Nepal, March 3 -- The government is planning to introduce a new financial safety mechanism to protect investors in the secondary stock market.

To this end, the Ministry of Finance (MoF) has recently enforced the 'Second Five-Year Financial Sector Development Strategy'. The strategy proposes establishing a Central Counterparty (CCP), which will act as an intermediary in the equity market by becoming the buyer to every seller and the seller to every buyer.

According to analysts, the system is designed to minimise risk by guaranteeing the terms of a trade, thereby protecting both parties even if a buyer becomes insolvent or a seller fails to deliver securities.

Among several measures aimed at reducing risks faced by investors, the MoF's s...