Kathmandu, September 24: Nepal’s stock market could soon see investors buying and selling shares within the same trading day, as the Securities Board of Nepal (SEBON) has moved forward with a phased plan to introduce intraday trading.
SEBON has published a concept paper on the implementation of intraday trading and invited suggestions from market participants and other stakeholders. The proposal marks a shift from the existing system, under which investors cannot routinely buy and sell the same security on the same day.
Under the proposed first phase, investors would be allowed to buy shares first and sell them later on the same trading day. SEBON has not proposed allowing investors to sell shares first and purchase them later at this stage.
The regulator has linked the introduction of intraday trading to its broader objectives of increasing market liquidity, improving price discovery and modernising Nepal’s capital market infrastructure.
However, the facility would not initially be available for every listed company. SEBON has proposed selecting securities based on factors such as trading frequency, liquidity and the potential risk of market manipulation.
The regulator also plans to establish eligibility requirements for investors and brokers, along with rules covering margin requirements, risk management, investor disclosure, market surveillance and technology infrastructure.
The proposed framework leaves room for a gradual expansion. SEBON has suggested testing and pilot programmes before extending intraday trading more broadly, depending on market performance and risk assessments.
The “sell first, buy later” model, which would effectively require systems for securities lending and borrowing and covered short selling, would be considered only after the necessary infrastructure is developed.
The proposal comes as part of efforts to strengthen Nepal’s capital market. SEBON said the concept paper was prepared through discussions involving SEBON, Nepal Stock Exchange, CDS and Clearing Limited and the Stock Brokers Association of Nepal. It is also linked to the government’s Capital Market Strengthening and Revival Action Plan, 2083, issued on September 14.
SEBON has now sought stakeholder feedback before moving ahead with the proposed framework.
