Responding to the market's sluggish performance since the formation of the new government, PM Shah demanded immediate solutions to the technical and policy bottlenecks currently crippling the Nepal Stock Exchange (NEPSE).

During the briefing, stakeholders presented a comprehensive action plan targeting reforms across the Securities Board of Nepal (SEBON), Nepal Rastra Bank (NRB), and the Ministry of Finance.

Key Demands and Regulatory Overhauls

Market representatives argued that outdated and impractical regulations have severely constrained market liquidity. The core proposals submitted to the Prime Minister include:

• Introduction of Modern Trading Tools: Immediate implementation of Intra-Day trading and Short Selling to boost transaction volumes and market liquidity.

• Enhanced Price Discovery: To prevent artificial scarcity when new companies list, stakeholders proposed that at least 20% of shares allocated to employees, local residents, and small promoters be eligible for trading on the very first day of listing.

• Monetary Policy Adjustments: Brokers and investors urged NRB to scrap the rule prohibiting banks and financial institutions (BFIs) from selling shares within six months of investment. Additionally, they requested wholesale lending facilities for brokers to streamline margin lending for retail investors.

• Taxation Clarity: Stakeholders called on the Ministry of Finance to fix ambiguities in Capital Gains Tax (CGT) calculations, pushing for a system that adjusts gains against losses rather than taxing profits in isolation. Clear tax frameworks for upcoming intra-day and short-selling mechanisms were also demanded.

Prime Minister’s Directives and Deadlines

After assessing the grievances, Prime Minister Shah questioned regulatory heads on the prolonged delay in deploying modern trading instruments. Setting a strict timeline for execution, the PM issued the following directives:

"The regulatory bodies must immediately untangle the policy knots and resolve technical hitches holding back the market's modernization."

• SEBON & NRB Action: Directed both institutions to fast-track technical integration for short selling and intra-day trading.

• NEPSE Privatization: Ordered the government to expedite the restructuring and privatization of NEPSE, emphasizing the need to bring in foreign strategic partners to transition the state-owned exchange into a professional entity.

• Institutional Capital Inflow: Directed the Finance Ministry to mandate that the Employees' Provident Fund (EPF), Citizen Investment Trust (CIT), and insurance companies allocate at least 5% of their total funds into the stock market.

• NRN Entry: Called for the immediate formulation of regulations to formally allow Non-Resident Nepalis (NRNs) into the secondary market.

Today's high-level intervention has injected a wave of optimism among investors. Broker representatives described the meeting as highly productive, noting that the government finally appears to recognize the stock market as a critical backbone of the national economy. Concrete policy announcements from SEBON, NRB, and the Finance Ministry are anticipated in the coming days.