Kathmandu, July 14: The Securities Board of Nepal (SEBON), the regulatory body of Nepal’s security market, has announced a series of reforms aimed at making Nepal’s capital market more transparent, reliable and competitive, including stricter regulatory oversight of social media finfluencers who attempt to influence stock market trading.
In a statement, the securities regulator said it would immediately implement several policy measures to strengthen investor protection, improve market efficiency and enhance regulatory oversight.
SEBON said it will closely monitor individuals and influencers who use social media platforms to spread misleading information, provide unauthorised investment advice or manipulate investor sentiment and stock prices.
The board also plans to regulate companies that raise funds from the public through social media before obtaining approval for an Initial Public Offering (IPO), bringing such activities within the scope of securities regulations.
To strengthen enforcement, SEBON said it will enhance coordination among relevant regulatory and law enforcement agencies during the preliminary investigation of securities-related offences.
Stricter IPO approval process
SEBON also announced plans to reform the IPO approval process by incorporating feedback from stakeholders.
Under the proposed changes, companies seeking to issue IPOs will be required to undergo a more comprehensive assessment of their financial condition, corporate governance and management performance before receiving regulatory approval.
To reduce the cost of investing, the board said it will review the fees charged in both the primary and secondary securities markets.
SEBON also plans to introduce a new benchmark stock index based on free-float shares—shares that are freely available for trading in the market—while retaining the existing NEPSE Index as the overall all-equity market index.
Margin mrading and market supply reforms
The regulator said it will work with Nepal Rastra Bank (NRB), the Nepal Stock Exchange (NEPSE), CDS and Clearing Limited (CDSC) and licensed stockbrokers to address existing limitations in the recently issued margin trading directive and bring the system into full operation as soon as possible.
To maintain a better balance between the demand and supply of securities in the market, SEBON also plans to review the lock-in period for mutual funds and existing regulations governing the allocation of securities by the board.
According to SEBON, the reforms are intended to improve market integrity, strengthen investor confidence and support the sustainable development of Nepal’s capital market. #nepal
