Kathmandu: The Securities Board of Nepal (SEBON) has officially suspended the license of Bhrikuti Stock Broking Company, a move that has effectively frozen the securities of approximately 80,000 investors.
The regulator took this drastic step after an investigation revealed that the brokerage firm had permitted businessman Deepak Bhatta to engage in large-scale share trading without providing any collateral.
Furthermore, the firm was found to be misappropriating the funds of its other clients to settle these unauthorized transactions.
In its disciplinary notice, the Securities Board explained that Bhrikuti Stock Broking violated Rule 31 of the Securities Businessperson Regulations (2007). The investigation uncovered that the firm used money deposited by various clients for share purchases and collateral to settle the trading liabilities of other customers.
By failing to adhere to the established settlement and clearing bylaws, the company bypassed the legal requirements for collecting funds from buyers and distributing them to sellers in a transparent manner.
Additional audits showed that the company routinely allowed clients to purchase securities without collecting the mandatory 25 percent advance payment, a direct violation of the Securities Trading Operation Regulations (2018).
According to SEBON, as of March 26, 2026, the brokerage firm’s outstanding liabilities to its investors reached a staggering Rs 5.11 billion. The regulator noted that such practices, particularly facilitating credit-based trading, could manipulate market prices and have a severe adverse impact on the stability of the entire capital market.
SEBON justified the immediate suspension by stating that allowing the firm to continue its operations would likely result in further significant losses for individual investors. Acting under Section 88 of the Securities Act (2006) and the relevant provisions of the SEBON Regulations, the board has halted all brokerage services provided by the firm.
Along with the suspension, the board has ordered Bhrikuti Stock Broking to settle all outstanding dues to its investors and provide immediate technical assistance to those who wish to migrate their trading activities to other brokerage houses.
Despite the board’s directive to facilitate a smooth transition, the process for affected investors is expected to be complicated. Murahari Parajuli, a spokesperson for the Nepal Stock Exchange (NEPSE), clarified that investors cannot simply start trading through a new firm overnight.
They must first undergo a formal settlement process with Bhrikuti and obtain a clearance certificate before they are permitted to open a new trading account elsewhere. Currently, nearly 80,000 individual investors are registered and active with this specific broker.
Because the suspension specifically targets the firm’s brokerage license, clients who only maintain their Demat or Beneficial Owner (BO) accounts with Bhrikuti will not face immediate disruptions to their holdings. However, those who actively trade through the firm must finalize their accounts before they can operate elsewhere.
Affected clients have the option to submit account closure requests in person, via mail, or through email. Once they receive formal evidence of their account closure, they can then proceed to register with a different stockbroker.
While the Securities Board has instructed Bhrikuti Stock Broking to expedite this facilitation, the ultimate burden of cooperation lies with the suspended firm. For the tens of thousands of investors involved, this regulatory crackdown has resulted in a significant administrative hurdle and a temporary loss of control over their investment portfolios, underscoring the severe consequences of financial non-compliance in the brokerage industry.
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