Kathmandu, September 2

The Securities Board of Nepal (SEBON) — securities market regulator — has unveiled its policy and programme for this fiscal year in line with the government’s financial sector development strategy (FSDS) and the fiscal budget that aims to develop required infrastructure in the securities market, increase transparency and encourage participation of the real sector in the stock market.

In the policy and programme that was launched for this fiscal, the securities market regulator has said that it will make permanent account number (PAN) mandatory for share trading from the beginning of next fiscal.

Through the implementation of its policy and programme, the securities market regulator expects the number of investment instruments to further increase. SEBON also expects the policy and programme to help build confidence among investors in the market and the capital market to develop as an important mechanism for capital mobilisation in the long term, according to SEBON Chairman Rewat Bahadur Karki.

As SEBON has obtained the membership of the International Organisation of Securities Commissions (IOSCO) — an international association of national securities regulatory bodies —it will develop the regulatory requirements as per the IOSCO standards to lure foreign investors in the stock market.

As per the policy and programme, SEBON will frame the corporate governance guidelines for the listed companies to safeguard the interests of the investors. It will also develop the rules for venture capital and private equity fund and effectively enforce the supervision manual of the stock broker companies. SEBON also plans to introduce open-ended plan in mutual fund investment.

The securities market regulator also plans to set up Securities Market Institute with its majority stake and issue licence to new stock exchanges keeping in the mind the expansion plan of the capital market.  SEBON also has a plan to frame regulations to enforce the Commodities Market Exchange Act and prepare groundwork for the issuance of municipal bonds, according to the policy and programme unveiled by SEBON for this fiscal.

SEBON will also prepare the guidelines to open investment opportunities for non-resident Nepalis in the securities market and enforce a system whereby any investor who wants to place an order of sell or purchase of securities must to do it online.

The securities market regulator will also expand the working area of margin trading and stock brokers. It also plans to extend the deadline for the sale of shares that have not been dematerialised and provide a separate window for manual share trading for a certain period of time.

SEBON has said that it will also expand its operational autonomy, establish settlement guarantee fund to enhance competitiveness in transactions in the secondary market, and help restructure Nepal Stock Exchange and its subsidiary central depository system.