Himal Press 
KATHMANDU: In a major push to diversify the capital market, the Securities Board of Nepal (Sebon) is preparing to permit non-financial corporate entities to issue corporate bonds to raise long-term capital.
Sebon on Friday released the draft of the Securities Registration and Issuance Regulations, 2026, to collect feedback and suggestions from stakeholders.
The regulations aim to transform the domestic corporate bond market into a more organized, transparent, and competitive space. Currently, bond issuance in Nepal is almost exclusively dominated by banks and financial institutions. By broadening this scope, Sebon hopes to curb the over-reliance of corporate entities on traditional bank loans, promote market-based financing and unlock secure investment channels for the public.
As per the proposed regulations, corporate entities wishing to issue bonds must have a minimum paid-up capital of Rs 1 billion, maintain up-to-date audited financial records, conduct regular Annual General Meetings and obtain a formal credit rating. Additionally, it proposes capping a company’s debt-to-equity ratio at 70:30 to mitigate financial risk.
Under the new framework, companies can issue bonds through two distinct channels. The private placement method allows corporate entities to target up to 50 qualified institutional investors. Alternatively, companies can issue bonds directly to the general public through a public offering. However, it will require companies to get their prospectus approved by the Sebon and get a credit rating before going for a public issue.
The proposed regulations also align Nepal’s market with international practices and Environmental, Social, and Governance (ESG) standards. Organizations will be allowed to issue thematic instruments, including Green Bonds for environmental initiatives, Social Bonds and Sustainable Development Bonds. Likewise, it proposes permitting international financial institutions to issue bonds within Nepal and enabling eligible Nepalese firms to tap into foreign financial markets.
To protect investor interests, companies issuing corporate bonds will have to appoint an independent institution as Debenture Trustees. Debenture Trustees will be tasked with monitoring asset protection, tracking timely principal and interest payouts, and taking immediate action if a default or breach of contract occurs.
Likewise, Sebon plans to strengthen secondary market liquidity by establishing dedicated trading, clearing, and settlement infrastructure for corporate bonds.
