The board of directors of NEPSE in its Wednesday evening meeting approved the “Margin Trading Regulations, 2082.” The finalized regulations were published on NEPSE’s website on Thursday, officially opening the route for margin trading in Nepal’s securities market.
The regulations, drafted in line with the Securities Board of Nepal’s margin trading directives, clarify that not all listed companies will be eligible for margin trading. The eligibility criteria for companies include a minimum of 2.5 million shares issued to the public and listed on NEPSE, a net worth exceeding paid-up capital, profitability in at least two of the last three financial years, and at least two years since public issuance and listing. NEPSE will update and publish the list of eligible companies within seven months after the end of each financial year.
Under the regulations, investors must maintain a minimum initial margin of 30% of the purchase amount and a maintenance margin of at least 20% depending on market conditions. If a share’s price falls below the maintenance margin, the broker is required to issue a margin call to the investor.
Broker companies providing margin facilities can lend up to five times their net worth, but no single client may receive margin exceeding 5% of the broker’s certified net worth. To offer margin trading, a broker must have a minimum paid-up capital of NPR 20 crore, hold membership with RAFFSAB, and be an active deposit member.
These regulations are expected to formalize and standardize margin trading practices in Nepal while safeguarding investor interests.
This article was originally published on https://bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
