KATHMANDU: The Securities Board of Nepal (SEBON) has proposed allowing organized institutions, other than banks and financial institutions, insurance companies and entities established under special laws, to issue bonds.
In the draft ‘Securities Registration and Issuance Regulation, 2026’ published Thursday, SEBON has proposed requiring such institutions to provide security or collateral when issuing bonds. The provision aims to strengthen protection for investors in bonds issued by ordinary organized institutions.
However, SEBON has sought feedback from stakeholders on whether institutions with high credit ratings should also be allowed to issue unsecured bonds. The board has asked stakeholders to comment on whether collateral should be mandatory for all such institutions.
Currently, corporate bonds listed and traded in Nepal’s securities market are largely issued by banks and financial institutions. Government bonds are also listed, but their secondary market trading remains limited. Bonds are generally issued for a fixed period at a predetermined interest rate, and their rates have recently remained higher than deposit rates as bank deposit rates have declined.
International financial institutions
The draft also proposes allowing international financial institutions to issue bonds in Nepal. Such institutions would need government approval and would be required to disclose the purpose of the issue, use of proceeds, financial statements, risks and other relevant information.
Funds raised through such bond issues would have to be invested in Nepal. The proposed framework also includes requirements relating to prospectuses, due diligence, issue and sales managers, and trustees.
The draft further allows Nepali companies to issue bonds in foreign currencies in overseas capital markets with approval from SEBON and Nepal Rastra Bank.
For bond issuance, the draft proposes two mechanisms—public issuance and private placement. Under private placement, an organized institution could offer bonds to a maximum of 50 qualified investors without public advertising or marketing, using letters, telephone calls, SMS or electronic communication.
Qualified investors would include listed companies, banks and financial institutions, insurance companies, merchant bankers, mutual funds, retirement and welfare funds, the Employees Provident Fund, Citizen Investment Trust and Social Security Fund.
Securities brokers, dealers, issue and sales managers, investment managers, investment advisers, market makers, universities, companies with at least Rs 500 million in paid-up capital and distributable reserves, foreign institutions, foreign governments and international institutional investors would also qualify. Individuals investing at least Rs 10 million would also be eligible.
