Rastra Bank’s ‘Green Signal’ for the margin lending; Only 29 companies deemed ‘eligible’

Nepal Rastra Bank opens its gates for the margin transaction to be implemented. After the approval given by the Rastra Bank, NEPSE is all set to implement the highly waited margin trading.

NEPSE had been seeking approval from the Rastra Bank to start margin trading in the stock market after it had received the direction from the Securities Board of Nepal. The companies need to take prior approval from the Rastra Bank before involving in margin lending.

As per the information received, the letter of approval sent by Nepal Rastra Bank will be presented in the upcoming Board meeting of NEPSE. NEPSE has planned to implement the margin trading as per the directions given by the board and the standards maintained by the procedure related to margin trading.

As per the procedure, only 29 of the listed companies are eligible to be involved in the margin lending. Despite of being eligible, 23 companies will not be able to involve in the margin ending because of the delay in conducting Annual General Meeting (AGM).

The provision in the procedure stated that the listed companies with minimum 10,000 shareholders, positive net assets, distributing at least 10% dividend to its shareholders for the past 2 years, transaction of more than 80% in the secondary market in the last year and convening of AGM within 6 months of the expiry of previous fiscal year are eligible to participate in the margin lending.