Kathmandu. The government has decided to issue new broker licenses by increasing the paid-up capital. The Council of Ministers meeting has opened the way to issue licenses to new brokers by amending the Securities Brokers, Securities Dealers and Market Makers Regulations 2064.
The amendment proposal to distribute three-level broker license from the Nepal Securities Board reached the Council of Ministers through the Ministry of Finance. Artha had sent a proposal to the Council of Ministers, revising the proposal made by the board on the paid-up capital. Now the paid-up capital of the securities brokerage service company with limited operations has reached 150 million. Similarly, fully functioning securities brokerage services have reached Rs 500 crores and securities traders have reached Rs 1 billion.
The paid-up capital of the broker company was divided into three levels: 20 million rupees, 60 million rupees and 1.5 billion rupees. The ceiling of the proposed paid-up capital has been adjusted.
According to the current system, a securities brokerage company could be established if there was a paid-up capital of 2 crores. Similarly, only a limited number of broker licenses were being distributed. But now it is possible to apply for a broker license in the stock exchange within the first month of every financial year.
The Stock Exchange will call for applications within 30 days in the case of the first financial year of implementation of the regulations. After that, within the first month of every financial year, interested companies or organizations can apply to the exchange for recommendations.
According to the new system, the license fees for securities brokers and securities dealers have also increased. The most expensive stock dealer's license is one crore rupees. The dealer application fee is two lakhs. Similarly, every year renewal fee for broker license has to be paid. The board will charge an annual renewal fee of five lakh rupees for the dealer license.
Similarly, the fee for the other two licenses which were divided has also been fixed by the board at 50 lakhs and 25 lakhs. Out of which, the fee for a fully functioning securities broker license is 50 lakh rupees, while the board has set a fee of 25 lakh per license for securities broker services.
The application fee for a fully functioning securities broker license is Rs 100,000 and that of general securities broker service is Rs 50,000. Similarly, fully functioning securities broker license holders will pay an annual fee of Rs 3 lakh for renewal. It is proposed to fix the annual fee of general securities broker service at one and a half lakh.
Anyone who qualifies under the new rules will be eligible to be reduced as a securities broker. Everyone who fulfills the prescribed criteria will get a license according to the level of Bokrer.