Banking News – The Nepal Securities Board (SEBON) has published its first-ever consultation paper to gather stakeholder feedback on the introduction of new securities financing services, including margin lending, securities borrowing and lending (SBL), and covered short selling.

According to the Board, the consultation paper has been released to assess market readiness and collect recommendations from stakeholders before implementing the new market mechanisms.

The initiative follows the Government of Nepal’s Fiscal Year 2083/84 Budget, which announced the phased introduction of new capital market instruments such as intraday trading, short selling, and derivatives. SEBON said it has begun the necessary legal, institutional, and technical preparations to implement these reforms.

The consultation paper is divided into four chapters. The first chapter reviews the current state of Nepal’s capital market, analyzes structural challenges, and identifies the need for reforms. The second chapter examines international experiences, global best practices, and key lessons relevant to Nepal. The third chapter focuses on regulatory impact analysis, while the fourth chapter presents policy recommendations and a proposed implementation model tailored to Nepal’s capital market.

SEBON said the document clearly defines the roles and responsibilities of the Nepal Securities Board, Nepal Stock Exchange (NEPSE), CDS and Clearing Limited (CDSC), stockbrokers, securities dealers, banks and financial institutions, institutional investors, and other relevant stakeholders.

The consultation paper also outlines proposed legal reforms, regulatory restructuring, capital market infrastructure development, information technology modernization, human resource capacity building, investor education, and a phased implementation strategy.

The Board has invited stakeholders to submit constructive feedback via email, stating that the recommendations received will be considered while drafting and finalizing the Margin Lending Regulations, Securities Borrowing and Lending Regulations, and Covered Short Selling Regulations.