How To Open Stock Broker Office In Nepal

Securities Businessperson (Stock Broker, Securities Dealer and Market
Maker) Regulations, 2064 (2008)

In exercise of the power conferred by Section 116 of Securities Related Act, 2063 (2007), Securities Board of Nepal has, upon the approval of the Government of Nepal, made the regulations as follows.

To open stock broker, individual needs to follow some criteria for eligibility. We discuss some of them and also attached pdf file too.

First of all you need to submit application file with application fees for the license and yo get license we must know these things.

1. Application file 

2. Application fees

Application fee, license fee and annual fee

Application fee License fee Annual fee

1. Stock Broker Rs.40,000/- Rs.25,000/-

Rs.5,000/-

2. Securities Dealer Rs60,000/- Rs.40,000/-

Rs.8,000/-

3. Market Maker Rs60,000/- Rs.40,000/-

Rs.8,000/

3. Maintain minimum these criteria 

1. Minimum infrastructure to be prepared by the Stock Broker

(a) Area of the office shall be of minimum 200 square feet.

(b) Minimum three sets of computer, printer, fax and telephone

(c) Minimum five employees with at least one graduate degree holder

(d) Provisions regarding organizational structure and division of job

(e) Office shall have to be established in a location convenient for public access.

2. Minimum infrastructure to be prepared by the Securities Dealer and the Market Maker

(a) Area of the office shall be a minimum of 500 square feet.

(b) Minimum five sets of computer, printer, fax and telephone

(c) Minimum seven employees with at least two graduate degree holders

(d) Provisions regarding organizational structure and division of job.

4. Paid up capital 

Paid-up Capital (Minimum)

1. Stock Broker Rs. 20,00,000/-

2. Securities Dealer Rs. 2,00,00,000/-

3. Market Maker Rs. 2,00,

With necessary documents which was mentioned in pdf file 

Chapter – 1

Preliminary

1. Short Title and Commencement:

(1) These Regulations may be called

"Securities Businessperson (Stock Broker, Securities Dealer and Market Maker)

Regulations, 2064 (2008)".

(2) These Regulations shall be deemed to have been commenced from the date as prescribed by the Securities Board of Nepal.

2. Definitions:

Unless the subject or the context otherwise requires, in these Regulations,-

(a) "Act" means Securities Related Act, 2063 (2007).

(b) "Board" means the Securities Board of Nepal established pursuant to Section-3 of Securities Related Act, 2063 (2007).

(c) "Director" means the Member of the Board of Directors of the Stock Broker or Securities Dealer or Market Maker and this term also includes the chairperson.

(d) "License" means the license issued by the Board pursuant to the Regulation 4 for the operation of securities business.

(e) "Stock Broker" means a corporate body or a company licensed as Stock Broker from the Board for carrying out the functions pursuant to Sub regulation (1) of Regulation 27.

(f) "Market Maker" means a corporate body licensed as Market Maker from

the Board pursuant to Sub-regulation (3) of Regulation 27.

(g) "Securities Dealer" means a corporate body licensed as the Securities Dealer and the Market Maker from the Board for carrying out the functions pursuant to Sub-regulation (3) of Regulation 27.

(h) "Authorized Representative" means a person appointed by the Stock Broker, the Securities Dealer and the Market Maker and registered with the Board pursuant to Regulation 21 in order to solicit contact and enter into agreement with the clients. However, this term shall not include the

person who represents the trading floor and performs the trading on behalf

of the Stock Broker or the Securities Dealer and the Market Maker.

(i) "Securities Businessperson" means the Securities Businessperson as defined pursuant to Part (k) of Section 2 of the Securities Related Act, 2063 (2007).

Chapter – 2

Provisions regarding License

3. Application to be submitted for Obtaining License:

 (1) Any body willing to obtain license for operating securities business as a Stock Broker, Securities Dealer and Market Maker shall require to submit an application in the format given in the Schedule – 1 along with the application fee given in Schedule – 2 and recommendation from Stock Exchange to the Board.

(2) The Stock Exchange while making recommendation for the Stock Broker, Securities Dealer and Market Maker pursuant to Sub-regulation (1) shall

require to carry out the procedure as laid down below:-

(a) The Stock Exchange shall determine the number of Stock Broker, Securities Dealer and Market Maker considering the available physical infrastructure, the needs of Stock Exchange and the number of additional Stock Brokers needed with respect to build a competitive securities market.

(b) After identifying the number pursuant to part (a), shall have to select the qualified Stock Broker, Securities Dealer and Market Maker on the basis of practicality as far as possible.

(c) While making selection pursuant to part (b), an additional 25 percent of the number determined pursuant to part (a) is also recommended to the Board.

(d) While specifying the percentage pursuant to part (c), a fraction shall

be rounded up to one if it is half or more.

