Investor Chhotelal Rauniyar has submitted a 15-point reform proposal to the Securities Board of Nepal (SEBON), calling for changes aimed at increasing market participation, improving liquidity and making Nepal’s capital market more investor-friendly.

Rauniyar submitted the proposal to SEBON Chairman Dr. Gopal Prasad Bhatta on August 10, outlining what he considers immediate reforms needed to strengthen the capital market.

One of the key proposals is to allow banks and financial institutions to freely buy and sell shares in the secondary market. The proposal calls for the removal of the existing six-month lock-in requirement, arguing that the restriction limits institutional participation and constrains market activity.

Rauniyar has also called for a reduction in capital gains tax introduced through the current fiscal year’s budget. He has proposed reducing the 5% capital gains tax rate to 4%, while bringing the 7.5% rate down to 6.5%.

According to the proposal, lower capital gains tax would reduce the transaction costs faced by investors and encourage greater participation in the secondary market. Rauniyar argues that increased trading activity could ultimately generate higher government revenue despite the lower tax rates.

He estimates that the proposed tax reductions could help increase daily stock market turnover to Rs 15 billion–20 billion.

The broader 15-point proposal seeks reforms to improve the functioning of Nepal’s capital market, with greater institutional participation, lower transaction costs and stronger market activity at the centre of the recommendations.