KATHMANDU: The Securities Board of Nepal (SEBON) has published its first-ever consultation paper as part of preparations to introduce new securities financing services in Nepal’s capital market, even as the stock market continues to decline.
The consultation paper seeks feedback from market participants on the proposed introduction of margin lending, securities lending and borrowing (SLB), and covered short selling-financial instruments aimed at making Nepal’s capital market more competitive, efficient, and resilient.
According to SEBON, the move marks the beginning of a broader effort to modernize Nepal’s securities market by introducing internationally recognized market mechanisms. The regulator said successful implementation would require a clear legal framework, robust market infrastructure, modern information technology systems, effective risk management, and strong investor protection measures.
The four-page consultation paper outlines the current state of Nepal’s capital market, reviews international best practices, analyzes the regulatory implications of the proposed reforms, and presents suitable models for introducing margin lending, securities lending and borrowing, and covered short selling in Nepal.
It also defines the respective roles of SEBON, the Nepal Stock Exchange (NEPSE), CDS and Clearing Ltd. (CDSC), stockbrokers, securities dealers, banks and financial institutions, institutional investors, and other market participants.
SEBON said it will prepare and publish separate regulations governing margin lending, securities lending and borrowing, and covered short selling after incorporating feedback received through the consultation process. Stakeholders have been invited to submit their comments via the board’s official email.
The initiative follows the government’s announcement in the FY 2083/84 (2026/27) national budget, which pledged to introduce new capital market products-including intraday trading, short selling, and derivatives-on a phased basis. SEBON said it has begun the necessary legal, institutional, and technical preparations to implement those reforms.
