Securities Ordinance gets final shape
Himalayan News Service
Kathmandu, July 4:
An official of the Securities Board Nepal (SEBO), the re-gulatory body of stock market, today disclosed that the Securities Ordinance-2061 aimed at reforming stock market is at its final stage. Deepak Raj Kafle, chairman of SEBO, under the ministry of finance, speaking at a seminar on ‘Corporate Governance: Principles and Practices’ said that after the enforcement of the Ordinance, reforms on various components of stock market will be further intensified. He said that under the corporate and financial governance project, various rules and regulations such as strengthening the capacity of SEBO, rule-making procedures, rules for public issues and offerings, and rules on securities businesspersons including insider trading and public disclosures are being made. He also said that local and foreign consultants from US and other countries are working hard to boost Nepali stock market and bring in corporate governance. With a view to reform stock market, in support of the government initiatives, the Asian Development Bank (ADB) has already approved a loan of $1.63 million, he added.
Other jobs related to the project are institutional strengthening SEBO, privatisation of Nepal Stock Exchange, operation of Ce-ntral Depository System and capacity building of the company registrar’s office.
Speaking at the same function, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Binod Bahadur Shrestha commented that the private sector lacks corporate culture which has affected in improving corporate governance as a whole. He, however, said that FNCCI has been taking initiatives for improving corporate governance.
Bharat Raj Upreti of Pioneer Law Associates commented that corporate governance (CG) work should promote transparent and efficient markets, consistent with the rule of law. He stressed that CG should protect and facilitate the exercise of shareholders’ right. Timely and accurate disclosure relating to corporations, financial situations, performances, ownership and governance of companies are also included in corporate governance, said Upreti. He said that the Company Act 1997 has failed to incorporate principles of corporate governance and the-re is no code of corporate governance applicable to companies in general. He added that SEBO and other regulatory bodies are not able to enforce rules and regulations effectively. The capital market will not develop unless governance of publicly-listed companies is reformed, he added.
Sujit Mundul, CEO of Standard Chartered Bank Nepal, said corporate governance principles include responsibility, accountability, transparency and fairness from companies. Talking about corporate governance in SCB Nepal, Mundul said that the bank’s business is conducted within a developed control framework, underpinned by policy statement, written procedures and control manuals. At SCB, according to him, breaches of law, regulations or the group’s standards are not justified by the pursuit of profit and activities are not made acceptable merely by the practice of competitors or others in the market. Ajit Nivard Cabraal, chai-rman of Cabraal Consulting Group (Pvt) Ltd, a consultant from Sri Lanka said that in Sri Lanka, many investors still believe that CG is the new miracle drug that offers some kind of a guarantee against business risks.