Master plan to modernize stock market on cards

In a bid to strengthen and modernize the sole capital market in the country, Securities Board of Nepal (SEBON) - the capital market regulator -- is preparing to formulate a five-year master plan with the financial and technical assistance from the World Bank (WB). SEBON took the step after a number of studies showed that the country´s capital market was lagging far behind most of the stock markets in the SAARC region due to lack of necessary infrastructures and autonomous regulatory mechanism.

Surbir Poudel, chairman of SEBON, told myrepublica.com that one of the objectives of the proposed master plan was aimed at making necessary amendments in existing laws related to capital market, thereby upgrading capacity of regulatory body and establishing necessary infrastructures in the capital market. "The five-year master plan will incorporate a number of programs with the vision of upgrading our capital market at least to the SAARC standard," Poudel told myrepublica.com on Tuesday. He said development of other institutions related to capital market such as Credit Rating Agency and modern securities trading system -- Central Depository System -- will also be included in the master plan.

Implementation of a full-fledged internet based securities trading, attracting foreign investments to domestic share market, and paving the way for setting up new stock markets have also been envisioned in the master plan.The World Bank a few months ago had agreed to provide a financial support of $152,500 to SEBON -- the stock market regulator -- for the master plan. "We will complete draft of the plan within the next six months as the WB has already selected consultancy for the purpose," he said. After getting Finance Ministry´s nod, SEBON had submitted the proposal for formulating master plan to the WB last year. Poudel informed that SEBON would plan short-term, medium-term and long-term programs to modernize the capital market as per the master plan which will be a blend of the best of international practices and local context. "We will incorporate the short-term plan under our annual programs, while the medium-term and long-term plan will be implemented as per the target of the master plan," he added.