Beginners,  How To

How to Open a Stock Trading Account in Nepal?

Trying to get into secondary market in Nepal to buy and sell stocks? Check out how to open a stock trading account in Nepal.

How to Open a Stock Trading Account in Nepal?

I hope the previous blog posts have provided a kickstart to investing in the stock market in Nepal. The previous blog posts have actually provided some insights on primary market and how things work here in NEPSE.

In this blog post, I will provide a complete guide on how you can get started in the secondary market. You will learn about how you can get on the floor to start buying and selling stocks through a broker. And to be honest this is the most exciting part of being a stock investor.

Before getting into the actual procedure, make sure that you have read the previous blog posts in this blog if you are just starting in the stock market.

Now let’s get started into trading the stocks in secondary market with the requirements.

Requirements:

Before heading ahead to a stock broker to get a stock trading account for you, make sure you have these requirements fulfilled beforehand.

  • A demat account for stock transactions
  • Bank account for monetary transactions
  • Government verified document that proves your identity (Citizenship certificate)
  • Collateral (Many stock brokers ask you to pay some amount beforehand which is refundable and can also be used to pay for the stocks you buy.)
  • Connect IPS Account

Once you have these requirements fulfilled, the next step is to find a broker. You will have to open a trading account with the SEBON authorized broker which will act as a mediator between buyers and sellers.

Currently there are 50 brokers operating in Nepal. You can choose one as per your preference as all of them provide the same facilities after-all.

The next step is as easy as visiting the broker office filling some basic forms, receiving the credentials and start trading. But let me explain these steps in layman’s terms so that you will have no doubts getting started.

Choose a Brokerage Firm

You’ll need a brokerage firm to create a trading account which will act as a mediator between buyers and sellers in the NEPSE marketplace. You can buy and sell stocks in simple easy steps and all other tasks of depositing the amount for your sold stocks in your bank account and depositing stocks in your demat accounts for bought stocks are performed by these brokerage firms.

There are 50 brokers in Nepal. You can create a trading account with any of these brokerage offices.

But I’ll recommend keeping some of these points in mind before getting into any brokers to open a trading account.

  • Choose a broker that is punctual in terms of payment and depositing shares to your account. You can ask the previous customers of the broker for the nature of the brokerage firm. I have heard many complains of many brokers so keeping this in mind can help you get rid of these frustrations later.

  • Broker nearer to your location can be a better option keeping in mind it meets the first criteria. You may have to visit the brokerage office to create the account, deposit collateral and even for buying and selling stocks. So a broker office that is easily reachable can be a better option.

Keeping these in mind, choose a brokerage firm to create your stock trading account. Remember that you can have a broker account with only one stock brokerage office at a time. Meaning you’ll have to cancel the first account in case you want to change your broker later. This can be frustrating at times so keeping the above two points in mind can be a wise decision.

Opening A Trading Account

After you have chosen a brokerage firm, the next step is to create the stock trading account. Most stock brokers require you to be physically available in the broker office to create an account. But many brokers have made the option of creating a trading account online.

So after choosing the brokerage firm, the next step would be to visit the website of the brokerage firm and find out its contact details. You’ll need these contact details from time to time so saving it your contact book would be a great option as well.

Opening Trading Account Being Physically Available at Broker Office

If you can physically visit the office then that would be a great option to open a stock trading account. You’ll be asked to fill up and submit two forms in the broker office to get a trading account. One of the form will be KYC form and the other is agreement paper for online trading. You can download these documents from the broker’s website as well.

You can fill these form in the broker office and submit it there. You’ll need a passport sized photograph of yours, a scanned copy of your citizenship certificate and they may also ask for your BOID verification document (you can verify that your BOID is valid by yourself as well).

In case you are creating a trading account for minors, you’ll need a photograph and scanned copy of citizenship of the guardian along with photograph and scanned copy of birth certificate of the minor.

Online Trading account Opening

Almost all brokers have started providing online registration for a trading account. You can fill up a simple form and register for a trading account in any of the brokers.

Every broker is provided with a dedicated portal for online stock transaction under TMS. TMS is the official software by NEPSE where online transaction of stocks take place. Every brokerage firm is provided with a unique identification number and the dedicated TMS website address is provided as https://www.tms<brokernumber>.nepsetms.com.np . Suppose you want to open a trading account with broker number 71 then you can access the TMS of that broker at https://www.tms71.nepsetms.com.np .

Next you’ll have to click on register option to create a new account. There you’ll be asked to enter all the details in the KYC form as mentioned above. Also you must have the two forms filled as mentioned above and have them scanned in digital form as you would have to upload them along with the registration form. Also you’ll need to have your passport sized photograph and citizenship certificate in scanned form to upload it on the registration form for online registration.

After you have submitted the forms be it online or offline, you’ll have to wait until you receive an email on the email you provided on the registration form for online trading. If you hadn’t applied for online trading, you’ll have to visit or call the broker office for 10 digits unique client code which you’ll use to buy and sell stocks. If you have received the client code you can now start buying and selling stocks by visiting the brokerage office or making a phone call to the broker for buying and selling orders.

If you had applied for online trading account, you’ll receive the client code in your email. Also you’ll receive and email for setting up a password for logging in to your TMS dashboard. You can always call your broker asking if your application form has been verified to speed up the process.

The next step is to start buying and selling stocks. You may be asked to load collateral before you can start buying stocks and more on this later.

I hope this article will help you set up a trading account for you. Make sure to share this with your friends and family.

And welcome to the investing world!

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