The Securities Board of Nepal has shared a draft document regarding the implementation of intraday trading for the domestic capital market to gather feedback from stakeholders.
New Concept Paper for Intraday Trading
The Securities Board of Nepal (SEBON) is moving ahead with its plan to bring intraday trading to the local stock market. To make this happen, they have published a document titled ‘Concept Paper on Implementing Intraday Securities Trading in Nepal, 2083’. The main reason for this project is to boost market liquidity, make the price discovery process more effective, and develop better infrastructure for the capital market.
According to the draft, the board wants to introduce this system in phases instead of launching it fully at once. In the beginning, they plan to allow only certain stocks that have regular trading and enough liquidity. They are also choosing stocks that have less chance of market misuse for the trial phase.
Phased Approach to Trading
The board proposes to start with a ‘Buy First, Sell Later’ method where investors can purchase and sell the same stock on the same day. Later on, they will think about the ‘Sell First, Buy Later’ type of trading. This will only happen after the infrastructure for stock lending, borrowing, and covered short selling is fully ready.
To prepare for this, the board says they need to set clear rules for investors and brokers. They also need to fix systems for margin management, risk disclosure, and market monitoring. The plan will move forward through testing and pilot programs to see if it working properly.
Focus on Protecting Investors
The concept paper keeps investor protection and transparent market operations as the most important goals. Based on what they learn from the pilot stage, the board might increase the number of stocks allowed for intraday trading. This initiative is part of the ‘Capital Market Strengthening and Revitalization Action Plan, 2083’ which was released by the Ministry of Finance on 29 Bhadra 2083.
The board prepared this document after holding discussions with representatives from the Nepal Stock Exchange, CDS and Clearing, and the Stock Brokers Association of Nepal. Right now, they are asking everyone to share their feedback on the draft. They are also working to finalize the rules for margin lending in the same way.
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.
