Majority of brokers out of insurance cover, fire guts a broker office
Though the Securities Act 2063 BS has made it mandatory for a broker to insure office, majority of the brokers have been out of insurance cover exposing their investors' stocks and records to fire and natural calamities.
Yesterday morning, the Imperial Securities (Broker No 45) caught fire due to electric short-circuit in the morning at 7.
According to Motiram Poudel, who is running the brokerage firm, they informed Stock Brokers Association of Nepal, Securities Board of Nepal (Sebon), Nepal Stack Exchange (Nepse) and CDSC. "The representatives from the regulator Sebon, Nepse and CDSC visited the office," association's president Narendra Sinjapati said, adding that the fire could not destroy papers, though it gutted a compute and a desk.
Despite CDSC claiming to demat all the stocks, most of the listed companies have yet not dematerialise their stocks. "The demat by CDSC will save the stock papers but in absence of insurance, the brokers will still be exposing themselves to higher risk," said share market analyst Rabindra Bhattarai.
The regulator of the capital market has also not been serious on making the brokers follow the law of the land.