You probably know about the brokers if you are familiar with the secondary share market. The secondary market is where the shares can be bought and sold.
Brokers are the people associated with the broker company who help you buy and sell shares in the secondary market by acting as an intermediary between the investors and the NEPSE.
What is broker payment/ broker commission?
Broker payment is the amount charged by brokers charged for their services. The amount you should pay as broker payment or commission depends on the amount being traded.
The broker’s commission and the trading amount have an inverse relationship. If the amount being traded is high, you will have to pay a lower broker’s commission than the high broker commission you will have to pay when the amount being traded is low.
How much is the broker’s commission in Nepal?
The broker commission is expressed in percentage and is subtracted from the total trading amount. There are many broker companies in Nepal, and almost all the brokers take a similar amount of brokerage commission.
As of 2024, you should pay 0.40 to 0.27 percent of your total profit as broker payment/ commission in Nepal.
In equity trading, the stockbroker commission per transaction is as follows:
| Transaction amount | Broker’s commission in percentage |
| Upto Rs.50,000 | 0.40 |
| From Rs. 50,001 – 5,00,000 | 0.37 |
| From Rs. 5,00,001 – 20,00,000 | 0.34 |
| From Rs. 20,00,001 – 1 crore | 0.30 |
| From Rs. Above 1 crore | 0.27 |
Sebon Commission is equal to 0.015% of the transaction amount, and each company’s daily share transfer cost (DP amount) is Rs. 25.
What is an example of a broker’s commission calculation?
Example of calculation of broker’s commission when you buy shares.
When you buy 10 shares worth Rs. 400
Total transaction amount = 10 x 400 = Rs.4000
Broker’s commission = Total amount x commission rate for an amount less than Rs. 50,000
= 4000 x 0.4%
=Rs. 16
Example of calculation of broker’s commissions when you sell shares.
When you sell 10 shares worth Rs. 400
Total transaction amount = Rs. 4000
Broker’s commission = Total amount x Commission rate for an amount less than Rs. 50,000
=Rs. 16
Do you have to make the broker payments yourself?
No, you do not have to make payments to the broker yourself. When you buy or sell shares, the amount you receive or pay will already be deducted from the broker’s commission. You do not have to worry about having to calculate it while buying or selling shares.
However, you should know how the broker’s commissions are calculated so that you are not overcharged by brokers.
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FAQs
What are the fees for NEPSE?
NEPSE charges 20% of the brokerage fee.
Are brokers free?
No, brokers are not free but, they do charge a very minimal amount.
Who owns NEPSE?
NEPSE is owned by the Government of Nepal.
How do I contact a broker?
Different sites like resultsofipo.com offer you information that allows you to contact brokers near you.
Who are brokers?
Brokers are intermediaries between investors and the securities market who enable you to buy or sell the shares.
Why do you need to pay brokers?
You need to pay the brokers some amount of commission for their service.
Can you buy and sell shares yourself?
You cannot buy or sell shares yourself. It is a standard practice to use a broker in these transactions.
What determines the percentage of commission?
The rate of commission depends on the total value of the traded shares.
Conclusion
So, this was the basics of what a broker’s commission is. You can easily calculate the broker’s commission yourself too, but you don’t have to. But this is general knowledge that you should know.
Make sure you do a thorough check and understand the services of the broker before you appoint them for yourself. It is also very important that you discuss the costs and the services beforehand.