SEBON to Introduce Short Selling in Nepal’s Capital Market Soon: Chairman Bhatt

The Securities Board of Nepal (SEBON) is preparing to introduce a short selling mechanism in Nepal’s capital market, according to SEBON Chairman Dr. Gopal Prasad Bhatt. Speaking at a meeting of the Parliamentary Finance Committee on Wednesday, Bhatt said the new system would enable investors to earn returns in both rising and falling markets, reducing the long-held belief that the stock market must always move upward for investors to benefit. Explaining the mechanism, Bhatt said investors who expect share prices to decline will be able to borrow shares, sell them at the current market price, and later repurchase them at a lower price to return to the lender, earning a profit from the price difference. Those expecting prices to rise will continue to follow the existing buy-and-hold strategy. He argued that the introduction of short selling would encourage investment decisions based on research and analysis rather than market sentiment and help reduce pressure on the regulator whenever the market falls. Bhatt also stressed that SEBON’s role is not to determine the direction of the stock market but to ensure a fair, transparent, and well-regulated trading environment. He noted that the regulator is also working on policy measures to curb market rumors and strengthen coordination with relevant government agencies on issues such as asset investigations, inspections, and financial crime control. He added that SEBON has recently unveiled the Capital Market Development Roadmap 2083 and the Capital Market Policy for FY 2083/84 as part of its broader strategy to modernize Nepal’s capital market.