The working group submitted the capital market reform report

Suggestions from removal of share loan limit to restructuring of NEPSE.

Ashwin 9, 2082

Kantipur Reporter

The working group submitted the capital market reform report

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The working group formed for capital market reform has submitted its study report to the government. In which suggestions are included from the removal of the maximum limit of 250 million in individual share mortgage loans to the restructuring of NEPSE.

In the report, there are suggestions to be made in the immediate, medium and long term.

"Removing the maximum single customer limit of 250 million for margin-type loans flowing from banks and financial institutions to share securities," the report states.  In the

report, banks and financial institutions have been suggested to abolish the provision that banks and financial institutions can only invest in shares and bonds of listed organizations for a period of more than one year . According to the recommendation report prepared by the

working group, it is suggested to arrange that no additional penalty will be charged if the interest to be paid by the end of 2082 Ashwin of the margin nature of loans flowing in share securities by the end of January and to implement the margin trading system through the securities broker business .

These are the immediate suggestions:

- The maximum single customer limit for margin loans from banks and financial institutions to share securities is Rs. Removing 25 crores .

- Repeal the provision that banks and financial institutions can only invest in shares and bonds of listed organizations for a period of more than one year. 

- Arranging that no additional penalty will be charged if the interest to be paid by the end of 2082 Ashwin for the margin loan in share mortgage is paid by the end of Pus.

– implementing a margin trading system through a stockbroker trader .

- Set and implement certain standards to maintain uniformity in the Isign provided by CDS and Clearing Limited.

- To maintain the current NEPSE index as an equity index of all types, to develop a new index based on tradable shares and use it as a basic index, and to revise the circuit breaker rule based on that.

– Clarifying the practice of capital gains tax as a final tax on profit from sale of non-commercial shares. 

– Facilitating the process of getting the tax payment certificate that should be obtained based on the tax filed in the share sale transaction .

- Arrange that the dividend tax incurred during the distribution of bonus shares provided by the organized organization to the investors should be matched and paid by the related organized organization.

- In case the investor fails to pay the amount according to the purchase order on time, or if the securities broker fails to pay the investor on time, to maintain consistency in the arrangements related to the liability or return payment created from the said amount.

– providing that the investor can open two or more beneficiary accounts .

- Nepal Stock Exchange Limited will objectively classify listed companies on the basis of their financial strength, liquidity and institutional governance, and arrange for 100 percent cash margin to be taken for the transactions of Z group companies after the classification.

- Establishing and operationalizing the necessary complaint management mechanism for immediate resolution of investor's problems and complaints.

– Establishment of mechanisms to conduct investigations of securities related offenses in a timely and effective manner.

– Conducting various trainings and workshops for capital market literacy among investors.

Kantipur

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