While the Securities Board of Nepal (SEBON) has granted final approval to 49 out of 94 active broker companies to provide margin trading, only three firms—NASA Securities, Imperial Securities, and Dakshinkali Investment & Securities—have successfully operationalized the service. The remaining 46 approved brokers have yet to roll out the facility.
Investors attempting to access the loan-based share-buying facility report frequent roadblocks. According to market stakeholders, the majority of brokers cite technical bottlenecks, including integration issues between internal brokerage software and the Nepal Stock Exchange (NEPSE) system, alongside complications in streamlining loan flows.
Despite securing licenses on paper, the inability of over 90% of approved brokers to deliver the service has rendered the facility largely inaccessible to the general public.
Beyond broker-side technical constraints, sluggish market sentiment has severely limited investor demand. With the market experiencing a downturn, investors remain hesitant to take on leveraged risk.
Market analysts note that fear of margin calls—where investors are forced to inject additional funds or liquidate shares if stock prices drop further—has made borrowing from brokers an unappealing option under current market conditions. Furthermore, regulations mandate that funds borrowed via broker margin facilities must be exclusively utilized for purchasing securities, restricting financial flexibility.
SEBON views margin trading as a crucial stepping stone toward the modernization of Nepal's stock market. Regulatory authorities maintain that advanced trading mechanisms, including intraday trading, short selling, and securities lending, depend heavily on the successful implementation of the margin system.
To address ongoing operational challenges, SEBON has formed a seven-member committee tasked with driving policy and structural reforms based on the 'Concept Paper 2083', aimed at improving the efficiency of margin trading and increasing investor familiarity.
While regulatory bodies view the framework as a transformative milestone, industry observers warn that without swift resolution of technical hurdles and improved market confidence, the true objective of margin trading risks remaining unmet.
