Stockbrokers are professional traders who buy and sell shares on behalf of the customers. In Nepal, stockbrokers are licensed by the Securities Board of Nepal(SEBON). More than 250 companies are trading their shares every day in NEPSE.
There are intermediaries between stock buyer and seller which are called stockbroker. Brokers are the mediator between buyer and seller. Playing the role of mediator between buyer and seller is the major function of a Stock Broker. Broker-less transactions are not allowed in Nepal.
The major functions of stock broker in Nepal highlighted by following points:
- Buying and selling shares as per the customer’s order.
- A Stock Broker can act as a market maker.
- The stock can not purchase the stock as their own company’s name or as a company’s director, chief, employee name.
A stockbroker is allowed to do cash transaction only with the bank and its not allowed to use client’s any document or cash for own purpose. According to the regulation of SEBON, the paid-up capital of the broker should be more than 2 crores.
There is more than 40 stockbroker and they are expanded over 21 cities of Nepal. Also, one side of the investor pressurized SEBON to issue the broker license to banks to expand the capital market of Nepal.
|S.N.||Broker Code||Broker Name|
|1||1||Kumari Securities Pvt. Limited|
|2||3||Arun Securities Pvt. Limited|
|3||4||Opal Securities Investment Pvt. Limited|
|4||5||Market Securities Exchange Company Pvt. Limited|
|5||6||Agrawal Securities Pvt. Limited|
|6||7||J.F. Securities Company Pvt. Limited|
|7||8||Ashutosh Brokerage & Securities Pvt. Limited|
|8||10||Pragyan Securities Pvt. Limited|
|9||11||Malla & Malla Stock Broking Company Pvt. Limited|
|10||13||Thrive Brokerage House Pvt. Limited|
|11||14||Nepal Stock House Pvt. Limited|
|12||16||Primo Securities Pvt. Limited|
|13||17||ABC Securities Pvt. Limited|
|14||18||Sagarmatha Securities Pvt. Limited|
|15||19||Nepal Investment & Securities Trading Pvt. Limited|
|16||20||Sipla Securities Pvt. Limited|
|17||21||Midas Stock Broking Company Pvt. Limited|
|18||22||Siprabi Securities Pvt. Limited|
|19||25||Sweta Securities Pvt. Limited|
|20||26||Asian Securities Pvt. Limited|
|21||28||Shree Krishna Securities Limited|
|22||29||Trishul Securities And Investment Limited|
|23||32||Premier Securites Company Limited|
|24||33||Dakshinkali Investment and Securities Pvt. Ltd.|
|25||34||Vision Securities Pvt. Ltd.|
|26||35||Kohinoor Investment and Securites Pvt. Ltd.|
|27||36||Secured Securities Ltd.|
|28||37||Swarnalaxmi Securities Pvt. Ltd.|
|29||38||Dipshikha Dhitopatra Karobar Co. Pvt. Ltd.|
|30||39||Sumeru Securities Pvt. Ltd.|
|31||40||Creative Securities Pvt. Ltd|
|32||41||Linch Stock Market Ltd.|
|33||42||Sani Securities Co. Ltd.|
|34||43||South Asian Bulls Pvt. Ltd.|
|35||44||Dynamic Money Managers Securities Pvt. Ltd.|
|36||45||Imperial Securities Co. Pvt. Ltd.|
|37||46||Kalika Securities Pvt. Ltd|
|38||47||Neev Securities Pvt. Ltd.|
|39||48||Trishakti Securities Public Limited|
|40||49||Online Securities Pvt. Ltd.|
|41||50||Crystal Kanchanjungha Securities Pvt. Ltd.|
|42||51||Oxford Securities Pvt. Ltd.|
|43||52||Sundhara Securities Ltd.|
|44||56||Sri Hari Securities Pvt. Ltd.|
|45||53||Investment Management Nepal Pvt. Ltd.|
|46||54||Sewa Securities Pvt. Ltd.|
|47||55||Bhrikuti Stock Broking Co. Pvt. Ltd.|
|48||57||Arya Tara Investment And Securities Pvt. Ltd.|
|49||58||Naasa Securities Co. Ltd.|
|50||59||Deevyaa Securities & Stock House Pvt. Ltd|
|51||D01||Nagarik Stock Dealer|
|52||26-RWS||Asian Securities Private Ltd.|
These are the Stock Broker of Nepal and a couple of them are new. Nowadays, almost all brokers are allowed investors to their transactions online. All broker has their own TMS. Because of the TMS system, new government policy, and minimum interest rate bank, the Nepalese share market is in a bullish trend. Currently, every day more than Rs 10 Arba share amount are traded in the NEPSE floor sheet.
Before 1 year ago the broker commission was really but recently SEBON issue regulation about deducting the broker commission.
The new broker commission is as follows for equity shares:
|1||Rs 50,000 or less||0.4%|
|2||Rs 50,001 to Rs 5,00,000||0.37%|
|3||Rs 5,00,001 to Rs 2,000,000||0.34%|
|4||Rs 2,000,001 to Rs 10,000,000||0.3%|
|5||Above Rs 10,000,001||0.27%|
There is different commission rate for mutual fund shares and Corporate bonds/Debentures
|1||Rs 5,00,000 or less||0.3% or Rs 25|
|2||Rs 5,00,001 to Rs 5,000,000||0.25%|
|3||Above Rs 5,000,000||0.20%|
The broker commission rate for all kinds of bonds issued by the Government of Nepal, Nepal Rastra Bank, and government agencies:
|1||Rs 5,00,000 or less||0.2% or Rs 25|
|2||Rs 5,00,001 to Rs 5,000,000||0.10%|
|3||Above Rs 5,000,000||0.05%|
In India bank can work as a stockbroker as well because the bank has huge investment so it is more trustworthy as compared to the individual brokerage firm. Nepal Rastra Bank already provides access to banks to provide brokerage services.
In Nepal also, the investor forum pressurized SEBON to issue the brokerage license to banks. Issuing broker license to banks has the following benefits:
- Banks have higher funds as compare to individual broker firms so it’s easy to get margin loans.
- Now, broker firms rarely provide the training to people, however, after providing licenses to banks they will give more training to expand their business.
- There are few Individual broker firms outside the valley. So, broker license to banks will expand the business of shares it increases the accessibility so that NEPSE will increase.
Recently, commercial banks are expanding their branches in a rural area as well so, providing brokerage license to commercial banks is also expand the financial literacy all over Nepal. All the individual brokerage firms have a disagreement with providing licenses to banks, but it will be a positive step from SEBON if it happens in near future.
Although trading shares do not have a long history in Nepal, trading amounts and indexes are increasing rapidly these days. Finally, broker firms are playing a significant positive role to develop the overall capital market of Nepal.