The meeting of the Finance Committee of the Federal Parliament on Monday has directed to immediately stop the operation of broker companies and the establishment of new stock exchanges.
“It has been decided to instruct the Nepal Government Ministry of Finance, the Nepal Securities Board and the Nepal Stock Exchange to immediately suspend the entire licensing process until the committee investigates and reaches a conclusion regarding the failure to fulfill the minimum standards regarding the granting of licenses to securities brokers and securities dealers,” the committee’s meeting on Monday said. It is mentioned in the decision.
Similarly, the committee has also instructed not to proceed with the work of establishing a new stock exchange until another decision is made after a detailed study.
With these decisions, confusion has arisen as to what will happen to those who have obtained a license for brokers from the Securities Board.
So far, the Securities Board has given letters of intent to 43 broker companies and 18 of them have already received licenses. Licensed broker companies have now applied for membership in Nepal Stock Exchange (NEPSE).
NEPSE should automatically grant membership to broker companies that have already received permission. After the instructions of the Finance Committee, even such membership given by NEPSE will be stopped immediately.
“We have added new broker companies asking for membership,” NEPSE spokesperson Murahari Parajuli said. Now it is not possible to give immediately.’
After receiving the decision of the Finance Committee, the Securities Board has also suspended the process of granting permission for the time being.
“Now this process will be stopped until there is another decision from the committee,” said Muktinath Shrestha, executive director of the Securities Board.
Even before this, a case was filed in the court regarding appointment of broker, new stock exchange. The last time was on Chait 26, 2079, by canceling the writ regarding the appointment of the broker and opening the way for the process to proceed.
After the complaint and discussion in the Finance Committee, instructions were given to stop this process immediately. Therefore, until the Finance Committee clears the knot, no process of the brokers who have received and are yet to be allowed will proceed.
Article 103 of the Constitution has given special powers to the Federal Parliament.
It is said, ‘Each House of the Federal Parliament, subject to the Constitution, shall have full authority to act and decide on its work….No question in this regard shall be raised in any court.’
In the explanation of clause 5 of this provision, it is said, ‘House means the House of Representatives or the National Assembly and the word also refers to the joint meeting or committee or joint committee of the Federal Parliament.’
However, further decisions will be made based on whether the process of adding brokers is in accordance with the Supreme Court’s order, Santosh Chalise, chairman of the Finance Committee, informed.
“It is a matter that has already been decided by the honorable court, we will decide on it after seeing whether the process is done accordingly,” Chalise said, “We will call another meeting for this soon.”