Securities Board Drafts Margin Lending Rules for Stock Market
Summary
Nepal Securities Board has drafted new rules to regulate margin lending in the stock market, bringing loan-based share trading under a legal framework. The proposal sets margin requirements, risk checks, reporting duties, and penalties to protect investors and improve market stability.
Key Points
- Nepal Securities Board has published the Margin Lending Transaction Rules, 2083 for public suggestions.
- The draft requires prior Board approval for brokers and other eligible institutions that want to offer margin lending.
- It defines initial margin, maintenance margin, margin calls, and allows lenders to sell pledged shares if borrowers fail to meet margin requirements.
- The rules also require risk assessments, daily mark-to-market evaluation, and regular reporting to the Board.
