May 9: Rastriya Swatantra Party (RSP), the fourth largest party in parliament, stands against the new stock exchange platform. Although the other parties in the federal parliament did not oppose it, only RSP stood against this concept.

The party's lawmakers are arguing that when the new stock exchange comes into operation, the capital market of Nepal will be under the grip of certain groups. They have been arguing that the license distribution process should be stopped immediately, saying that there is a big corruption in granting license for a new stock exchange.

The Securities Board of Nepal (SEBON) has said that an evaluation committee has been formed under the coordination of Joint Secretary at the Ministry of Law, Phanindra Gautam and the necessary steps for the distribution of licenses for the new stock exchange have been taken. According to a member of the evaluation committee, the process has reached its final stage.

Himalayan Stock Exchange, National Stock Exchange and Annapurna Stock Exchange have applied for the license of a new stock exchange with the board. But the RSP MPs have been putting pressure on the government agencies to stop the process immediately saying that there is financial manipulation in the license distribution process of the new stock exchange.

Speaking at the zero hour of the House of Representatives meeting on April 28, RSP lawmaker Sobita Gautam said that the process of granting licenses to new stock exchanges should be stopped immediately. Referring to the fact that the government-owned Nepal Stock Exchange (NEPSE) is contributing about Rs 1 billion as dividend to the government every year, she accused that the NEPSE is being weakened intentionally to divert its business to the new stock exchange. She said that the preparations for giving license to the new stock exchange should be stopped immediately to avoid the capital market of Nepal coming under the control of certain groups.

In response to the question raised by New Business Age regarding why is the RSP opposed to the new stock exchange, Biraj Bhakta Shrestha, the deputy parliamentary party leader of the RSP and head of the currency and capital market department of the party, claimed that they are bringing a new exchange for the benefit of some limited people without conducting a scientific study of the need for a new stock exchange in Nepal.

“In addition to the clear intentions, there are also signs of corruption. Therefore, even if RSP is alone against such mala fide intentions, it will always stand in opposition and will continue to protest such move," he said. Apart from this, RSP is also serious about protecting investors' investments, he added.

Economist and former chairman of the Securities Board of Nepal Rewat Bahadur Karki says that when the new exchange comes into operation, NEPSE which is currently operating will be stronger rather than weaker.

“When the private sector banks came into operation, there was improvement in the performance of state-owned banks. Similarly, when a private sector telecom company starts operating, the government’s telecom company improves, when a new stock exchange comes into operation, NEPSE will improve rather than weaken,” he argued.

He says that NEPSE has not been able to bring new tools to the market due to lack of competition. He said that when a new stock exchange comes into operation, there will be healthy competition, new tools and new technologies will be introduced in the market, which will help in the development and expansion of the market. He believes that this will also benefit the investors.

Karki says, "The market is currently dominated by limited individuals. Since both NEPSE and the board are owned by the government, the board has not been able to regulate the secondary market properly. Therefore, when a new exchange comes into operation, the regulatory capacity of the board will also expand.”