Policy and Programmes for Securities and Commodities Market
The Securities Board of Nepal (SEBON) has
announced that a four-year strategic plan would be formulated for the
development of the securities and commodities market in the country.
"The four-year strategic plan will be
implemented for the step-wise development of the capital market," the
SEBON said in its Policy and Programmes of the Securities and Commodities
Market for the Fiscal Year 2020/21.
Cycle of transaction clearance will be
reduced from 'T plus 3' to 'T plus 2' in the current fiscal year. T plus 2
means the securities transactions would be cleared within two days of the
securities trading which means the traded securities are deposited in the
account of the buyer only in the second day of the transaction. Currently, the
securities transactions are cleared within three days of the trading.
Likewise, SEBON Chair Bhisma Raj Dhungana
said that the share transaction would be fully automated within this year by
synchronising the investors' bank account and Dmat account.
The capital market regulator has unveiled
plan to promote and facilitate the real sector companies' entry to the share
markets, invite strategic partner at the Nepal Stock Exchange Limited and
implement structural reforms, and give licenses to the commodity exchanges.
"Commodities exchange company will be
established as per the legal provisions and licenses will be given to the
commodity trading companies," read the policy and programmes.
The SEBON had almost completed the process
to establish two commodities trading companies in the last fiscal but it
scrapped the process, for the second time, and has announced another process
for the same.
Likewise, framework and formats required
for the companies listed at the NEPSE, and share brokers to submit the
transactions and other details to the SEBON would be developed in coordination
with the Institute of Chartered Accountants Nepal (ICAN). Nepal Financial
Reporting Standard would be implemented in the share market.
A separate SME trading platform for the
small and medium enterprises and Main Board for other companies will be
developed in the share market. NEPSE will get necessary support from the board
in implementing the new trading facility.
The SEBON has also announced plan to create
provision to completely dematerialise the listed government bonds and activate
their transaction in the secondary market, provide license to a stock dealer to
increase the size of transaction and maintain price stability in the secondary
market, and run specialised investment funds such as private equity fund and
venture capital.
Similarly, a centralised KYC (Know Your
Customer/Client) Management would be established through the CDS and Clearing
Limited for the effective management of the customers of the securities market.
"A draft of Trust Act will be created
for the long-term development of the market and will be submitted to the
Ministry of Finance. To make the board a powerful regulator of the capital
market, Securities and Exchange Board of Nepal Act will be drafted," read
the policy. A bylaws related to bond market will also be formulated to make the
secondary market of the bonds more robust and developed.
The SEBON has also announced that it would
discourage the insiders' trading in the share market, and book building system
will be implemented by creating a directives.
In the last fiscal, the share market in the
country witnessed the capital mobilisation of Rs. 33.65 billion through the
Initial Public Offerings (IPOs), bonds, mutual funds of 34 companies. Bonus
shares of 99 companies worth Rs. 33.67 was registered at the board.
The total securities market capitalisation
has reached Rs. 1792.7 billion by the end of the last fiscal year. There are
212 companies listed at the NEPSE and the number of securities is 4698 million.
This is 12.17 per cent higher than the previous fiscal year 2018/19.
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