2019-09-27

Time to bid adieu to Dr. Karki as Chairman of SEBON

Securities Board of Nepal (SEBON)'s current Chairman, Dr. Rewat Bahadur Karki, had joined SEBON on Kartik 2072 with a tenure of 4 years. This Ashwin his tenure finishes and a new Chairman will lead SEBON.

In the review of his achievements at SEBON, Dr. Karki says that his tenure was not just four years, it had started when he had joined NEPSE as CEO from 2063 to 2065. Thus, some of the achievements from his time in NEPSE and SEBON are:

Privatization of NEPSE from a not-for-profit organization to a for-profit organization.
Replacement of broker by an expert in the Board of Directors of NEPSE along with trading automation which allowed a 50% cut in brokerage charge levied on investors by the broker.
Addition of 27 brokers to 23, taking it to a total number of 50 brokers.
Introduction of float index and circuit breaker.
Implementation of compulsory Demat account and CASBA system has made the market more transparent and efficient. This has decreased the time period of IPO to listing from 6 months to 1 month only. Likewise, the IPO allotment has also decreased from 3 months to just one week.
The system allowing the investors to apply a minimum of 10 units only and lottery allotment has made the system more inclusive of small investors.
SEBON has gained international validity after getting a membership with IOSCO and OECD INFE.
Similarly, the brokerage charge has been further cut by 40%.
Investors can now access market depth.
Provision to add 3 more clearing bank instead of just one.
Direct deposit of cash and bonus dividend of shareholders on their bank and Demat account respectively.
Capital increment of merchant banks along with the addition of services provided by them.
Capital increment of brokers along with the expansion of working area and services via branch establishments.
The human resource of SEBON increased by 3 fold along with capacity enhancement in institutional supervisory functions.
Release of the open-ended mutual fund.
Margin trading service from brokers.
Introduction of various packagaes to attract real-sector companies such as IPO issue at a premium, 15 to 25 percent tax rebate and so on.
Transaction charge in OTC has been decreased by 90%.
Similarly, some of the works that are still in pipeline and under progress are:

Providing brokers license to banks' subsidiaries.
Establishment of regional office and training academy.
Providing license to two commodities brokers given the size of the economy and welfare of the investors.
Amendment of Securities Act to improve Board's Institutional Improvement. Along with this other amendments in pipeline are:
Broker and merchant banking regulation
Mutual Fund regulation
Credit rating regulation
Securities registration and issuance regulation
Insider trading regulation


Similarly, some important issues under discussion are:

Allowing the brokers to provide delearship and advisory services
Consolidation of brokers
Conflict of interest in all the organizations
Allowing the shareholders to apply for twice as much as they have the right to
Adopting book building for public issues
Decreasing the lock-in period for project affected local shareholders
Allowing Life insurance companues to issue mutual fund schemes

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