The Securities Board of Nepal (Sebon) has decided to implement the recommendations made by a government task force formed to restore investor confidence and reform the country’s capital market. The task force, led by Sebon’s Acting Executive Director Rupesh KC, had submitted its report to Minister for Finance Rameshore Prasad Khanal on Sept 24.
Minister Khanal formed the panel on Sept 19 to identify systemic and procedural reforms needed to stabilize and strengthen the capital market. According to Sebon, the task force’s suggestions cover short-, medium-, and long-term measures. These include amendments to existing regulations, easing certain provisions for investors and modernizing trading systems.
With Sebon’s decision to implement the capital market reform task force’s recommendations, new companies entering the stock market through IPOs and those raising funds via rights issues will now be required to meet certain standards. These criteria will be enforced jointly by the finance ministry and Sebon within a year. In line with the recommendations made by the panel, Sebon plans to amend the Securities Registration and Issue Regulations to raise the minimum public offering (IPO) requirement from 10 percent to 20 percent. Similarly, the lock-in period for promoters’ shares will be made more flexible by allowing phased release instead of lifting restrictions all at once.
The capital market regulator will also move forward with the establishment of a Small and Medium Enterprises (SME) trading platform, as recommended by the task force. Revisions to the rules governing the trading of promoter shares in banks, financial institutions and insurance companies are also on the cards.
For margin loans, Sebon will ensure that investors who pay the due interest by mid-January 2026 will not face additional penalties, even if the payment deadline of mid-November is missed. Short-term measures to be implemented within three months include introducing a margin trading system through brokers and standardizing the Investor ID (IGIN) process managed by CDS and Clearing Ltd.
The task force has also suggested maintaining the Nepal Stock Exchange (Nepse) index as an “all-equity index” and developing a new benchmark based on tradable shares. It has also suggested reviewing the circuit breaker rules. According to the panel’s recommendation, listed companies will be required to reconcile and directly pay the dividend tax on the bonus shares they distribute.
In the longer term, the task force has called for separate specialized laws for securities market regulation, investor protection and trust management, as well as measures to bring Nepse’s trading system in line with international standards and facilitate trading of government and corporate bonds.
