SEBON Forms Committee to Implement Secondary Market Reforms, Begins Work on Margin Lending Framework

The Securities Board of Nepal (SEBON) has formed a dedicated committee to coordinate and facilitate the implementation of major secondary market reforms, including margin lending, intraday trading, securities lending and borrowing, and covered short selling.

The committee has been established as part of the government's commitment to gradually implement the capital market reforms outlined in the Fiscal Year 2083/84 Budget and SEBON's Capital Market Policy for FY 2083/84.

The committee is headed by the Executive Director of SEBON's Supervision Department. Its members include three representatives from SEBON, along with one representative each from the Nepal Stock Exchange (NEPSE), CDS and Clearing Limited (CDSC), and the Stock Broker Association of Nepal (SBAN).

According to SEBON, the committee will be responsible for recommending the legal, technical, operational, and procedural frameworks required to introduce the new market services. It will also oversee the necessary preparations for their phased implementation, coordinate activities related to secondary market reforms, and collaborate with banks, financial institutions, and other relevant stakeholders as needed.

Under SEBON's reform roadmap, the new services will be introduced in four phases:
1. Phase I: Margin Lending
2. Phase II: Intraday Trading
3. Phase III: Securities Lending and Borrowing
4. Phase IV: Covered Short Selling

The committee has already commenced its work by initiating discussions on the draft Margin Lending Regulations, marking the first step toward implementing the board's secondary market reform agenda.

SEBON said the phased introduction of these products and services is expected to improve market liquidity, enhance trading efficiency, provide investors with greater flexibility, and align Nepal's capital market with international best practices.