SEBON Forms Committee To Streamline Margin Trading In Nepal’s Stock Market

1st August 2025, Kathmandu

In a move that signals a significant step forward for Nepal’s capital market, the Securities Board of Nepal (SEBON) has announced the formation of a special committee. This committee has been tasked with the crucial responsibility of reviewing and amending the existing guidelines for margin trading facilities provided by stockbrokers.

SEBON Margin Trading Guidelines

The initiative comes as a direct response to persistent concerns from market participants about the current directive’s lack of clarity, which has severely hampered the widespread implementation of margin trading.

The Problem with the Current Margin Trading Directive

Margin trading is a powerful financial tool that allows investors to borrow money from a broker to purchase securities. The goal is to leverage one’s investment capital to potentially amplify returns. However, this strategy also comes with a higher degree of risk. While a regulatory framework for margin trading exists in Nepal, its implementation has been far from successful.

The primary reason, as highlighted by brokers and market analysts, is the ambiguity in the current directive. The rules are not clear enough to be practically applied by many stockbrokers, leading to a reluctance to offer the service. This has left a significant opportunity untapped in the market, preventing both brokers from expanding their business and investors from accessing this form of leverage. By forming a dedicated committee to address these issues, SEBON is demonstrating a proactive approach to resolving a longstanding market obstacle.

The Committee: A Team of Experts

To ensure a comprehensive and well-rounded review, SEBON has assembled a four-member study committee. The committee is a blend of regulatory and operational expertise, bringing together key individuals from different divisions of the board. The team is coordinated by Rupesh KC, who heads SEBON’s Supervision Division, ensuring that the new guidelines will be practical and enforceable.

The other members of the committee are:

• Niranjaya Ghimire: Representing the Legal Division, Ghimire will ensure that any proposed amendments are legally sound and compliant with existing securities laws.
• Ambika Giri: From the Regulation Division, Giri’s expertise will be crucial in drafting clear and effective rules that govern margin trading activities.
• Anuj Kumar Rimal: As a member from the Broker Division, Rimal provides a vital link to the ground reality of stockbrokers, ensuring that the new directive is practical and addresses the concerns of the market’s frontline operators.

This diverse composition of the committee suggests a holistic approach to the problem, aiming to create a directive that is not only legally robust but also operationally feasible.

The Road Ahead: Expected Changes and Market Impact

According to SEBON spokesperson Niranjaya Ghimire, the committee has already started its work. The mandate is to recommend “timely amendments” to the existing margin trading directive. The goal is to create a more straightforward and enforceable framework that will encourage stockbrokers to begin offering margin trading facilities.

The expected changes are anticipated to have a profound impact on Nepal’s capital market:

• Enhanced Market Liquidity: By making it easier for investors to borrow funds, margin trading can increase the volume of transactions, thereby improving liquidity in the market.
• New Opportunities for Investors: The ability to leverage investments could open up new strategies for investors seeking to maximize their returns.
• Brokerage Business Expansion: A clear and effective directive will allow stockbrokers to expand their services, creating a new revenue stream and fostering a more competitive and dynamic brokerage landscape.
• Strengthening of Legal Infrastructure: This initiative will contribute to the ongoing development and maturity of Nepal’s securities market by creating a more robust and transparent regulatory environment.

The formation of this committee is a promising development for all market participants. While the final details of the updated directive are yet to be announced, the move itself is a strong indicator of SEBON’s commitment to modernizing and strengthening Nepal’s capital market. As the committee proceeds with its work, all eyes will be on the recommendations that could unlock new opportunities and lead to a more vibrant and efficient securities ecosystem.

For More: SEBON Margin Trading Guidelines