The Securities Board of Nepal (SEBON) has resumed issuing merchant banking licenses after a six-year suspension. The board announced that it has reinstated the distribution of licenses, which had been halted since July 24, 2018.

According to SEBON's Deputy Spokesperson Tolakant Neupane, the resumption allows merchant bankers to provide issuance and sales management as well as share registration services under the Securities Businessperson (Merchant Banker) Regulations, 2064. Although the regulations outline five core services—issuance and sales management, securities underwriting, share registration, investment management, and institutional advisory services—the first two had been on hold for six years.

Currently, 31 merchant bankers operate in Nepal, but only 13 hold licenses for all five services. With the reinstatement of issuance and sales management and share registration licenses, SEBON has also introduced provisions enabling licensed merchant bankers to launch initial public offerings (IPOs). As per the new rules, a company must have operated for at least 10 years and maintain a minimum paid-up capital of Rs 1 billion to be eligible for an IPO. Additionally, such firms are required to allocate at least 30 percent of their shares to the general public. SEBON believes this measure will facilitate long-established firms seeking capital for business expansion through public investment.

The board has also determined specific application, licensing, and annual fees for different merchant banking activities. The fees for issuance and sales management are set at Rs 25,000 for application, Rs 300,000 for the license, and Rs 150,000 annually. Similarly, for share registration, the application fee is Rs 25,000, the license fee is Rs 200,000, and the annual fee is Rs 100,000. The fees for other merchant banking services remain unchanged, with securities underwriting and institutional advisory services each requiring an application fee of Rs 25,000, a license fee of Rs 300,000, and an annual fee of Rs 150,000. For investment management, the application fee is Rs 25,000, the license fee is Rs 200,000, and the annual fee is Rs 100,000.

With these regulatory changes, SEBON aims to streamline merchant banking operations, expand financial services, and create more investment opportunities in the capital market.  (Updated news)