Glossary · 56 terms
The language of Nepal's capital market, in plain words.
Definitions of the terms brokers, regulators and investors use every day. Rules and figures change by SEBON and NEPSE notice, so these describe what a term means rather than current limits.
Terms, defined
lsnep / glossary
$ define TMS
Trade Management System: the screen and engine a broker uses to send orders to NEPSE.
$
$ define LTV
Loan to value: margin lent as a share of the collateral's current value.
$
$ define T+2
Settlement two trading days after the trade: shares and money change hands.
$
C-ASBAMeroshareHaircutFloorsheetNAVCircuit breaker
A
- Allotment
- The process of assigning shares to applicants in a public issue. When an issue is oversubscribed, units are allotted by lottery.
- ASBA
- Application Supported by Blocked Amount. The applicant's bank blocks the application money in their account until allotment, instead of transferring it.
- Ask price
- The lowest price at which a seller is currently willing to sell a security.
B
- Back office
- The broker's internal systems and teams for ledgers, settlement, fees, payouts and reporting, as opposed to client-facing trading.
- Bid price
- The highest price at which a buyer is currently willing to buy a security.
- Book closure
- The date on which a company closes its shareholder register to decide who is entitled to a dividend, bonus or rights issue.
- Broker commission
- The fee a broker charges on each trade. In Nepal it is capped by SEBON as a percentage of trade value, falling in slabs as the value rises.
C
- C-ASBA
- Centralised ASBA. The system that lets investors apply for public issues through participating banks, with the amount blocked in their bank account.
- CDSC
- CDS and Clearing Limited, Nepal's central depository. It holds securities in electronic form and clears and settles trades.
- Circuit breaker
- A rule that halts trading in a security or the whole market when prices move beyond a set limit in a session.
- Clearing
- Working out what each party in a set of trades owes and is owed, in securities and in money, before settlement.
- Client ledger
- A broker's running record of each client's money: purchases, sales, payments, payouts, fees and balance.
- Collateral
- Securities or cash a client pledges to secure a loan, such as a margin loan.
- Contract note
- The document a broker issues after a trade, showing the security, quantity, price, commission and fees.
D
- Demat account
- An account that holds securities in electronic (dematerialised) form, opened through a depository participant.
- Depository participant (DP)
- A firm licensed to open and maintain demat accounts on behalf of the depository. Many brokers and banks are DPs.
- Dividend
- A share of a company's profit paid to shareholders, in cash or as bonus shares.
- DP charge
- The fee a depository participant charges when securities are transferred out of a demat account, such as on a sale.
F
- Floorsheet
- The full list of trades executed on the exchange in a session, with buyer and seller broker, quantity and price.
- FPO
- Further Public Offering. A listed company's issue of additional shares to the public after its initial offering.
- Full-function broker
- A broker licensed for a wider range of services than a limited-function broker, such as margin trading, depository services and advisory, subject to higher capital.
H
- Haircut
- The percentage deducted from the market value of a security when valuing it as collateral, to allow for price falls.
I
- Index
- A number that tracks the combined price movement of a group of securities, such as the NEPSE Index or a sector index.
- IPO
- Initial Public Offering. A company's first issue of shares to the public, after which the shares are listed on the exchange.
- Issue manager
- A merchant banker appointed by a company to manage a public issue, from regulatory approval to allotment.
K
- KYC
- Know Your Customer. The identity and background checks a firm must complete before opening an account for a client.
L
- Limit order
- An order to buy or sell at a set price or better.
- Listing
- Admission of a security to trading on the exchange.
- Loan-to-value (LTV)
- The size of a margin loan as a percentage of the collateral's value. A rising LTV means the client's cushion is shrinking.
M
- Margin call
- A demand from a broker that a client add money or collateral, or reduce their position, because their loan-to-value has passed an agreed level.
- Margin trading
- Buying securities partly with money lent by the broker, with the securities held as collateral.
- Market capitalisation
- The total market value of a company's shares: share price multiplied by the number of shares in issue.
- Merchant banker
- A firm licensed by SEBON to manage public issues, underwrite, act as share registrar and provide related corporate finance services.
- Mutual fund
- A pooled investment scheme managed by a fund manager, in which investors hold units.
N
- National ID (NID)
- Nepal's national identity card and number. Required for new trading accounts since August 2025.
- NEPSE
- Nepal Stock Exchange, the country's securities exchange. It lists securities and matches buy and sell orders.
O
- Order book
- The list of outstanding buy and sell orders for a security, sorted by price.
P
- Pledge
- Marking securities in a demat account as collateral for a loan, so they cannot be sold or transferred without release.
- PMS
- Portfolio Management Service. A licensed service that manages an individual client's portfolio, either at the manager's discretion or on the client's instructions.
- Pre-open session
- A short session before regular trading in which orders are collected to help set the opening price.
- Primary market
- Where securities are issued for the first time, such as through an IPO or FPO.
R
- RTA
- Registrar and Transfer Agent, also called share registrar. Keeps the shareholder register for a company and handles related requests.
S
- SEBON
- Securities Board of Nepal, the regulator of the securities market. It licenses intermediaries and approves public issues.
- SEBON fee
- A regulatory fee charged on each trade as a small percentage of trade value.
- Secondary market
- Where existing securities are bought and sold between investors, through the exchange.
- Settlement
- The exchange of securities and money that completes a trade.
- SIP
- Systematic Investment Plan. A way of investing a fixed amount in a mutual fund at regular intervals.
- Stock dealer
- A firm licensed to buy and sell securities on its own account, subject to the highest capital requirement among brokers.
T
- T+2
- Settlement two trading days after the trade date.
- TMS
- Trading Management System. The software a broker uses to send client orders to NEPSE and manage them. Brokers may run their own with NEPSE approval.
- Turnover
- The total value of securities traded in a period.
U
- Underwriting
- A commitment, usually by a merchant banker, to buy any part of a public issue that is not taken up by investors.
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