SEBON Unveils White Paper for Long-Term Development of Nepal’s Primary Capital Market

The Securities Board of Nepal (SEBON) has unveiled the “White Paper on the Development of Nepal’s Primary Capital Market, 2083” as part of its regulatory reform initiatives under the capital market policy for Fiscal Year 2083/84.

The white paper has been introduced with the objective of bringing qualitative development to the public issuance system and establishing a long-term vision for the development of Nepal’s primary capital market.

The document assesses the current state of Nepal’s primary capital market, existing legal and institutional limitations, and strategic reforms required over the coming decade. It also provides an integrated policy framework aimed at making the primary market more transparent, fair, competitive, efficient, technology-driven, and aligned with international best practices.

The white paper covers regulatory developments in Nepal’s primary market to date, the current state of the capital market, major problems and challenges, proposed solutions, future strategies, and relevant international practices and experiences.

SEBON has proposed a three-phase implementation strategy for the long-term development and reform of the primary capital market.

Under the first phase, to be implemented within one year, the focus will be on policy and legal reforms, including amendments to relevant acts and regulations and a review of the existing book-building system.

The second phase, planned for one to two years, will focus on institutional and technological strengthening. Key initiatives include the development of a Digital IPO Platform, e-KYC, RegTech, and SupTech systems to modernize and streamline market operations.

The third phase, targeted for two to five years, will focus on advanced market development, including fully market-based price discovery and the participation of Qualified Institutional Buyers (QIBs) and anchor investors.

The white paper also seeks to strengthen the due diligence responsibilities of issue and sales managers, auditors, and credit rating agencies. SEBON aims to make these institutions more effective, accountable, and responsible in the public issuance process.

According to the board, the reform initiative goes beyond improving the IPO system. It is envisioned as a strategic reference policy document for Nepal’s broader economic transformation, with a focus on mobilizing long-term capital for national capital formation and enhancing the competitiveness of the private sector.

SEBON has stated that the proposed reforms will be implemented gradually through policy, legal, procedural, and technological improvements, following continuous consultation with relevant stakeholders.

The board expects the white paper to play an important role in increasing investor participation and financial literacy in the primary market, while also supporting the development of new and diversified primary market instruments.

SEBON believes that the proposed reforms will contribute to the qualitative development of Nepal’s primary capital market and help mobilize the long-term capital required to support sustainable economic growth and transformation.