Manish Aryal, Chief Executive Officer of Citizens Securities, Sandip Dahal, Chief Executive Officer of NIMB Stock Market, Bhishma Upreti, Chief Executive Officer of Prabhu Stock Market, Nabin Bista, Chief Executive Officer of NMB Securities and Madan Timilsina of Nabil Stock Dealer held formal discussions with Ramu Poudel, Executive Director of Banking Regulation Department of NRB and other senior officials.
During the discussion, a proposal regarding necessary amendment in the integrated directive issued by NRB was presented for the effective implementation of margin trading service.
"The licensed institution may disburse loans or make other financial arrangements to a wholly-owned securities business subsidiary company of class 'A" permitted by the Securities Board of Nepal (SEBON) subject to the prevailing laws, prudential norms issued by the Nepal Rastra Bank and the competitive market price arm's length principle. The credit facility so provided shall be used only for margin transaction purposes subject to the "Margin Trading Facility Directive 2082" issued by the Securities Board of Nepal. Loans disbursed for this purpose may be counted as business loans in accordance with the directives of this bank. '
Along with this, the clear modality required for implementation has also been presented in detail. It has been reported that the Nepal Rastra Bank is positive towards this proposal.
This initiative is expected to mobilize more capital in the capital market, provide more liquidity to investors and contribute to the sustainable development of the overall stock market. In addition, the effective implementation of margin trading transactions is expected to add new energy to the market, expand investor access and increase the depth of transactions.
It is expected that the customers will be able to access margin trading facilities in an easy, secure and systematic manner through the securities dealers operating as subsidiaries of the bank. It will also accelerate the transition to digital and modern financial services.
Coordination and positive cooperation among the concerned bodies will bring margin trading service into full operation in the near future and make Nepal's capital market more strong, competitive and investment-friendly.
