In a groundbreaking initiative to revamp the capital market, the Nepal Stock Exchange (NEPSE) has formally redefined its trading rules, unveiling a more adaptable and assertive pricing model for listed securities. This novel regulation will come into effect on the upcoming Monday (Baishakh 07). Under the newly enacted “Securities Trading Operation Regulations, 2075 (Revised Regulation 2082)”, the conventional 10% daily price limit has been abolished, permitting individual stocks to vary by up to 15% in a single trading session. This substantial change is anticipated to greatly enhance market volatility, enabling stocks to reach their fair value much more swiftly than under the previous restrictive framework.
Additionally, the regulatory update introduces a vital modification to the pre-opening session, which takes place daily from 10:30 AM to 10:45 AM. To mitigate the common occurrences of “price locks” at the market opening, the allowable price movement during this period has been expanded from 2% to 5%. This modification aims to ensure that the opening price of a stock is more representative of genuine buying and selling dynamics, facilitating a smoother transition into regular trading hours.
Moreover, NEPSE has entirely revamped the index-based circuit breaker system that oversees the entire market. Shifting away from the outdated three-tier system of 4%, 5%, and 6%, the exchange has embraced a more efficient two-tier mechanism. Trading will now be halted for 15 minutes if the NEPSE index moves by 5% within the first two hours of trading. Should the volatility persist and the index experiences an 8% change at any time throughout the day, all trading will cease for the remainder of the session. These modifications align Nepal’s stock market with global best practices, providing investors with greater flexibility during high momentum periods.
New Circuit Breaker & Price Limit Rules
| Feature | New Regulatory Provision |
| Individual Stock Price Limit | Daily fluctuation limit increased to 15%. |
| Pre-Open Session Limit | Price movement threshold increased to 5%. |
| First Market Halt (5%) | Trading suspended for 15 minutes if the Index moves 5% (within the first 2 hours). |
| Full Market Closure (8%) | Trading closed for the entire day if the Index moves 8%. |
