In a significant move aimed at strengthening the capital base of Nepal’s securities market, the government has granted approval for brokerage companies to issue Initial Public Offerings (IPOs). This decision comes following the endorsement of the sixth amendment to the Securities Businessperson (Securities Broker and Securities Dealer) Regulations, 2007 by the Ministry of Finance (MoF), enabling the Securities Board of Nepal (SEBON) to implement the provision.
According to the new regulation, brokerage firms with a paid-up capital exceeding Rs 1 billion will be permitted to float primary shares to the public, subject to SEBON’s final approval. This reform is expected to enhance the financial strength and market participation of brokerage companies.
The MoF has also extended the deadline by nine months for brokerages that have yet to meet the revised capital requirements. All brokerage firms are now required to increase their paid-up capital to at least Rs 200 million by mid-April 2026. This extension provides more time for companies struggling to meet the threshold to secure additional capital.
As per SEBON’s latest update, 28 out of the 50 previously licensed brokerage companies have already met the revised capital criteria, while 22 still fall short of the mandatory requirement.
In another progressive step, the ministry has also permitted brokerage firms to engage in margin trading. This provision allows brokers to lend money to clients for the purchase of securities, thereby enabling more robust trading activity through margin accounts.
These regulatory reforms aim to modernize Nepal’s capital market infrastructure, improve investor access, and ensure greater financial resilience among brokerage firms.