(3) The application to be submitted pursuant to Sub-regulation (1) shall

be accompanied with the following details and documents regarding the applicant

company or corporate body:

(a) Details pursuant to Schedule – 3 regarding Promoters, Directors and the Executive Chief.

(b) Details and Documents pursuant to Schedule – 4 regarding the applicant company or a corporate body.

(c) If any company or corporate body is a promoter of the Securities Dealer and Market Maker, details and documents pursuant to Schedule – 5 regarding the concerned company or the corporate

body.

(4) While conducting examination on the application and information attached thereto received pursuant to Sub Regulation (1), if it is not found consistent with the procedure, the Board my demand for additional details or documents

(5) In case of any change in the information supplied along with the

application pursuant to Sub-Regulation (1) before providing the license pursuant

to these Regulations, the applicant shall be required to inform such changes

immediately to the Board.

4. License to be issued: 

(1) While conducting examination on the

application and information attached thereto received pursuant to Regulation 3, if it is found reasonable to provide license on the basis of provisions of the Act and

these Regulations, the Board may require the applicant to make necessary arrangement for infrastructure pursuant to the Regulation 5.

(2) Within 30 days of receiving the information of making arrangement

of necessary infrastructure pursuant to Regulation 5, the Board shall make onsite inspection and inquiry regarding the infrastructure as prepared by the Stock

Broker, Securities Dealer and Market Maker and if the arrangement furnished

with regard to the infrastructure is found adequate, license for operation of

Securities Business pursuant to Schedule – 6 shall be issued against the fee

pursuant to Schedule – 2.

(3) While making inspection and inquiry pursuant to Sub-Regulation

(2), if the infrastructure furnished by the Stock Broker, Securities Dealer and

Market Maker is deemed insufficient for the operation of securities business, the

Board may ask for making additional arrangement allowing maximum of three

months time.

(4) The applicants who are disqualified for the license pursuant to these Regulations shall be informed regarding same within seven days of such decision. 

5. Infrastructure to be arranged: The Stock Broker, Securities Dealer and Market

Marker shall be required to arrange minimum infrastructure pursuant to schedule - 7 required for operation of the securities business within six months of getting notice pursuant to Regulation 4 from the Board and shall report to the Board on the completion of the infrastructure.

6. License to be Obtained by existing Stock Broker, Securities Dealer and

Market Maker: 

(1) The Stock Broker, Securities Dealer and Market Maker who have been in operation at the time of commencement of the Act, shall require to submit the application fee as prescribed in Schedule – 2 and the details and documents as following within three months of enforcement of these Regulations for obtaining the license:

(a) Copy of updated Memorandum and Articles of Association,

(b) Copy of resolution of Board of Directors regarding obtaining the

license,

(c) Evidence certifying the paid-up capital,

(d) Original certificate of registration of existing Stock Broker, Securities Dealer and Market Maker permitting them to conduct securities business,

(e) Details pursuant to Schedule - 3 regarding Directors and the Executive Chief,

(2) The Securities Businessperson who has been in operation at the time of commencement of these Regulations shall require to make arrangement

of infrastructure prescribed in Schedule – 7 within three months of commencement of these Regulations and shall report the Board on same.

(3) The Board shall make necessary inquiry regarding the Stock Broker, Securities Dealer and Market Maker submitting the application fee and

the details and documents pursuant to Sub-Regulation (1) and shall provide the

license in the format pursuant to Schedule – 6.

(4) The Board may make on-site inspection and inquiry regarding

infrastructure pursuant to Sub-Regulation

 (2) arranged by the Stock Broker,

Securities Dealer and Market Maker within three months of submission of

application pursuant to Sub-Regulation (1).

7. Securities Business may be Operated through Subsidiary Company:

(1) The Bank or Financial Institution established under the prevalent

laws may conduct securities business as Stock Broker, Securities Dealer and

Market Maker through their respective fully owned subsidiary company.

(2) Notwithstanding anything contained in these Regulations, the provisions regarding capital structure and ownership of and trading by the subsidiaries conducting securities business as Stock Broker, Securities Dealer and Market Maker shall be as prescribed by the Board from time to time.

8. Renewal of License: 

(1) The Stock Broker, Securities Dealer and

Market Maker shall submit an application as prescribed in Schedule - 8 along

with the renewal fee as prescribed in Schedule – 2 and renew the license for

each fiscal year.

(2) The Stock Broker, Securities Dealer and Market Maker failing to submit the application for renewal within three months of completion of the fiscal

year shall not be allowed to conduct trading from the date of completion of such period until the license is renewed.

(3) The Board may withheld the license renewal of the Stock Broker, Securities Dealer and Market Maker who fails to submit the report to be submitted to the Board pursuant to Regulation 35. 

There are so many process regarding,how to open stock Broker. I attached pdf file issued by SEBON. 

You can download it from here