Broker Accounts Can Now Be Closed Online

The use of technology in Nepal's stock market is on the rise. Today, investors can trade from home via TMS. It is also possible to open broker accounts online through various systems. However, one significant inconsistency still exists — closing an account is so much complicated.

In Nepal, only one broker account can be opened per demat ID. If a broker change is necessary for any reason, the old broker account must be closed. However, many investors have reported that they have to submit applications in person at the broker's office. While transactions can be handled online, the requirement of mandatory physical presence to close an account has become a headache for investors.

Clarification from SEBON

On this subject, the Economic Center had conversed with representatives of the Nepal Securities Board (SEBON). According to SEBON's Assistant Director Ashok Bista, it is possible to close broker accounts online. He stated, "The broker can be sent a request to close the account via email using the TMS-Link email address used when opening the account."

In that email, investors have to include their name, address, contact number, client ID, and other details. According to Bisht, if the email is sent with a handwritten letter matching the signature in the KYC, the process will be even faster.

He further said, "If there are no outstanding financial transactions, the broker should close the account without any delay. This is the broker's responsibility."

What to Do if the Broker Does Not Respond?

If the broker does not close the account even after the process is completed, investors can directly file a complaint to SEBON, Bisht informed. Complaints can be sent to SEBON's official email [email protected] with all details included.

After receiving the complaint, SEBON will ask the relevant broker for clarification and take necessary action, Bisht said. He indicated that if many investors lodge complaints, in the coming days, there may be a facility to request account closure on the broker's website.

Process to Close Broker Account Online

By following the four steps below, investors can close their broker accounts online:

1. Send a request via TMS-Link email. Send an email to the broker's official email address from the email linked to your TMS (Trading Management System) including a request to close the account. Mention your full name, address, contact number, and account details in the email.

2. Sign a handwritten letter matching the KYC signature. If possible, prepare a handwritten letter including your name, address, and contact number and send it attached to the email, matching the signature on the KYC form. This will expedite the process.

3. Settle all financial transactions. Only send the request to close the account after fully settling all financial transactions with the broker (buying-selling, payments, commissions). If there are any remaining amounts or obligations, the broker will not be able to close the account.

4. File a complaint to SEBON if the account is not closed. If the broker does not close the account even after completing all the above processes, send a complaint with full details to [email protected]. SEBON has stated it will investigate and take necessary action against the broker.

Steps Towards a User-Friendly System for Investors

In a country like Nepal, where the capital market is becoming increasingly digital every day, such procedural hassles pose a risk of undermining investor confidence. The situation where an account can be opened in a click within the same ecosystem but has to be visited at the broker's office to close does not align with a user-friendly system for investors.

This clarification from SEBON will empower investors further. Moreover, brokers are also seen as needing to add the facility to close accounts in their online systems as a demand of time.