SEBON Unveils New Margin Lending Rules, Set to Transform Brokers into More Regulated Financial Institutions
The Securities Board of Nepal (SEBON) has unveiled the draft of the Margin Loan Transaction Regulations, 2083, seeking to make margin trading more secure, transparent, institutionalized, and risk-based. The proposed framework introduces stricter capital, risk management, technology, investor protection, and reporting requirements for margin lending providers.
The Securities Board of Nepal (SEBON) has unveiled the draft Margin Loan Transaction Regulations, 2083, aiming to transform margin trading into a more secure, transparent, and institutionalized financial service. The proposed rules introduce risk-based haircuts of 20%, 30%, and 40% for different categories of securities, along with mandatory Chief Risk Officers, compliance officers, real-time margin monitoring systems, disaster recovery facilities, and stronger reporting mechanisms. The framework also proposes capital adequacy requirements, investor suitability assessments, risk disclosures, whistleblower protection, and clearer procedures for margin calls and forced share sales. The rules could increase compliance costs for brokers but are expected to strengthen investor protection, improve risk management, and support greater liquidity in Nepal’s capital market.