The Securities Board of Nepal (SEBON) has made public a draft institutional investor policy that proposes allowing institutional investors to invest up to 30 percent in securities, seeking to increase institutional participation in Nepal’s stock market and reduce its reliance on individual investors. The proposal follows the capital market strengthening and revival action plan announced on Bhadra 29 by Finance Minister Dr. Swarnim Wagle. SEBON is inviting constructive feedback from stakeholders as it considers the draft.
A proposal to widen the investor base
The draft is focused on encouraging a greater role for institutional investors in the stock market. SEBON’s stated aim is to increase institutional investment while reducing the market’s dependence on individuals. The proposal therefore places institutional participation at the centre of its approach to strengthening the capital market.
Under the draft, institutional investors would be allowed to invest up to 30 percent in securities. The proposal has been made public as part of a draft policy, rather than announced as an already implemented rule. The summary of the draft does not specify additional conditions or explain how the proposed limit would be applied, so those details remain matters for the policy process.
The proposal sets out two linked goals: bringing more institutional investment into the market and reducing reliance on individual investors. SEBON has sought stakeholder feedback on the draft, providing an opportunity for those with views on the proposal to offer constructive input before the policy is finalised.
Linked to the capital market action plan
The draft follows the capital market strengthening and revival action plan announced on Bhadra 29 by Finance Minister Dr. Swarnim Wagle. That plan provides the context for SEBON’s move to put forward an institutional investor policy. The draft signals a policy focus on the role institutional investors could play in the stock market, while its final provisions will depend on the policy process.
The announcement does not, on the information available, set out a timeline for completing the policy or identify when any proposed provision could take effect. Nor does the summary detail which institutions would qualify, how the 30 percent figure would be calculated or whether it would apply across particular types of securities. These points should not be treated as settled terms based only on the draft proposal described so far.
Stakeholder feedback sought
SEBON has asked stakeholders to provide constructive feedback on the proposal. The request makes the draft a point of discussion for those with an interest in the capital market, including the proposed level of institutional investment and the broader objective of reducing dependence on individual investors. The board has not, in the information provided, specified a feedback deadline or described a separate consultation timetable.
For now, the key elements made public are the policy’s stated purpose, its connection to the Bhadra 29 action plan and the proposed 30 percent investment allowance. The draft remains a proposal, and stakeholder input may inform its development. Any final policy details, including implementation arrangements, have not been specified in the available information.
SEBON’s initiative places institutional investment on the agenda as part of efforts to strengthen and revive Nepal’s capital market. Whether the proposal is adopted in its current form will depend on the policy process and the feedback received from stakeholders. Until a final policy is set out, the proposed investment allowance should be understood as a feature of the draft, not as a confirmed change in the rules.
