Sebon approves the directive for Margin Lending ; See what does the directive includes
Securities Board of Nepal (SEBON) has endorsed the directive for margin lending. Following this approval, investors can soon borrow from their respective brokers. The directive includes 23 points regarding the overall process. Some of major points are :
- Brokers can only lend for those listed companies specified by nepse that have a minimum of 10,000 shareholders, a positive networth and has distributed atleast 10% dividend in the last 2 consecutive years.
- Brokers can lend amount as high as twice its net worth.
- The customers should initially pay an amount that is 50% of 180 days average or the market price, whichever is lower.
- The broker can lend any customer or his family member, not more then 10% of the networth.
- Brokers need to have a net asset of Rs 5 crores, out of which Rs 2 crores needs to be set aside for the regilar operation.
- Broker can lend from their own source or from the amount borrowed from Commercial banks.