Nepal | September 21, 2020

SEBON to speed up process of opening new stock exchange

Himalayan News Service
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Kathmandu, July 15

The Securities Board of Nepal (SEBON) has announced that it will allow the private sector to open a stock exchange.

Unveiling the policies and programmes for fiscal year 2019-20, the securities market regulator stated that along with enhancing Nepal Stock Exchange (Nepse) for development of the country’s capital market, measures will be adopted to expedite the opening of a separate stock exchange by the private sector.

The opening of a new stock exchange has remained in talks since long and SEBON has said that an optional stock exchange is necessary to strengthen and enhance the country’s capital market.

Similarly, SEBON has said it will increase the lock-in period of promoter shares of listed companies, especially hydropower companies. Currently, there is a three-year lock-in period for promoters of listed hydropower companies.

Niraj Giri, spokesperson for SEBON, said that raising the lock-in period is part of adopting international practices in the capital market and ensuring the safety of people’s investment in the capital market.

Along with the plan to revise the existing rule on the lock-in period for promoter shareholders of listed companies, SEBON has also said it will adopt policies to facilitate manufacturing companies with capital of above Rs one billion to participate in the capital market.

Likewise, the capital market regulator will bring down the trading and settlement time from existing T+3 days (trading day plus three days) and strengthen the secondary market of the country. At present, it takes four days for the settlement of any trading of stocks.

Other announcements in the policies and programmes of SEBON include facilitating listed companies with best grading to get concessional loans, introducing automated trading system of over-thecounter market, revising the fee of credit rating companies and enforcing the insider trading related regulation.

“The policies and programmes primarily intend to develop and strengthen the country’s capital market,” said Rewat Bahadur Karki, chairman of SEBON.

A version of this article appears in print on July 16, 2019 of The Himalayan Times.

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