Nepal Stock Exchange Revises Stock Dealer Rules, Expands Investment Scope and Simplifies Procedures

The Nepal Stock Exchange (NEPSE) has introduced significant amendments to its stock dealer regulations to make the capital market more dynamic, organized, and liquid. Through the first amendment to the “Securities Dealer (Stock Dealer) Operation Procedure, 2020,” NEPSE has expanded the investment scope of stock dealers, allowing them to trade not only in equities but also in government bonds, mutual funds, and debentures. The previous requirement that limited investment only to companies with three consecutive years of profit has been removed, enabling dealers to invest in emerging companies with growth potential. Although the earlier rule requiring trading on at least 80% of trading days has been scrapped, dealers can now only invest in companies that have been listed for at least six months. Additionally, the minimum paid-up capital threshold has been increased from NPR 200 million to NPR 250 million, and the daily net trading limit has been set at up to 60% of a dealer’s net worth. Procedural simplification has also been introduced, allowing dealers to operate by merely informing NEPSE of their trading list instead of seeking prior approval. According to NEPSE CEO Chudamani Chapagain, the reforms aim to enhance market liquidity and strengthen the role of stock dealers in risk management.