October 13: With just five days remaining for the submission of application for new broker license, only one company has filed application so far seeking such license. According to the Securities Board of Nepal (SEBON), Himalayan Securities Limited has applied for a limited operating broker license.

Spokesperson of the board, Rupesh KC, informed that only one company has applied for a broker's license. The board had recently announced application for three types of broker licenses. According to KC, Himalayan Securities has presented a letter to the Nepal Stock Exchange (NEPSE) seeking its recommendation for the license. Stating that the application should be submitted to the board along with the recommendation of NEPSE within the specified period, KC said that Himalayan Securities should attest the recommendation letter of NEPSE by October 17.

As of Wednesday, 21 companies have sought recommendations for broker licenses from NEPSE. Murahari Parajuli, information officer of NEPSE, informed that only 11 companies asked for recommendations on Wednesday. According to him, by Tuesday, 10 companies, including Himalayan Securities, had requested recommendations from NEPSE.

Parajuli informed that among the companies that have sought recommendations from NEPSE are Machhapuchche Securities, NMB Securities, KBL Securities, Kalash Securities, Volenlej Securities, Capital Max Securities, Property Bigad, Share Pro Securities and Prabhu Stock. He added that the number of companies seeking recommendations is increasing as the application deadline is getting shorter. NEPSE’s Board of Directors held a meeting on Wednesday and decided to give recommendations for new broker licenses only to the eligible companies.

However, Parajuli informed that NEPSE has not yet issued recommendation letters to any company so far.

There is a mandatory provision to seek the recommendation of NEPSE before submitting an application to the board for a new broker license. Himalayan Securities, which applied for the license with the board without the recommendation of NEPSE, will be denied the license if it fails to present the recommendation letter to the board by October 17.

SEBON is planning to issue three types of broker licenses based on the capital structure of the company.

According to the KC, the minimum paid-up capital required for the new stock exchange company is Rs 3 billion. Likewise, the capital requirement for new broker license has been fixed between Rs 200 million to Rs 1.5 billion. Brokers will be issued three different types of licenses based on their capital.

As per the new provision, the first kind of brokers providing limited services of stock market transaction require a minimum capital of Rs 200 million to acquire license. Likewise, the brokers providing services like share transaction, depository participant, investment consultancy, investment management and margin business need to have a minimum paid up capital of Rs 600 million.

Similarly, the third type of license will be issued for stock dealers who must maintain a minimum capital of Rs 1.5 billion.

The board had called for applications for to operate a new stock exchange company and two commodity exchanges along with broker's license on the September 18. The deadline to submit application for broker license was 30 days while the deadline for stock exchanges and commodity exchanges was of 45 days.