High-Level Economic Reform Commission Submits Stock Market Reform Report to Finance Minister
Author
NEPSE trading
The High-Level Economic Reform Suggestion Commission submitted its final report to Finance Minister Bishnu Poudel on Friday. Formed with a mandate from the government, the commission began its study in the second week of Kartik 2081 and has now submitted a comprehensive set of recommendations focusing on the development and reform of Nepal’s stock and capital markets.
The commission, led by former Finance Secretary Rameshore Khanal, has proposed over a dozen key reforms aimed at enhancing regulation, boosting investor confidence, and modernizing the financial infrastructure of the capital market.
Incorporation into National Policy
Earlier, these recommendations were submitted as a roadmap to improve the stock market. That is why the government’s policy and program presented today includes clear measures directly addressing stock market reform, aligning closely with the commission’s suggestions.
Some of the major recommendations included in the report are:
Capital Market Awareness: Raise public awareness to mobilize financial resources through the capital market and promote investment.
Secondary Market for Government Bonds: Launch immediate secondary market trading for government bonds.
Non-Resident Nepali (NRN) Participation: Amend the Foreign Investment and Technology Transfer Act, 2075, to allow NRNs to trade in the secondary market using their NRN ID. Allow up to 50% repatriation of their investment twice a year.
Securities Board Structure Reform: Amend the Securities Act, 2063, to restructure SEBON by replacing representatives from CAAN, FNCCI, and the Law Ministry with two market experts.
Margin Lending: Enable margin lending through securities dealers.
Strengthening SEBON: Ensure adequate staffing and autonomy at SEBON for effective supervision and regulation as the market expands.
Hydropower IPO Rule: Allow hydropower companies to issue IPOs only after starting power generation.
Privatization of Public Enterprises: Convert public enterprises into public limited companies and sell shares to the private sector; raise capital by issuing bonds instead of taking government loans.
Transaction Fee Reduction: Reduce fees on large-volume share transactions.
Restructure NEPSE: Increase NEPSE’s capital and allow private sector equity participation. Similarly, restructure CDS & Clearing Ltd. to involve other institutions and strengthen depository services.
Commodity Exchange Market: Introduce a Public Warehousing Act to facilitate the operation of a commodity exchange market.
Ease for Private Sector: Simplify processes and reduce the cost for productive companies to raise capital through equity or bond issuance.
Transparent Premium and Book Building: Ensure transparency in share pricing through the premium and book-building methods, and raise public awareness about them.
These detailed reform proposals reflect a broader government initiative to revitalize Nepal's financial markets and align them with international best practices. The inclusion of these recommendations in the government’s new policies and programs signals strong political will toward long-term capital market development.
