The Nepal Securities Board (SEBON) has unveiled its capital market policy for the fiscal year 2083/84, with a key objective to enhance the activity of large institutional investors such as the Employees’ Provident Fund (EPF), Social Security Fund (SSF), and Citizens’ Investment Trust (CIT) in the capital market.
SEBON’s recent capital market policy for the fiscal year 2083/84 aims to make big institutional investors like the Employees’ Provident Fund (EPF), Social Security Fund (SSF), and Citizens’ Investment Trust (CIT) more active in the capital market. The Board hopes to achieve long-term market stability and strengthen the demand for securities by increasing the involvement of these organizations.
Currently, Nepal’s capital market relies too much on individual (retail) investors. This dependence often lead to a lot of ups and downs in the market and encourages short-term speculative trading. While EPF, CIT, and SSF do invest in the market, SEBON feels their overall contribution to total trading volume and long-term investments is still quite limited.
Expanding the Role of Institutional Investors
SEBON highlighted that in developed capital markets, institutional investors play a vital role in keeping prices stable and ensuring good market liquidity. The Board plans to create a similar environment here in Nepal.
To make this happen, necessary policy and regulatory support will be provided to CIT, EPF, and SSF to become more active and responsible participants in the capital market. The new policy will encourage them to not just invest in ordinary shares, but also expand their investments into other tools. This includes corporate bonds, government bonds, Index Funds, and Exchange Traded Funds (ETFs).
Focus on Research and Best Practices
The policy also states that these institutions’ investment decisions will be based on proper research and careful risk analysis. SEBON also mentioned that their portfolio management will be developed according to the best international practices.
Empowering institutional investors has also been given high priority in SEBON’s Action Matrix. This action plan includes provisions to expand the role of institutional investors to strengthen the capital market’s demand side.
AI Disclaimer: This article was originally published on https://bajarkochirfar.com. It has been translated with the help of AI. For the best understanding and accurate facts, we recommend reading the original Nepali version.
