SEBON Chairman Dr. Bhatt Calls Central Counterparty Essential as Regulator Moves Toward Stronger Market Oversight
SEBON Chairman Dr. Gopal Prasad Bhatt told the House Finance Committee that a Central Counterparty (CCP) is now essential for settling secondary-market share and derivative trades. He outlined a risk- and governance-based regulatory strategy, including stricter supervision of high-risk areas and limits on capital raising by poorly governed firms.
Securities Board of Nepal (SEBON) Chairman Dr. Gopal Prasad Bhatt said the regulator has adopted a new risk- and governance-based regulatory strategy aimed at making the capital market safer and more organized.
Speaking today at 8:30 am before the House of Representatives' Finance Committee, Bhatt said SEBON is pursuing institutional and system-level reforms to modernize the capital market. He added that a Central Counterparty (CCP) has become necessary to ensure the settlement of share and derivative transactions in the secondary market.
According to Bhatt, a separate CCP could be established under the Nepal Stock Exchange (NEPSE), or the Central Depository and Settlement Company (CDSC) could be assigned the responsibility after its infrastructure and capacity are strengthened. He said SEBON is currently studying and preparing to develop CDSC's capacity for this purpose.
Bhatt said the board is also introducing policy reforms based on four key principles to support the stability of the economy and the capital market. Under its risk-based supervision approach, areas carrying higher risks will face stricter regulation and supervision in line with international practices.
He further said only companies with strong governance should be allowed to raise funds from the capital market, as they mobilize public money. Referring to Karnali Development Bank, Bhatt said SEBON is coordinating with Nepal Rastra Bank to ensure that risks faced by depositors are not transferred to shareholders.