Deadline to Meet Paid-Up Capital Requirement for Stock Brokers Extended Until End of Chaitra

Stockbroker companies now have until the end of Chaitra to meet their minimum paid-up capital obligations, as per a new proposal sent by the Securities Board of Nepal (SEBON) to the Ministry of Finance.

The Board has recommended amending the Securities Businesspersons Regulation, 2064, to extend the timeline without altering the existing capital thresholds. Under the current rule, brokers must maintain either Rs. 20 crore or Rs. 60 crore, based on their license type, while stock dealers are required to maintain Rs. 1.5 billion in paid-up capital.

The earlier deadline was set for the end of Ashad. With the proposed extension, firms that are yet to meet the requirement — nearly two dozen of them — will have more time. A directive introduced last Chaitra had allowed companies unable to meet the threshold to consider mergers or acquisitions. The extension aims to provide a full year from the issuance of that directive, rounding off the deadline to the end of Chaitra.

Currently, there are 90 broker companies and 2 stock dealers in the market. Of them, only two brokers hold full-fledged licenses, each required to maintain Rs. 60 crore in capital. The rest are limited-function brokers, obligated to maintain Rs. 20 crore. Among stock dealers, Citizen Stock Dealer and Nabil Stock Dealer are active, though a merger between the two seems unlikely.