The Securities Board of Nepal (SEBON) has implemented the sixth amendment to its broker company regulation, extending the deadline for capital increment and authorizing IPO issuance by brokers with prior approval.
Sixth Amendment to Broker Regulation Comes into Effect
The Securities Board of Nepal (SEBON) has officially enforced the sixth amendment to the Broker Company Regulation, incorporating key provisions that include an extended deadline for capital increment and permission for Initial Public Offerings (IPOs) by broker companies.
Following approval from the Government of Nepal, the amended regulation is now in effect.
Extended Deadline for Capital Increment
Under the latest amendment, broker companies now have until the end of Chaitra 2082 B.S. to meet the capital requirements. The previous deadline had been set for the end of Asar 2082 B.S.
However, more than two dozen broker companies have yet to meet the minimum required paid-up capital.
Broker Classification Based on Capital
SEBON has categorized broker companies into three tiers based on their paid-up capital:
| Capital Amount | Permitted Activities |
|---|---|
| NPR 20 crore | Limited trading activities |
| NPR 60 crore | Eligible to engage in margin lending |
| NPR 1 arba 50 crore | Permitted to operate as stock dealers |
Merger Option for Undercapitalized Brokers
SEBON has introduced a special directive aimed at broker companies with less than NPR 20 crore in paid-up capital. The directive encourages mergers and acquisitions as a path toward compliance.
However, broker companies have expressed dissatisfaction over the delayed issuance of this directive, which was only published in Chaitra of the previous fiscal year.
IPO Issuance Now Allowed for Brokers
One of the key provisions in this amendment allows broker companies to issue IPOs, provided they obtain prior approval from SEBON.
Previous Amendment in 2079 B.S.
In the 2079 B.S. amendment, SEBON had set the deadline for capital increment until Asar 2082 B.S. The latest revision extends this timeline to the end of Chaitra 2082 B.S., providing additional time for broker companies to comply with capital requirements.
This article was originally published on https://bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
