Capital Market Reform: Board's Three-Phase Strategy, Overhaul from Brokers to NEPSE

The Securities Board of Nepal has launched a three-phase reform strategy covering both the primary and secondary markets for the overall development of the capital market. Board Chairman Dr. Gopal Prasad Bhatta, speaking at a parliamentary committee meeting, stated that reforms would be advanced with the participation of market stakeholders, prioritizing policy reform, infrastructure development, and institutional strengthening.

The Board has formed separate committees for primary and secondary market reforms. The committees include representatives from NEPSE, CDS and Clearing, the Federation of Nepalese Chambers of Commerce and Industry, and the Merchant Bankers Association. The reform process will involve preparing a concept paper, discussing it in the committee, seeking public consultation, and then implementing the policy.

On the primary market side, policies related to IPO issuance, price discovery, qualified institutional investors, and the share allotment system have already been prepared and will be implemented gradually, according to the Board.

On the secondary market side, priority has been given to the restructuring of broker institutions. The policy aims to elevate brokers from the limited structure of family businesses and develop them on an 'industrial' model. There is a plan to divide brokers into four categories based on performance and service, and to move them toward a broader structure that includes stock dealership.

Similarly, improving the technical capacity, order management, and cybersecurity of the Nepal Stock Exchange (NEPSE) has also been prioritized. Chairman Bhatta stated that approximately 31–32 new regulations have been prepared for NEPSE and will be issued soon.