The process of issuing licenses for Nepal's new stock exchange, stalled since May 2023, is set to resume after the Council of Ministers, in a meeting on December 20, decided to proceed with the licensing process.

The government initially halted the process on May 9, 2023, citing the need for further study amid concerns about the licensing framework. To address these issues, the government had formed a three-member committee in January 2023 under the leadership of Chintamani Shiwakoti, a former Deputy Governor of Nepal Rastra Bank. The committee included chartered accountant Sujan Kumar Acharya and advocate Sijan Guragain.

The committee was tasked with evaluating the necessity of additional stock exchanges in Nepal's capital market. The committee submitted its findings to then-Prime Minister Pushpa Kamal Dahal on April 26, 2023. The report underscored the need to restructure and modernize the Nepal Stock Exchange (NEPSE) and recommended issuing a license for a new stock exchange.

The report called for technological advancements in NEPSE to make it more accessible to Nepali investors. While NEPSE introduced its online trading system in 2018, many users have reported persistent connectivity issues. In contrast, NEPSE asserts that its system functions seamlessly, enabling transactions domestically and internationally.

NEPSE remains the sole stock exchange in Nepal. Efforts to introduce an alternative began on September 18, 2022, when the Securities Board of Nepal (SEBON) opened applications for a new stock exchange with a 45-day deadline. However, delays ensued after the Supreme Court issued an interim order on October 21, 2022, pausing the application process. The court later dismissed the writ petition against the licensing process on March 20, 2023, enabling SEBON to reopen applications on April 13, 2023, for the remaining 10 days.

Three companies—Himalayan Stock Exchange, National Stock Exchange of Nepal, and Annapurna Stock Exchange Limited—submitted applications. However, allegations of political lobbying by the applicants to influence the appointment of SEBON's chairman caused further delays.

With the government now clearing the path, SEBON has prioritized the licensing process. According to a senior official, one of the three applicants will be awarded the license based on eligibility criteria.

The new stock exchange will require a paid-up capital of Rs 3 billion, with promoters holding 70% of the capital and the remaining 30% allocated to the public. Additionally, the exchange must issue 30% of its shares to the public within two years of commencing operations.