Kathmandu, July 15:

Nepal Stock Exchange Ltd (Nepse) has submitted a Rights Shares Renounce Regulation-2065 to Securities Board of Nepal (Sebon) for the board’s approval.

The regulations is expected to pave the way for rights share renounce and start derivative market.

It is being introduced to encourage investors. Investors’ can maximise their wealth whereas the companies can collect desired capital for their expansion, said Nepse.

One of the important features of the regulations is that the company issuing rights shares can issue right shares’ slip after three days of the declaration. However, the buyer who buys slip can not sell it to others.

As per the new provision, the stipulated time for the transaction of right shares will be 35 days. But if the company increases the validity of the share, the stipulated time will also increase accordingly.

Brokers on behalf of their clients can also help buy or sell such right shares’ slip like the general shares. Investors wanting to buy or sell right shares slip have to register an application at the Nepse through the brokers. However, buying and selling of right shares’ slip can’t be carried out by the same broker. “The agreed amount and the required transaction fee for Nepse and Sebon have to be submitted on the next day of transaction (T+1) and should be sent to the concerned companies within two day (T+2),” Nepse said.

Nespe will start transaction of right shares’ slip from the new fiscal year, after it gets approval from the regulatory authority of the capital market.