Plans for Capital Market Reforms Included in Budget but Face Implementation Challenges

Every year, several issues related to the capital market are included in the budget, but they have yet to be implemented. On Tuesday, May 28th, the budget for the upcoming fiscal year 2081/082 will be announced, and it's likely that these issues will be included once again.

One key issue is bringing Non-Resident Nepalis (NRNs) into the capital market. This topic has been included in the budget for years, but it has not been implemented. Similarly, the plan to establish a commodity exchange market has been given priority in the budget, but it has not yet materialized.

The Securities Board of Nepal (SEBON) has twice called for applications for the commodity exchange license. Although some applications were received, the process has not progressed. The idea of making the stock exchange competitive has also been prioritized in the budget for a long time. Although applications for new stock exchange licenses were opened, the government eventually halted the process.

Investors have stated that merely including these issues in the budget is not enough; they must be implemented promptly.

The Securities Board of Nepal, the Nepal Stock Exchange (NEPSE), and CDS and Clearing Limited have provided various suggestions for the upcoming budget. These include restructuring NEPSE and CDSC, improving capital gains tax, and requesting new office buildings.

It remains to be seen how many of these suggestions will be included in the budget and, more importantly, how many will be implemented. However, there is hope that this year’s budget will bring positive changes to the capital market.