24th January 2205, Kathmandu
The Nepal Stock Exchange (NEPSE) is reviewing whether to establish a separate SME platform or simply add a new subgroup within its existing index.
SEBON Approves SME Trading Rules
This comes after the Securities Board of Nepal (SEBON) approved new regulations for the issuance and trading of securities for small and medium-sized enterprises (SMEs). The regulations, which came into effect on 16 January 2081, aim to enhance SME participation in the stock market.
New Regulations Spark Discussions
SEBON’s recent approval of the “Issuance and Trading of Securities of Small and Medium Organized Enterprises Rules, 2081” has led to discussions within NEPSE about how to implement the new rules.
According to these regulations, NEPSE and the Central Depository System and Clearing (CDSC) are responsible for executing the guidelines. While SEBON’s instructions suggest the need for a distinct SME platform, NEPSE officials are considering adding an SME subgroup to their existing index instead.
NEPSE’s Proposal: Adding an SME Subgroup
Some officials within NEPSE believe that creating a separate platform for SMEs may not be necessary. Instead, they propose adding an SME subgroup to the current NEPSE index.
This solution would be less complicated and save time, as the subgroup could accommodate SMEs without the need for a completely new system. “It would be more efficient to add a new subgroup to the existing index,” stated one NEPSE official. “This approach would avoid unnecessary delays and complexities.”
Consultations Ongoing at NEPSE
Discussions are still underway about the best course of action. While some argue for a new subgroup, others are exploring the possibility of a separate platform.
NEPSE officials believe that adding an SME subgroup would be a more practical solution, allowing for faster implementation. “We aim to finalize the decision soon and present it to the NEPSE board for approval,” the official added.
SEBON’s Perspective on Implementation
Despite NEPSE’s internal discussions, SEBON has acknowledged that the full implementation of the regulations may take some time.
According to SEBON spokesperson Niranjay Ghimire, while the regulations have come into effect, NEPSE must develop guidelines and infrastructure before small and medium-sized enterprises can begin trading their securities. “The process will take time,” Ghimire said. “NEPSE needs to create the necessary systems to support SME trading.”
Further Technical Study Needed
Ghimire also mentioned that adding an SME subgroup or platform requires a deeper technical analysis. As the market operator, NEPSE is responsible for designing an appropriate system. “Further discussions will take place to ensure the proper implementation of the SME trading system,” Ghimire added. “It’s essential not to rush the process, as more decisions will need to be made in the coming months.”
Next Steps for NEPSE and SEBON
As NEPSE and SEBON continue their deliberations, they are focused on ensuring that the SME trading system operates smoothly. The ultimate goal is to integrate small and medium-sized enterprises into the stock market efficiently, providing them with more opportunities for growth and funding.
For more: SEBON Approves SME Trading Rules
