News & Updates :30-07-2017

SEBON seeks applications for merchant bankers

The Securities Board of Nepal (SEBON), the regulatory authority of the capital market, has reopened the new licence for merchant bankers.

Nine months after the regulatory authority made a decision to stop issuance of new licences to merchant bankers, it formally announced the notice to reopen the new licence distribution process on July 18.

After the amendment of the Securities Businessperson (Merchant Banker) Regulation, 2008, on July 18, the regulatory authority has called for applications for new licence. SEBON has increased the paid-up capital requirement of merchant bankers and working area too through amendment.

According to Niraj Giri, spokesperson for SEBON, after the Securities Businessperson (Merchant Banker) Regulation, 2008 was amended, merchant bankers will now be able to work as institutional advisers as well. Previously, merchant bankers were allowed to work in four areas, which include issue manager, securities underwriter, share registrar and portfolio manager.

As per the criteria mentioned in the amended regulation, merchant bankers now need to have a minimum paid-up capital of Rs 30 million to Rs 200 million, depending on which areas the merchant bankers seek a licence to work in.

“The paid-up capital requirement varies as per their working area. If a merchant banker wants to provide all five types of services, then they will need to have paid-up capital of Rs 200 million,” Giri said.

SEBON has also directed existing merchant bankers to increase their paid-up capital as per amended regulation within current fiscal, 2017-18. Previously, paid-up capital requirement for an issue manager was Rs 30 million and for security underwriter it was Rs 40 million.

Likewise, a share registrar had to have paid-up capital of Rs 10 million and portfolio manager required had to have such capital of Rs 10 million. And for merchant bankers who were providing all the mentioned services, the paid-up capital requirement was Rs 70 million.

Currently, a total of 23 merchant bankers are providing various services in the country. A majority of them are serving investors as issue manager, security underwriter, share registrar and portfolio manager, whereas, some of them are working as only portfolio manager.

Source: The Himalayan Times

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