Market Watch

Nepse, SEBON spar on brokers recruitment process

Published by Octron on July 6, 2010

The Securities Board of Nepal (SEBON) and Nepal Stock Exchange (Nepse) are at loggerheads over the appointment of new stockbrokers at the country´s sole secondary market. Nepse has halted the process to appoint new stockbrokers after SEBON — the stock market regulator — initiated investigation on alleged irregularities in the appointment process. Commission for the Investigation of Abuse of Authority (CIAA) had directed SEBON to look into the appointment process, following complaints registered at CIAA.

Issuing a statement on Friday, Nepse had announced suspension of the process to appoint 27 new brokers. The stock market currently has 23 brokers. Officials of SEBON and Nepse are giving contrasting views on the appointment process. “”There is no need to stop the process of appointing new brokers despite the investigation launched by SEBON. Nepse should cooperate with us for the investigation,” said Shurbir Poudel, chairman of SEBON.

However, Shankar Man Singh, general manager of Nepse, said there is no point continuing the process which is under investigation. Singh is the coordinator of a four-member broker selection committee. “We will resume the appointment process once SEBON gives us clear instructions,” Singh said.

Though the volume of secondary market has significant increased over one and a half decades, number of stockbrokers have not been increased in the same ratio. Though the number of listed companies in the secondary market has shot up to 165 from 160, the number of brokers has declined to 23 from 32 over the period. Keeping in view the expansion of trading and rise in the number of investors, Nepse, two years ago, had initiated the process to add 27 new stockbrokers. However, the process has been delayed due to intervention by CIAA and petitions against the process at the Supreme Court. Even though, the process has not moved ahead as expected despite Supreme Court´s verdict to move ahead with the appointment process.

Source: Kantipur

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