KATHMANDU: The Finance Committee of the Federal Parliament has directed the government to immediately draft a new securities-related bill and present it to Parliament.
The Committee issued the directive following discussions with stakeholders on the country’s capital market on Wednesday. It instructed the government and the Securities and Exchange Board of Nepal (SEBON) to prepare and introduce new legislation aimed at making Nepal’s capital market more modern, technology-friendly, systematic, transparent, reliable and investment-friendly.
Committee Chairperson Dr Krishnahari Budhathoki said the new bill should clearly define the roles, responsibilities and accountability of all relevant institutions involved in securities issuance, listing, market operation and regulation, as well as investor protection.
“We will direct the Government of Nepal, the Ministry of Finance and the Securities and Exchange Board of Nepal to immediately present a new securities bill in the Federal Parliament, clearly defining the roles, responsibilities and accountability of relevant institutions, including SEBON, Nepal Stock Exchange Limited and CDS and Clearing Limited,” Budhathoki said.
He said the legislation should facilitate securities issuance and listing, strengthen market operation and regulation, and ensure maximum protection of investors while making the capital market more modern, technology-friendly, systematic, transparent, reliable and investment-friendly.
The committee also issued several directives aimed at reforming the capital market. Before granting approval for companies to issue initial public offerings (IPOs), SEBON has been instructed to assess and prioritize companies based on factors including capital adequacy, technological capacity, net worth, balance sheets and returns. It has also been asked to review existing provisions governing promoter share ownership.
The committee further directed the authorities to expedite the restructuring of Nepal Stock Exchange Limited (NEPSE).
Expressing concern that repeated disruptions to NEPSE’s online trading system, network infrastructure and data systems have affected investors and government revenue, the committee instructed the Ministry of Finance, SEBON and NEPSE to upgrade the exchange’s technology and ensure the highest level of cybersecurity.
The committee also called for stricter action against artificial manipulation in the secondary securities market. It directed SEBON and NEPSE to closely monitor practices such as cornering, circular trading and pump-and-dump schemes, which can artificially restrict supply, create demand or influence market prices, and to take necessary action against individuals or companies involved in such activities.
Similarly, the committee instructed the Ministry of Finance to immediately begin the process of appointing chief executive officers for NEPSE and CDS and Clearing Limited (CDSC), as both positions have remained vacant for an extended period.
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