In Nepal, when people hear “stock market”, they often think of the Nepal Stock Exchange (NEPSE) and shares changing hands on the trading floor or via brokers. But the stock market is much more than just share-trading. It is a system made up of several key components that together enable companies to raise capital, and investors to buy, sell and hold ownership stakes. In this blog we’ll define what a stock market is, then walk through the major components — with short definitions — and link them to Nepal.

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What is the Stock Market?

The stock market is essentially the network of marketplaces where stocks (shares of ownership in companies) are issued, listed, and traded.
In Nepal’s case, companies list on NEPSE, investors trade shares of those companies, and the market enables capital flow between businesses and individuals.

Components of the Stock Market (with short definitions)

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1) NEPSE (Nepal Stock Exchange)

Short definition:
NEPSE is Nepal’s only stock exchange where the public can buy and sell shares of listed companies.

What NEPSE does:

• Lists companies

• Provides trading platform (TMS)

• Publishes daily market data

• Maintains indices like NEPSE Index

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2) SEBON (Securities Board of Nepal)

Short definition:
SEBON is the regulator of Nepal’s capital market. It makes rules, supervises, and ensures fair and safe trading.

What SEBON does:

• Approves IPOs

• Regulates brokers and merchant bankers

• Monitors listed companies

• Protects investor rights

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3) CDSC & MeroShare

Short definition:
CDSC manages Demat accounts and settlement of shares.
MeroShare is the online portal to apply for IPOs and view your share portfolio.

What CDSC does:

• Dematerialization of shares

• Share transfer after IPO allotment

• Settlement of secondary market trades

• Portfolio management via MeroShare

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4) Stock Brokers

Short definition:
Brokers are licensed companies that allow investors to buy and sell shares on NEPSE.

What brokers do:

• Provide TMS trading login

• Execute buy/sell orders

• Offer market information

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5) Merchant Bankers

Short definition:
Merchant bankers help companies issue IPOs, manage share registrars, and handle ASBA processes.

What they do:

• Manage IPO/FPO/right share issuance

• Act as share registrars

• Handle allotment and refunds

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6) Depository Participants (DPs)

Short definition:
DPs are banks and financial institutions that open and maintain Demat accounts for investors.

What DPs do:

• Open Demat accounts

• Link bank & MeroShare

• Handle share transfers

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7) Other Supporting Regulators

These bodies indirectly influence Nepal’s stock market:

Nepal Rastra Bank (NRB)

Controls monetary policy and bank interest rates, which affect market sentiment.

Office of Company Registrar (OCR)

Registers companies that later become publicly listed.

Insurance Board Nepal

Regulates insurance companies listed on NEPSE.

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Conclusion

Understanding these components helps every Nepali investor participate safely and confidently. NEPSE provides the trading platform, SEBON regulates, CDSC settles trades, and brokers, merchant bankers, and DPs act as intermediaries. When you know how each part works, you become a smarter and more responsible investor.