Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Securities Board of Nepal (SEBON) is set to review the current provision of margin lending through securities brokers. The decision comes as part of SEBON’s annual policy for the fiscal year 2082/83, aiming to improve investor protection and strengthen the securities market.
Currently, margin loans are provided to investors via broker companies. SEBON has announced plans to re-evaluate and improve this system to reduce risks and ensure transparency in the capital market.
Alongside this, SEBON has introduced several other reforms. It will facilitate secondary market trading of government bonds and make it easier for government institutions to raise capital through bonds. It also plans to introduce new financial tools, including intra-day trading and securities lending and borrowing systems.
SEBON will study the possibility of launching derivative products in the market and build the infrastructure needed to support equity derivative trading. These efforts aim to diversify the secondary market and increase overall trading volume.
To protect investors, SEBON will implement a new reporting format for merchant bankers, brokers, mutual funds, and listed companies. A risk-based supervision system will be introduced. ASBA member banks will be required to verify IPO applications instantly through API integration with CDS and Clearing Ltd. This will make the refund process faster after share allotment.
In the secondary market, a new rule will ensure that shares are only traded if the buyer has enough funds in their bank account. This aims to prevent fake transactions and improve settlement security.
SEBON will also monitor how companies use the funds raised through public issues, ensuring they are spent as promised. The board will update laws to classify listed companies based on current performance and governance standards.
Other plans include strengthening the Investor Protection Fund, allowing broker companies to expand branches, approving official representatives, and regularly monitoring whether brokers are properly executing client orders.
These steps are part of SEBON’s broader goal to reduce systemic risk, build investor trust, and make Nepal’s capital market more efficient, transparent, and modern.
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