Nepal Securities Board (SEBON) announced plans to introduce modern financial instruments like REITs, InvITs, Exchange Traded Funds (ETFs), and Commodity Exchange, moving beyond traditional stock trading in its capital market policy for the fiscal year 2083/84.
According to the new policy, SEBON plans to develop legal and institutional frameworks for Real Estate Investment Trusts (REITs) to support the real estate sector. Simultaneously, Infrastructure Investment Trusts (InvITs) will be developed to facilitate investments in major infrastructure projects across the country.
The board believes that these new trusts will create an environment where small investors can also invest in large real estate and infrastructure projects, even with less capital. The main goals are to professionally manage these assets, ensure regular returns are distributed to investors, and promoting good governance in the real estate sector. Furthermore, the policy will prepare the necessary legal frameworks for tax incentives and asset monetization related to the operation of REITs and InvITs.
SEBON is also committed to promoting Exchange Traded Funds (ETFs) and index-based investments. As part of this, studies and facilitation will done for the operation of ETFs based on the NEPSE index, banking sector, hydropower sector, and debentures. The policy highlights plans to develop systems that allow investors to make diversified investments based on various indices, rather than just focusing on a single company.
Moreover, the development of a Commodity Exchange is a priority to ensure organized and transparent trading of agricultural, energy, and metal-based commodities. SEBON stated its intention to develop technology-based trading systems to make the price discovery process much more transparent.
Under this policy, an Electronic Warehouse Receipt System will be developed. This system will make it easier to take loans and conduct trading activities based on stored goods. Additionally, the necessary foundation for a Hedging system will be prepared. This is to protect producers from unexpected price fluctuations in agricultural products and other commodities.
SEBON also mentioned that it will prepare a consultation paper. This paper will follow a detailed feasibility study for conducting contracts-based trading involving agricultural produce and metal-based commodities.
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.
