Kathmandu: Prime Minister Balendra Sah has said that Nepal's capital market will play a vital role in driving the country's economic development and prosperity. He stated that the government's top priority is to promote entrepreneurship, attract investment and create employment opportunities through a stronger and more dynamic capital market.

Speaking during a discussion with capital market stakeholders and regulatory bodies at the Office of the Prime Minister and Council of Ministers on Sunday, the Prime Minister urged the private sector to move forward with confidence and high morale.

Zero Tolerance for Wrongdoing, Support for Genuine Businesses
Prime Minister Sah said the government is committed to encouraging honest entrepreneurs while maintaining a zero-tolerance policy against malpractice and irregularities.

He emphasized that businesses operating transparently and responsibly would receive policy support from the government.

Stakeholders Seek Comprehensive Market Reforms
Representatives of the capital market called for broad legal, policy, institutional and structural reforms to ensure the long-term development of Nepal's securities market.

Among their key recommendations were:
-Reforming the initial public offering (IPO) system.
-Maintaining a healthy balance between demand and supply in the secondary market.
-Creating an environment to increase average daily market turnover to Rs 30 billion.
-Facilitating bank financing for broker companies involved in margin trading.
-Removing the six-month restriction preventing banks and financial institutions from selling securities after investment.
-Revising share-backed lending rules by setting the limit at 5 percent of total lending instead of linking it to primary capital.
-Calls for Greater Institutional and NRN Participation

Stakeholders also urged the government to:
-Introduce tax adjustments for losses incurred from individual share transactions.
-Encourage institutional investors such as the Employees' Provident Fund, Citizens Investment Trust and Social Security Fund to invest more actively in the secondary market.
-Restructure the Nepal Stock Exchange (NEPSE) with strategic partners.
-Open the capital market to greater participation from Non-Resident Nepalis (NRNs).

Regulators Commit to Reform Agenda
Representatives from regulatory agencies assured participants that several reform initiatives are already underway.

Nepal Securities Board (SEBON) Chairman Gopal Bhatta said the board has begun implementing the Capital Market Policy 2083/84 and the Capital Market Roadmap 2083, incorporating recommendations received from stakeholders.

Meanwhile, NEPSE Chairman Amrit Lamsal pledged to accelerate the process of drafting and amending laws necessary for market reforms and said preparations are underway to develop an appropriate framework for restructuring the stock exchange.

Broad Participation in the Discussion
The meeting brought together senior representatives from Nepal's capital market, including officials from the Stock Brokers Association of Nepal, brokerage firms, insurance companies, investment institutions and individual investors, reflecting the government's efforts to engage the private sector in shaping future reforms aimed at strengthening Nepal's financial markets.