuli to understand the same. Talking to Sharesansar correspondent over the phone, information officer Parajuli stated that currently the membership of seven brokers in NEPSE is being reviewed. 

"If the membership is ascertained it will be for seven broker companies in the first phase. However, at this moment I cannot make any official statements on the verification of NEPSE membership for the seven companies."

According to Parajuli, a meeting of the Board of Directors (BOD), which will potentially be held any day of the coming week, will verify the membership of the applicant companies and all due processes will proceed henceforth. 

The Nepal Stock Exchange (NEPSE) is currently engaged in inspecting the infrastructure of new brokers in the market. These brokers are required to prepare their infrastructure in accordance with the provisions outlined in the Securities Transactions (Third Amendment) Regulations, 2079. Compliance with these regulations includes the appointment of IT manpower as stipulated. Once the infrastructure is prepared, NEPSE will provide an API to establish a connection for testing purposes. API is the acronym for Application Programming Interface, which is a software intermediary that allows communication between NEPSE's storage of data and the entity that wants the data.

It should be noted that the API provided for one trading member cannot be used by another member. Following a successful API test without any issues detected, the system will be granted permission to operate regularly. Prior to that, the necessary groundwork must be completed, including the corn business. The new brokers will use NEPSE's TMS (Trading Management System) to conduct their operations.

Moreover, after obtaining permission from NEPSE, brokers will be required to obtain membership from CDS and Clearing Limited (Central Depository System). Once this process is completed, brokers can commence their business activities.

Presently, brokers are actively involved in staff management, and infrastructure preparation, as they work towards becoming operational in the market.

As of now, the Securities Board of Nepal has approved licenses for 18 companies in two different phases after fulfulling infrastructural pre-requisites. In the first phase seven broker licenses under the limited brokerage services were approved. The seven new companies includes Bhole Ganesh Securities Limited, Capital Max Securities Limited, Himalayan Brokerage Company Limited, Sun Securities Private Limited, Miyo Securities Private Limited, Sharepro Securities Private Limited and Property Wizard Limited. 

In the second phase, 11 additional brokerage houses received licences after fulfulling infrastructural pre-requisite. 

Following the approval, Mega Stock Markets Limited can extend its services as a full operating securities broker. Additionally, Nabil Securities Limited, the lone applicant for a broker company with a dealer’s license, had its application approved. 

The remaining nine companies' licenses were approved granting them to work as limited securities broker which included Elite Stock House Limited, Infinity Securities Limited, Index Securities Limited, Shubkamana Securities Private Limited, Hatemalo Financial Services Private Limited, Money World Share Exchange Private Limited, Machhapuchhre Securities Limited, KBL Securities Limited and Kalash Stock Market Private Limited. 

(Reporting by Aashish Chaudhary)