KATHMANDU, April 9: Nepal is likely to get the second stock exchange platform any time soon, with the Supreme Court (SC) paving the way to open an alternative secondary market on Sunday.
A joint bench of the SC’s justices Anil Kumar Sinha and Sushma Lata Mathema permitted the authority concerned to issue the license for the second stock exchange market. After the Securities Board of Nepal (SEBON) called for applications, Advocate Dipak Bikram Mishra had filed a writ to scrap the decision to issue the license.
According to the SEBON Chairman Ramesh Kumar Hamal, the regulator will take necessary moves based on the decision of their board meeting to be held shortly.
Similarly, the apex court also permits providing licenses to the new brokerage companies and a commodity exchange. On October 22, the SC had issued an interim order asking the authorities concerned not to implement the distribution of these licenses.
As of now, the three-decade old Nepal Stock Exchange (Nepse) has been in operation in the country’s stock exchange market. It was established on the working capital of Rs 35 million by the joint investment of the government, Nepal Rastra Bank and the then Nepal Industrial Development Corporation. Now, the Nepse has raised its paid-up capital to Rs 1 billion.
The SEBON had started the process to issue licenses to new stock exchange companies, stockbrokers, commodity exchange, remote work stations of brokerage companies, specific investment fund managers and credit rating companies, among others. It has already received applications from 45 companies for stock brokerages.
The SEBON has maintained a mandatory paid-up capital of Rs 3 billion for the new stock exchange. The holding amount requirement has been raised to Rs 15 percent from 10 percent.
The SEBON through an amendment of the Securities Markets Regulations 2007 has revised the licensing provisions. In the new rule, a stockbroker company should have paid-up capital of Rs 200 million to operate their business.