SEBON forms 4-member team to study margin trading

Nepal’s stock market regulator, the Securities Board of Nepal (SEBON), has taken a new step toward improving margin trading in the country. It has formed a four-member committee to study and prepare a report on margin trading practices.

The study team is led by Acting Executive Director Rupesh KC. Other members include:

• Niranjaya Ghimire from the legal department
• Ambika Giri from the regulation department
• Anuj Kumar Rimal from the supervision section

SEBON spokesperson Niranjaya Ghimire shared that the team will study the current situation and recommend updates to margin trading guidelines.

The board had earlier expanded the scope for brokers by bringing in the Securities Businessperson Regulation 2082. This allowed all brokers with a minimum capital of Rs 20 crore to offer margin trading services.

However, there’s a gap. While brokers are eligible, the actual procedures (called marginal trading guidelines) haven’t been updated. This has left brokers in a fix ready to offer the service but unable to proceed due to regulatory delays.

The previous margin trading guidelines were made back in 2075 BS. But according to Sagar Dhakal, President of the Stock Brokers Association of Nepal, those rules need changes to reflect the current market environment.

Because the revised guidelines are still pending, even large stock dealers like Nabil Stock Dealer and NLIC (Nagarik) Stock Dealer haven’t been able to provide margin lending despite having the necessary internal resources.

The committee’s report is expected to help finalize a new, updated margin trading directive. This could unlock margin trading services for investors, making the capital market more active and efficient.