20-point suggestions for stock market reform: Demands range from bringing SEBON under government control to broker-free trading
The Nepal Stock Market Investors Association has submitted a 20-point suggestion to the Finance Committee of the House of Representatives, demanding structural reforms in the capital market, regulatory restructuring, and implementation of a broker-free trading system. The association has suggested bringing SEBON under government control and forming a separate securities commission led by experts.
The Nepal Stock Market Investors Association has presented various suggestions to the Finance Committee of the House of Representatives for reforms in Nepal's capital market. The association submitted a 20-point suggestion to the committee chair on Wednesday.
While handing over the letter to the Finance Committee chair, the association demanded broad changes ranging from structural reforms of the capital market, regulatory restructuring, technological improvements, broker system, IPO, tax, and listing system. In the suggestion paper submitted to the Finance Committee, association president Hari Bahadur KC stated that problems have persisted in Nepal's capital market for a long time and that piecemeal reforms have failed to deliver expected results.
The association has demanded the formation of a separate 'Securities Commission' led by experts and inclusive of all stakeholders, rather than keeping the current reform process in status quo. The association suggests that such a commission should study securities laws of the US, UK, and India, as well as conduct on-site studies of the Dubai Stock Exchange and Shanghai Stock Exchange, to prepare a proposal for comprehensive legal reforms for Nepal's capital market.
The association has also stated that Nepal's capital market should be upgraded to match the standards of international organizations such as IOSCO, World Federation of Exchanges, and ANNA. The association claims that the current share trading system is not under government control, raising concerns about confidentiality and security. Therefore, it has suggested that the trading system should be brought under immediate government control, and necessary protective arrangements should be made considering potential security sensitivities arising from artificial intelligence (AI).
Demand for broker-free trading system
The association has also proposed implementing a broker-free trading system, ending excessive brokerage and intermediation in the capital market, in line with the current government's policy of building a 'broker and middleman-free nation'. Noting that the current trading system is geographically centralized, the association demands that TMS for share trading be linked with the trader's bank account to operate transactions.