Kathmandu. Chairman of the Stock Brokers Association of Nepal (SEBON) Dr. Gopal Bhatta has been given a 13-point suggestion for capital market reform.

Today, the president of the association, Dr. In the meeting with Bhatta, he gave a 13-point suggestion. The association has said that it is hopeful and expectation that the overall capital market will be sustainably developed, investor confidence will be strengthened and important works that have been stalled so far due to various reasons will gain the required momentum.

The Association has given a 13-point suggestion to implement it immediately in view of the current situation of capital market. In which the Central Investigation Bureau (CIB) of Nepal Police has been sending letters to the banks to freeze the main bank account of the securities member broker company and to proceed with the investigation process. Clause 6 (2) of the “Bank Account Freeze and Release Bylaws-2081” states that the account held by a payment service provider and a securities trading institution for the purpose of settlement shall not be frozen. It has been suggested that efforts should be taken to make arrangements not to freeze the settlement and settlement accounts of securities member brokers by amending this statement.

Likewise, it has been suggested that the provision of taking 25 percent advance from the investors is not practical and the provision should be amended to allow broker companies to operate share trading through both options without taking advance amount at the discretion of the broker companies.

Likewise, the Securities Board of Nepal should coordinate with Nepal Bankers’ Association and facilitate the Stock Brokers Association of Nepal to provide PPE list to the broker companies in order to effectively comply with the legal provisions and directives related to anti-money laundering ।

According to the integrated directive issued by Nepal Rastra Bank, banks and financial institutions are not allowed to invest more than 40 percent of the primary capital against share collateral, and this should be facilitated through Nepal Rastra Bank. ।

Similarly, customers should be allowed to open more than 2 demat accounts as per the requirement and the investors themselves will be able to sell the shares through securities trading using his/her user ID and password. It is suggested that instructions should be issued immediately.

According to the Securities Dealers (Securities Brokers and Securities Dealers) Regulations issued by the Securities Board of Nepal (SEBON), broker member companies that have already maintained the prescribed paid-up capital have been deprived of operating these services as they have not yet received approval. Therefore, it is suggested that such broker member companies that have completed the necessary process should be given permission immediately to operate the services that they can provide in accordance with the law.

Likewise, a capital market task force should be formed in coordination with the Securities Board of Nepal, NEPSE, CDSC, Stock Brokers Association of Nepal, Merchant Bankers Association of Nepal and PEVCs for capital market reform. Likewise, the committee has suggested making legal provisions allowing foreign institutional investors to invest in the secondary market and facilitating the process by making arrangements for filling up KYC on the basis of alternative identity as it is difficult to complete the KYC process due to the lack of national identity card with Non-Resident Nepalese (NRNs).

Similarly, the committee has suggested that the government should issue development bonds, bonds, citizen savings and foreign employment bonds issued through the Nepal Rastra Bank in an unphysical form through the online facility ‘Mero Share’ brought by CDS and Clearing, and make arrangements for easy trading in the secondary market by listing them in the NEPSE.

It has also suggested that the process of filling up KYC through online means should be made more clear, uniform and practical and the national identity card issued by the Department of National Identity Card and Registration should be facilitated for coordination with the system used by the securities business persons.