Currently, the Securities Act combines the regulator's role and market operations into a single, vague framework. To address this, Dr. Bhatta plans to mirror the dual-structure system used in the banking sector (the Nepal Rastra Bank Act and BAFIA):
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Securities Board of Nepal Act: Designed to strengthen SEBON's autonomy, regulatory authority, and internal management, positioning it as a dedicated, powerful regulatory body similar to Nepal Rastra Bank.
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Stock Market Management Act: Focused on regulating market participants—including stockbrokers, merchant bankers, mutual funds, and private equity/venture capital (PEVC) firms. This act will clearly define market instruments, transaction patterns, accountability, and impose stricter penalties for offenses like insider trading and market manipulation.
Key Takeaways
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Preliminary Drafting Underway: A dedicated drafting committee within SEBON’s Law Department has already begun work on the legislation.
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Inspiration from Global Benchmarks: The new laws will incorporate international best practices from India, China, Singapore, and the US.
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New Market Instruments: The acts will lay the legal groundwork for advanced trading mechanisms, including short selling, intra-day trading, and securities lending and borrowing (SLB).
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Immediate Reforms: Since passing legislation takes time, Dr. Bhatta noted SEBON will use its current authority to implement interim reforms via updated rules and guidelines at "bullet speed."
