On September 29, 2026, the Securities Board of Nepal published the “Securities Brokerage Business Strengthening Policy, 2083”, the most comprehensive rewrite of brokerage regulation the Nepali market has seen. The document, posted to SEBON’s official website, sorts every securities broker into one of four classes, ties the range of services each class may offer to its capital and capability, and puts margin lending, short selling, intraday trading and market making behind separate activity approvals. It is, in plain terms, the end of the era when every broker was the same kind of broker.
The policy flows directly from the Finance Ministry’s Capital Market Strengthening and Revival Action Plan, 2083, issued on Bhadra 29, which ordered the immediate publication of a policy for the institutional reform and strengthening of securities brokerage businesses. SEBON delivered within the month. The document names its own motive bluntly: today’s brokerages are small, offer limited services and run on person-centered management, while the market needs well-capitalized, professionally managed, technology-capable intermediaries.
The four classes, and who gets to do what
Section 5.1.2 of the policy is the heart of it. Brokers will be classified by paid-up capital, service diversification, risk-bearing capacity and institutional capability into Class A (Stock Dealer), Class B (Full-Service Stockbroker), Class C (Trading Stockbroker) and Class D (Specialized Stockbroker). Class A may do everything: brokerage, margin lending, market making, proprietary trading, investment advisory, research, portfolio management, underwriting, intraday trading, securities lending and borrowing, and short selling. Class B covers standard brokerage plus advisory and non-dealer investment services. Class C is execution-focused, essentially client order execution and basic settlement. Class D is reserved for niche businesses: debt stockbroking, institutional stockbroking and specialized market making.
Two details sharpen the edges. First, Class C brokers may not touch high-risk financial activities without additional authorization, which quarantines the risk where it belongs. Second, brokers in Classes B and C that meet higher capital, technology, governance, staffing and risk-management standards can climb to a higher class, but persistent failure to meet a class’s requirements brings downgrade or suspension. The ladder works in both directions, which is the point.
Capital: the rule is clear, the figures are not
The policy replaces simple paid-up capital with risk-based capital adequacy. Minimum paid-up capital will differ by class (highest for A, medium for B, low for C, activity-based for D), but that is not enough on its own: brokers must continuously maintain Eligible Regulatory Capital at or above the Required Risk Capital, calculated across market, credit, counterparty, operational, liquidity, settlement and concentration risks. Regulatory capital is split into Tier-1 and Tier-2, and Tier-2 cannot substitute fully for Tier-1. If capital adequacy falls below the regulatory minimum, dividend distribution is banned, and SEBON may require a capital conservation buffer above the minimum.
Here is the honest gap. The policy sets the architecture, capital adequacy as Eligible Regulatory Capital divided by Risk-Based Capital Requirement, early-warning indicators, a mandatory capital restoration plan if thresholds are breached, regular stress testing and even reverse stress testing for Class A and high-risk brokers. But the actual minimum capital numbers per class, the calibration of risk weights and the transition deadline for existing brokers are all deferred to directives SEBON says it will issue later, including a dedicated Capital Adequacy Directive. So the most consequential question for every broker in the country, how much money must I have, remains unanswered by the document that asks it.
The high-risk activities get their own gate
Each high-risk activity, margin lending, securities lending and borrowing, covered short selling, market making, and by extension the intraday trading SEBON put out for consultation on September 24, will require separate activity-based authorization (Section 5.1.6). Authorization demands proof of the related capital, technology, human resources, risk management and operational capacity. Margin lending needs initial and maintenance margins, mark-to-market, a margin-call engine, a forced-liquidation engine and risk-based haircuts on collateral. Short selling demands borrowing confirmation, collateral and settlement management, short-sale order identification and short-squeeze risk controls. Algo and high-frequency trading will need prior SEBON approval, testing environments and an algorithm kill switch, with an emergency kill switch shared by SEBON, NEPSE and the broker.
This is where the policy connects to the reform track. The September 24 intraday concept paper and the margin-lending framework are products that need brokerages capable of running them; the policy is the institutional plumbing underneath. The three implementation phases make the sequencing explicit: phase one, immediate institutional strengthening (classification, capital adequacy, client-asset segregation, governance, technology and cybersecurity standards, broker consolidation, regulatory reporting, KYC and AML); phase two, market-service expansion (margin lending, SLB, short selling, intraday trading, market making, advanced digital brokerage); phase three, an integrated intermediary system (strategic investment, research and advisory, institutional services, advanced risk-based supervision).
What changes for the investor
The client-protection chapters are the part retail investors should read twice. Client money and securities must be fully segregated from the broker’s own assets in separate Client Fund and Client Securities Accounts; ownership of client assets stays with the client; the broker may not use them for its own obligations or a third party’s claims without explicit prior approval. Brokers must run best-execution and client-order-priority policies, ban unauthorized trading, disclose fees and risks, send daily or real-time account statements, and maintain an Investor Compensation Fund whose limit SEBON will set, protecting valid claims when a broker defaults. New applicants must file a three-year business plan; license renewal becomes a real assessment of financial condition, compliance record, complaints, operations, technology and cybersecurity rather than a paperwork exercise.
The policy also blesses voluntary mergers and acquisitions among brokers, with prior SEBON approval, and SEBON can impose an escalation ladder from warning to restriction to suspension to license revocation. Consolidation is clearly the intended direction: many small brokers become fewer, stronger ones.
What to watch now
Four open questions decide how much of this blueprint survives contact with the industry. First, the capital figures: the Capital Adequacy Directive and the licensing directive will name the minimum capital per class, and those numbers will sort winners from casualties. Second, the transition period: existing brokers get a gap-assessment window, but its length and strictness are not in the policy. Third, the activity authorizations: which brokers actually qualify for margin, intraday, SLB and short-selling approvals will determine whether those products launch with breadth or stay boutique. Fourth, enforcement: the policy hands SEBON risk scores, real-time dashboards, a conduct-risk scoring system and default-resolution architecture, but broker regulation in Nepal has a long history of rules written stricter than they are applied.
The official document is available on SEBON’s website at sebon.gov.np, uploaded September 29, 2026, under the title “धितोपत्र दलाल व्यवसाय सुदृढीकरण नीति, २०९३”. What SEBON published this week is genuinely the most detailed broker-reform blueprint Nepal has produced. Whether it becomes a stronger market or another handsome document depends on the directives that have not been written yet.
This article is research and education, not investment advice. Policy details are summarized from the official SEBON document “Securities Brokerage Business Strengthening Policy, 2083” published on sebon.gov.np on September 29, 2026; verify the final legal texts and subsequent directives before acting.