Kathmandu. The Securities Board of Nepal (SEBON) has formed a seven-member committee to develop and operate new financial instruments.

The board has formed the committee with the objective of developing legal, technical and institutional infrastructures required to expand the trading of various types of financial instruments by reducing the dependence on share trading in the capital market.

The other members of the committee include Director-level representatives from Nepal Rastra Bank, Nepal Stock Exchange (NEPSE) and Merchant Bankers’ Association of Nepal.

The Board expects that the development and operation of new financial instruments will help make Nepal’s capital market multi-dimensional rather than limited to share trading. This is expected to provide more investment options to investors as well as support long-term capital mobilization and market expansion.

The committee has been given the responsibility to study and implement financial instruments such as corporate bonds, government bonds, municipal bonds, green bonds, infrastructure bonds, exchange traded funds (ETFs), real estate investment trust (REITs), infrastructure investment trust (InvIT) and other financial instruments in the securities market of Nepal.

Similarly, the possibility of starting the trading of derivative financial instruments in a phased manner has also been kept in the scope of the committee. Under this, the market structure and infrastructure required for the development and operation of instruments such as commodity futures and currency derivatives will be studied.

The ‘Nepal’s Capital Market Development Guide, 2083’ released by the board also prioritizes market depth and diversification. According to the roadmap, a plan has been put forward to develop the corporate bond market, green bond, municipal bond, ETF, REIT, investment and derivatives market in a phased manner.

The first meeting of the committee was held today. The meeting has taken forward the work related to the concept of new financial instruments, necessary legal provisions, market structure and technical preparations.