Sebon makes bank account mandatory

Kathmandu, September 18:

Securities Board of Nepal (Sebon) has laid down a new rule from today that a applicant applying for the Initial Public Offering (IPO) must have a bank account. It has taken this step to boost investors’ confidence and make matters transparent.

“It will help screen out fake applicants,” said Dr Chiranjivi Nepal, chairman of Sebon, the regulatory authority of the capital market.

People have been complaining to the regulatory authority about fake applicants since long. The board had earlier made it mandatory for any applicant applying above Rs 10,000 worth IPOs to have a bank account. Still, the board kept receiving complaints about fake applicants applying for IPOs using others’ citizenship certificates or photocopies of these.

“To discourage such swindlers, the board has brough the new rule where any applicant applying for the IPO has to have an account,” Nepal added.

Almost all financial institutions have share investment accounts — targetting the IPO applicants — due to the board’s new regulation. The regulation has checked the spate of fake applicants and the prospect of real applicants getting the shares is better now. Since some time, Sebon has become more vigilant in order to protect investors’ interests. Last month, it suspended Shilpa Securities Pvt Ltd (broker No. 20) on the charge of giving false information.

The regulator must now make all listed companies more transparent — such as financial institutions — so that investors can know the real status of the company before investing their money in them.