KATHMANDU, July 15: The government has permitted brokerage companies to issue their initial public offerings (IPOs) in order to increase their capital bases.
By providing the Securities Board of Nepal (SEBON) the go ahead for implementation of the sixth amendment to the Securities Businessperson (Securities Broker and Securities Dealer) Regulations 2007, the Ministry of Finance (MoF) has paved the way for the sector’s regulator to work on the matter. Provided the SEBON approves the amended regulation, share brokers with paid-up capital of more than Rs 1 billion will be allowed to float their primary shares for the general people.
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Likewise, the ministry has extended the timeline for the brokerage companies an additional nine months to raise their capital bases. In the new provision, the brokerage companies with low capital bases will have to increase their paid-up capital to Rs 200 million by mid-April 2026.
According to the SEBON, of the 50 previously licensed broker companies, 28 have already met the revised capital requirement. However, 22 of them still fall short of the mandatory threshold of the capital base.
In addition, the MoF has also permitted all the stock broker companies to issue margin trading. Under this provision, a brokerage firm lends money to their client to purchase securities by opening margin accounts with them.
