Nepse to allow stock brokers operate outside the Valley

Nepal Stock Exchange (Nepse) is soon allowing the stock brokers to operate outside the Kathmandu Valley by permitting them to open their branch office there. "We have already initiated works to let the brokers operate outside the Valley," Tanka Paneru, chairman of Nepse, told myrepublica.com. To start with, Nepse is planning to allow the existing 23 stock brokers to operate in at least one city outside the Valley.
Once opened, it will enable the investors outside the Valley to buy and sell shares at the secondary market from the local level. It will also free the investors from the need to come to Kathmandu for transaction of shares, thereby supporting the expansion of the market. Nepse took the decision to this effect as per the on requests made by the Stock Brokers´ Association. It had recently formed a committee to finalize the procedures to recommend for the smooth execution of the plan. "We are close to finalizing the guidelines for selecting brokers and steer their operations outside the Valley," said Paneru, adding that the guidelines will be finalized within the next few days.
Stock brokers then can open branches outside the Valley by just acquiring approval of Securities Board of Nepal (SEBON). NEPSE hopes that its new plan, once implemented, will drastically raise the number of investors in the secondary market. Brokers too said the induction of new investors will render the volume of existing stock in the market nominal. Despite these advantages, Nepse had so far refrained from allowing brokers to go out of the Valley, citing technical reasons.
Nepse, meanwhile, has not yet taken any step to recommence induction of new stock brokers in the market even though the court allowed it to move ahead with the process. Nepse officials maintained that they have not yet received a copy of court´s verdict to start the process. Two years ago, Nepse had initiated the process to add 27 new stock brokers. But the process was halted in the wake of Constituent Assembly polls, investigation by Commission for Investigation of Abuse of Authority (CIAA) and filing of a case against the process at the court. "We will recommence the process as soon as we get the copy of court´s decision," said Paneru.
A total of 334 companies had lodged application at the Nepse, seeking permission to operate as stock brokers. Of them, NEPSE had approved the files of 316 companies. However, the disruption of the process to induct new stock brokers has left number of stock brokers low at 23 from 32 of the past, while the number of listed companies has soared to 165 from 60 over the last 19 years. This has created problems for some 1.5 million investors who have put their money on shares..