The Securities Board of Nepal (SEBON) has amended the Mutual Fund Regulations, 2010, lowering the mandatory seed capital requirement for fund managers. While fund managers must still contribute 15 percent seed capital for their first scheme, subsequent schemes will now require only 10 percent or as little as 5 percent, depending on performance and regulatory ratings. SEBON stated that the revision is aimed at encouraging better governance, compliance, and market participation. To manage risks linked to larger fund sizes, fund managers have been instructed to conduct stress tests and adopt strict risk management frameworks. The regulator believes the changes will strengthen the secondary market and boost investor confidence.
