Following the decision, 18 commercial banks are gearing up to provide brokerage services by establishing a subsidiary company. For this, 11 out of 18 banks have already endorsed the proposal from their AGM. Meanwhile, 5 banks are yet to endorse the proposal from their general meeting while 2 banks are yet to conduct their AGM.
Among those banks, NIC Asia Bank has already established its subsidiary company under the name 'NIC Asia Securities Limited' following the approval of Nepal Rastra Bank and Company Registrar.
The subsidiary companies established by commercial banks require informing Nepal Stock Exchange (NEPSE) after setting up the necessary infrastructure. NEPSE, then, field inspect the company and submit the detail report to SEBON. If the regulatory bodies approves, then the subsidiary company can start the brokerage services.
According to the mechanism, the commercial bank must maintain at least 51 percent ownership in the subsidiary company. The subsidiary companies are not allowed to trade stocks of their mother company.
However, NEPSE informed that not a single subsidiary company of any commercial bank has come forward for the initiation of brokerage services. In the other hand, the proposed subsidiary companies feel that the licensing process of brokerage services is long and exhausting.
