KATHMANDU: A proposed directive currently under review at the Securities Board of Nepal (SEBON) could mandate companies holding a single International Securities Identification Number (ISIN) for both promoter and public shares to file for an ISIN merger.
If the draft “Securities Dematerialization Operational Guidelines 2025” is approved, companies that had previously received just one ISIN for both categories of shares will be retroactively assigned two separate ISINs, one for promoter shares and another for ordinary shares. These companies will then be required to formally apply for an ISIN merger to consolidate them again.
The provision is detailed under Clause 7(2) of the directive, which has already been unanimously passed by CDS and Clearing Ltd. (CDSC) and forwarded to SEBON for final approval.
The clause states, “Prior to the implementation of this directive, where a single ISIN has been assigned to both promoter and public groups, including locked-in securities, separate ISINs will be provided after the directive comes into effect.”
However, the directive also allows for flexibility. If CDSC determines, based on applicable law and upon the request of the concerned organization, that separate ISINs are not required, it may allow the ISINs to be merged.
To apply for an ISIN merger, companies must submit:
- A certified copy of the general meeting resolution approving the ISIN merger.
- Proof of having published a public notice at least twice in a national daily and other media outlets.
- A copy of SEBON’s consent for the merger.
- Evidence that the stock market has been informed of the planned merger.
- A self-declaration stating that separate ISINs are not legally required.
Traditionally, banks and financial institutions have received two separate ISINs for promoter and public shares. However, hydropower and other companies had often merged the two into a single ISIN midway through the process—often based on informal arrangements rather than regulatory clarity.
To address these inconsistencies and ensure proper oversight, CDSC has prepared the new directive to institutionalize the ISIN issuance and merger process.
Meanwhile, sources say some business groups are lobbying government entities, including the Ministry of Finance and even the Prime Minister’s Office, to block the directive from being passed.
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