SEBON Announces Major Amendments to Brokerage Commissions and Regulations

The Securities Board of Nepal (SEBON) has unveiled a series of comprehensive amendments to the Securities Dealers (Securities Brokers and Securities Dealers) Regulations, 2064. The modifications, aimed at enhancing investor benefits, were revealed following a recent decision by SEBON to reduce broker and SEBON commissions, a move that is pending approval from the Ministry of Finance.

The key highlights of the amendments are as follows:

1. Revision of Schedule-14:

The original Clause 1 of Schedule-14 has been substituted with new commission rates for securities brokerage services.

The service fees to be charged by securities brokers for every purchase and sale transaction of shares will be as follows:

(a) On transactions up to Rs.50,000/-: 0.36 percent
(b) On transactions above Rs. 50,000/- up to Rs.5,00,000/-: 0.33 percent
(c) On transactions above Rs. 5,00,000/- up to Rs. 20,00,000/-: 0.31 percent
(d) On transactions above Rs. 20,00,000/- up to Rs.1,00,00,000/-: 0.27 percent
(e) On any transaction above Rs. 1,00,00,000/-: 0.24 percent

Securities brokers are now required to pay 0.54 percent of the total service fee received by them for transactions in Clauses 1, 2, 3, and 4 within one month after the end of each financial year as regulatory fees to SEBON. Also, the customers are now mandated to pay a regulatory fee of 0.014 percent of each purchase and sale transaction amount for shares. This marks a slight reduction from the previous rate of 0.015 percent.

These amendments aim to make investment in the Nepalese stock market more attractive by reducing the overall costs associated with securities transactions. If approved by the Ministry of Finance, the changes will bring about a substantial reduction in broker commissions, ultimately benefiting investors.

SEBON's decision to decrease commissions is in line with its commitment to enhancing transparency and promoting a more investor-friendly environment in Nepal's stock market. Investors and market participants eagerly await the implementation of these regulatory changes, which have the potential to stimulate greater participation and investment in the country's capital market.