SEBON Drafts Margin Lending Regulation to Modernize Nepal’s Capital Market

The Securities Board of Nepal (SEBON) has moved forward with plans to modernize Nepal’s capital market by introducing margin lending, intraday trading, securities lending and borrowing, and covered short-selling in line with international practices.

Although Nepal’s capital market has made significant progress in institutional development, electronic trading systems, and expansion of the investor base, SEBON has highlighted the need for further qualitative development to make the market more modern and competitive.

As the first step, SEBON has prepared a draft Margin Loan Transaction (Margin Lending) Regulation. The proposed framework would allow eligible investors to invest using their own equity margin as well as loans obtained from securities brokerage firms.

The draft regulation was discussed and refined by a committee formed to coordinate and facilitate the implementation of the Secondary Market Improvement Plan. The committee includes representatives from SEBON, Nepal Stock Exchange (NEPSE), CDS and Clearing Limited, and the Stock Brokers Association of Nepal.

SEBON has now made the draft regulation available for public consultation and will review suggestions and feedback received from stakeholders before finalizing the regulation.

The regulator has requested interested stakeholders to submit their suggestions and feedback via email at support@sebon.gov.np.

The detailed consultation document, including the key features of the proposed regulation and specific questions for stakeholder feedback, is available through the public consultation document released by SEBON.