SEBON to classify brokers into four categories, institutional reforms in three phases

The Securities Board of Nepal (SEBON) will classify securities brokers into four categories. The Board has introduced this arrangement through the 'Securities Broker Business Strengthening Policy, 2083'.

Under the policy, brokers will be classified based on capital, risk-bearing capacity, service diversification and institutional capacity. Brokers in different categories will be allowed to offer different services depending on their risk-bearing capacity.

The Board said the policy has been introduced with the objective of strengthening the financial, institutional and technological capacity of broker companies, which serve as intermediaries in the capital market. Institutional reform of brokers will be carried out in three phases.

The policy provides that brokers unable to meet the specified capital and technical capacity requirements will be required to merge, and those that do not merge will be downgraded to a lower category.