It is time to reduce the broker commission: Investors demonstrate at SEBON and submit memorandum with a strong message

Nepalese investors have demonstrated at the premises of the Securities Board of Nepal (SEBON) demanding a reduction of broker commission. A memorandum is also submitted to the board with the signatures of heads of different investor associations.

Investors have said that the new generation entering the capital market of Nepal should be encouraged to enter this sector. One way of doing this, the memorandum states, is by reducing the broker commission to 0.25 percent. At present, the broker commission ranges from 0.4% to 0.6% of the total transaction amount.

In India, a full-service broker charges a brokerage between 0.03% – 0.60% of the transaction volume while trading in stocks. There are also stockbrokers in the US that do not charge a commission. They make money via other methods, like investing the idle fund in the clients' account, by fulfilling the demand of another broker with client orders of their own, capitalizing on the bid/ask spread, etc. 

Finally, if the demands are ignored by the regulatory body, the memorandum states that investors will lose their patience, and investors can't be held liable for any consequence thereafter.