Brokers Submit 13-Point Suggestion to New SEBON Chairman for Major Capital Market Reforms

The Stock Brokers’ Association of Nepal (SBAN) has officially submitted a comprehensive 13-point memorandum to the newly appointed Chairman of the Securities Board of Nepal (SEBON), Dr. Gopal Bhatt. During a recent congratulatory and courtesy meeting, an executive delegation from the association led by President Sagar Dhakal, Vice President Nitesh Kumar Agrawal, General Secretary Bhaktiram Ghimire, and Treasurer Madan Paudyal, briefed the new regulator chief on pressing challenges facing brokerage companies and the broader capital market.

The primary recommendation focuses on preventing structural disruptions within the trading ecosystem. SBAN highlighted that when the Central Investigation Bureau of Nepal Police freezes the primary bank accounts of broker companies during investigations, it severely disrupts daily stock trading, transaction settlement, and client payouts. Furthermore, the association requested a revision of the mandatory 25% advance payment rule for stock transactions, proposing that individual brokerages should have the flexibility to decide whether or not to collect advance deposits based on their own assessment.

SBAN requested integration between the systems used by securities companies and the national identification database managed by the Department of National ID and Vital Registration to standardize online customer onboarding. 

On the macroeconomic front, the brokers called for policy alignment to mobilize liquidity. They urged SEBON to work with the central bank to relax the current cap that restricts commercial banks and financial institutions from investing more than 40% of their core capital into share backed loans. Pointing to the high levels of excess cash currently sitting within the banking system, SBAN recommended creating a smoother environment for institutional players such as commercial banks, the Citizen Investment Trust, the Employees Provident Fund, and the Social Security Fund to directly invest in the secondary stock market.

In response to these concerns, Chairman Dr. Gopal Bhatt welcomed the feedback and expressed SEBON’s strong commitment to modernizing the capital market. He requested targeted recommendations from the association for upcoming amendments to the Securities Act and requested progress updates regarding margin trading and the setup of the clearing fund. Dr. Bhatt shared that the regulatory board is actively preparing to introduce new financial instruments, including short selling, and has already issued necessary instructions to the Nepal Stock Exchange (NEPSE) to accelerate the rollout. Moving forward, the Chairman committed to organizing joint high-level meetings featuring Nepal Rastra Bank, SEBON, NEPSE, CDS and Clearing Limited, and SBAN to collaboratively address and resolve structural issues holding back the capital market.