KATHMANDU, March 27: Nepal Stock Exchange (NEPSE) has enforced the working procedure related to margin trading providing a clear guideline to stock brokers to implement the facility to their clients.
Approving the working procedure on Thursday, the front line regulator has paved the way to eligible brokerage companies to provide credit facilities to the investors. Earlier, the Securities Board of Nepal (SEBON) in this regard had issued the Margin Trading Facility Directive 2026 on February 10. Although it was supposed to come online on February 13, lack of clarity over the issues has been making stockbrokers reluctant to enact the regulator’s plan.
As per the procedure, brokers may extend margin facilities only for companies that have at least 2.5 million units of public shares listed, maintain net worth equal to or greater than their paid-up capital, have recorded net profits in at least two of the last three fiscal years, and have been listed for at least two years after their initial public offering.
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Similarly, only stock brokers with a paid-up capital of at least Rs 200 million will be allowed to provide margin trading facilities. Brokers can provide margin facilities up to five times their certified net worth, but a single client can only be given a maximum of 10 percent of the total margin facilities.
Investors are required to open a separate account for margin trading. If the investor does not fulfill the amount borrowed or the obligation, the broker can liquidate the amount by selling the relevant shares.
NEPSE Spokesperson Murahari Parajuli said the stockbrokers have agreed to implement the margin trading facilities by devising their own working procedures. “For this purpose, concerned stockbrokers will have to integrate the facility into their trading management portal and their internal system,” Parajuli added.
Nepal currently has 90 brokerage companies. Of them, 60 have met the mandatory paid-up capital requirement of Rs 200 million and will be eligible to offer margin trading services.
The remaining 30 firms will not qualify unless they meet the capital threshold. SEBON has directed brokers to comply with minimum working capital requirements by mid-April this year.
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