Kathmandu, August 4
The Securities Board of Nepal (SEBON) has directed its Board of Directors (BoDs) not to invest in the promoter shares of any company that has received any kind of permission from the board and also to refrain from making any investment in the secondary market.
Issuing a code of conduct for its BoDs, the regulatory authority of the capital market has said that BoDs should not invest in the secondary market and promoter shares during his or her tenure at the board ‘to maintain secrecy and integrity’.
As per SEBON’s direction, its board members can no longer join the board of any brokerage company or any company either listed or is in the process of being listed in the secondary market. The SEBON board members have also been barred from working as full-time staff at any aforementioned organisations.
“BoDs of SEBON should maintain financial transparency and they should not abuse the authority granted to them,” the market regulator has said in a media release issued today. According to SEBON, it is also planning to issue corporate governance directive to the organisations that are under the supervision of the authority. SEBON has already issued code of conduct to its staff members.
Board members will now have to get a clearance from the board before they can speak to the media as any information given by them can directly affect individual companies or even the movement of the market. Board members are not allowed to accept any gifts without permission, as it may affect the decision-making process of SEBON, the release has added.
SEBON has a seven-member BoD, including the chairman. Three members are representatives from government agencies. Joint secretaries from Ministry of Finance and Ministry of Law, Justice and Parliamentary Affairs and executive director of Nepal Rastra Bank are members. Representatives from Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Institute of Chartered Accountants of Nepal (ICAN) and an independent member are also on board as members.
A version of this article appears in print on August 05, 2017 of The Himalayan Times.