KATHMANDU, Feb 12: The Securities Board of Nepal (SEBON) has allowed brokerage companies with a minimum paid-up capital of Rs 200 million to provide margin trading facilities to investors.
Issuing the Margin Trading Facility Directive 2026, SEBON introduced provisions governing loans against shares. Eligible brokerage firms must maintain a minimum 20 percent margin while providing such loans, based on secondary market performance and associated risks.
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Nepal currently has 90 brokerage companies. Of them, 60 have met the mandatory paid-up capital requirement of Rs 200 million and will be eligible to offer margin trading services, which are set to come into effect from Friday. The remaining 30 firms will not qualify unless they meet the capital threshold. SEBON has directed brokers to comply with minimum working capital requirements by mid-April this year.
Under the new directive, brokers must value collateral shares on a market-to-market basis. However, they cannot increase the sanctioned loan amount solely due to a rise in the market value of the pledged shares.
The directive also sets eligibility criteria for shares that qualify for margin trading. Brokers may extend margin facilities only for companies that have at least 2.5 million units of public shares listed, maintain net worth equal to or greater than their paid-up capital, have recorded net profits in at least two of the last three fiscal years, and have been listed for at least two years after their initial public offering.
Eligible brokers can provide margin loans up to five times their certified net worth. In the case of clients from the same family, margin exposure is capped at 10 percent of the total margin amount issued by the brokerage firm.
