May 24: The Securities Board of Nepal (SEBON) has given license to seven new companies as brokers. In the first phase, SEBON gave letters of intent to 43 companies for broker license and decided to distribute licenses to seven companies.

Tej Prasad Devkota, information officer of the board, said that the meeting of the board of directors held on May 22 decided to distribute the broker license to seven companies that have received letters of intent. According to information officer Devkota, the board will take a decision soon about issuing license to other companies that have also letters of intent. Devkota clarified that the board decided to distribute the broker license after observing the infrastructure prepared for business operations by the companies that received the letter of intent.

All seven companies have got permission to operate limited broker service on the basis of paid-up capital. Chairman of the board, Ramesh Kumar Hamal, held a program on Tuesday and distributed certificates to those companies.

SEBON has set a paid-up capital of Rs 200 million for the first-level limited brokers, and Rs 600 million for the second-level broker with a full range of work as a DP along with buying and selling of shares, providing investment consulting services and investment management and margin trading services and Rs 1.5 billion for the third level stock dealer.

The application for the broker license was open from September 18 to October 17 last year.

Altogether 46 companies had submitted applications for the new broker licenses.

The board said that one of the companies did not met the criteria, one company was disqualified, and one company withdrew its application. The board said that Eagle Stock Equity Private Limited, which requested permission to do limited work, did not apply properly. Similarly, the board said that NIC Asia Securities Company, which applied for limited work, was rejected, and Century Stock Broker Limited withdrew its application.

On this basis, the board issued letter of intent to 43 companies. Among them, one filed application for a stock dealer company, 39 for limited stock broker services, and three for full-fledged stock broker services. The board has said that out of those 43 companies, 12 are subsidiaries of 'A' class banks and 31 belong to other organizations.

It is expected that the efforts of the board to allow companies with strong capital to enter the market will make the securities market more competitive and transparent, the level of securities market services will increase, and investors will benefit from competition in terms of services and prices. The companies that got new broker licenses informed New Business Age that they will start the service within the current fiscal year.

Krishna Giri, executive chairman of Sun Securities Pvt. Ltd. informed that the service will be started this year after acquiring a membership of Nepal Stock Exchange.