The Supreme Court has paved the way for the government to issue licenses for a new stock exchange. A constitutional bench of the Supreme Court dismissed a writ petition seeking to halt the distribution of licenses for the new stock exchange in its very first hearing. Krishna Bahadur Thapa had filed the writ petition on January 7, demanding a halt to the license issuance. Previously, hearings on Thapa’s writ were scheduled for January 22 and March 5, but they were postponed due to time constraints.

On Wednesday, March 26, the constitutional bench, comprising Chief Justice Prakashman Singh Raut and Justices Sapana Pradhan Malla, Kumar Regmi, Hari Prasad Phuyal, and Manoj Kumar Sharma, dismissed the writ.

Thapa had filed the petition against the Securities Board of Nepal, the Office of the Prime Minister and Council of Ministers, and the Ministry of Finance regarding the license issuance for the new stock exchange. The application process for the new stock exchange license, initiated on September 18, 2022, has already received submissions. Three companies—Himalayan Stock Exchange, National Stock Exchange of Nepal, and Annapurna Stock Exchange Limited—have applied for license. One eligible company among them will receive the license. The new stock exchange is required to have a paid-up capital of Rs 3 billion, with 70% ownership held by promoters and 30% by the general public. Additionally, the new stock exchange must issue 30% of its shares to the public within two years of operation.

Currently, Nepal’s stock market is operated solely by the government-owned Nepal Stock Exchange (NEPSE). The licensing process for a private-sector stock exchange had reached its final stage under the regulatory body’s supervision but was halted by government directives. On May 8, 2024, the Cabinet decided to temporarily suspend the licensing process. Following this decision, the Securities Board did not proceed with the process. To further assess whether additional stock exchanges were needed, the government formed a study committee on January 22, led by former Deputy Governor of Nepal Rastra Bank, Chintamani Shivakoti. The three-member committee, which includes Chartered Accountant Sujan Kumar Acharya and Advocate Sijan Guragai, was tasked with submitting a report within 45 days to determine the necessity of additional stock exchanges in Nepal’s capital market.