SEBON Forms Committee to Develop Innovative Financial Instruments in Nepal
The Securities Board of Nepal (SEBON) has formed a committee to advance the development of the legal, technical and institutional infrastructure required for the development, operation and management of innovative financial instruments in Nepal.
The initiative aims to make Nepal’s capital market more transparent, credible and investor-friendly while promoting market deepening and diversification.
The committee has been formed under the coordination of SEBON’s Acting Executive Director. It comprises seven members, including a director-level representative from Nepal Rastra Bank, representatives from Nepal Stock Exchange (NEPSE) and the Merchant Bankers Association of Nepal, among others.
The committee has been tasked with exploring measures to transform Nepal’s securities market into a diversified and multidimensional market rather than limiting it primarily to share trading.
Under the committee’s terms of reference, priority will be given to developing the necessary legal, technical and institutional infrastructure for the trading of corporate bonds, government bonds, municipal bonds, green bonds, infrastructure bonds, Exchange Traded Funds (ETFs), Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs) and, gradually, derivative financial instruments.
The initiative is expected to provide investors with a wider range of investment opportunities while strengthening the depth and diversity of Nepal’s capital market.
The initiative is also aligned with the Capital Market Development Roadmap, 2083 published by SEBON, which has envisioned the phased development of various market segments to promote market deepening and diversification.
The roadmap has identified the gradual development of the corporate bond market, green bonds, municipal bonds, ETFs, REITs and InvITs, and the derivatives market as key areas of capital market development.
Accordingly, the newly formed committee will study and facilitate the development of the legal, technical and institutional frameworks required for innovative instruments such as ETFs, REITs, InvITs, green bonds, municipal bonds, commodity futures and currency derivatives.
The committee held its first meeting today and initiated discussions on the concepts of these financial instruments, their legal and market structures, and other necessary technical preparations.
SEBON expects the initiative to pave the way for the introduction and expansion of new financial instruments in Nepal’s securities market, contributing to the broader and multidimensional development of the country’s capital market.
The development of such instruments is also expected to diversify investment avenues, strengthen market depth and create a more sophisticated and resilient securities market in Nepal.
