Kathmandu. A total of 10 broker companies have not yet been able to meet the paid-up capital determined by the Securities Board of Nepal (SEBON).

After the approval of the Ministry of Finance, the Securities Board of Nepal (SEBON) had given 9 months time to the companies that did not have capital. That time is ending in mid-March. The broker’s capital will have to reach Rs 20 crore by mid-April.

With one month left for the deadline, 10 companies are yet to reach their capital. Arun Securities had a paid-up capital of Rs 50 million, Dibya Securities and Stock House Rs 10 crore, Creative Securities Rs 5.5 crore, Kalika Securities Rs 3 crore, Market Securities Rs 5 crore, Pragyan Securities Rs 14.05 crore, Sagarmatha Securities Rs 2 crore, Cipla Securities Rs 2 crore, Shree Hari Securities Rs 3.06 crore and Sweta Securities Rs 20.6 million.

Niranjay Ghimire, spokesperson of SEBON, said that the companies have committed to raise the capital by mid-April. Although 10 broker companies have said that they will raise capital, they have not submitted any plans in writing. The board says it’s all verbal.

Earlier, the Securities Board of Nepal (SEBON) had amended the Securities Dealer (Securities Brokers and Securities Dealers) Regulations-2064 BS and extended the provision of broker capital by nine months and sent it to the Ministry of Finance for approval.

The Ministry of Finance amended the regulations and sent it to the Securities Board of Nepal on July 15 asking the board to increase the capital as per the regulations approved by the ministry.

Earlier, there was a provision that broker should have reached Rs 20 crore in paid-up capital within Ashad end of 2082 BS. The deadline has been extended by 9 months after the broker failed to raise the capital within the stipulated time by the board. With one month left for the extension period, the capital of 10 companies has not been reached.

The Board has issued the Directive on Merger and Merger or Acquisition of Securities Entrepreneurs-2081 on March 29.

The board had made the fifth amendment to the Securities Dealers (Securities Brokers and Securities Dealers) Regulations, 2064 BS on September 12, 2022. According to Schedule 9 of the regulation, the paid up capital of a stock broker working in limited work should be Rs 200 million, a full-time broker should have a paid-up capital of Rs 600 million and a securities dealer should have a paid-up capital of Rs 1.50 billion.

According to Nepal Stock Exchange (NEPSE), there are currently 2 stock dealers (Nagarik Stock Dealer and Nabil Stock Dealer). Similarly, there are 2 full-fledged brokers. These include Himalayan Securities and NIMB Stock Market. The remaining 88 are limited brokers. The Securities Dealer (Securities Broker and Securities Dealer) Regulations, 2064 BS (Securities Broker and Securities Dealer) Regulations, 2064 BS (5th Amendment) Rule 7 (3) of the Fifth Amendment Act states that the Board may formulate and implement necessary directives regarding the acquisition or merger of another securities broker or dealer. This arrangement was made to provide the broker’s capital.