Finance Committee directs action to curb stock market manipulation, orders immediate action against wrongdoers
The House of Representatives Finance Committee has directed SEBON and NEPSE to stop manipulation, cornering, pump and dump, and other activities in the secondary securities market. The committee also instructed grading companies based on financial fundamentals before IPO issuance, restructuring NEPSE, and immediately presenting a new securities bill in parliament.
Kathmandu. The Finance Committee of the House of Representatives has directed the Securities Board of Nepal (SEBON) and the Nepal Stock Exchange (NEPSE) to stop manipulation during trading in the secondary securities market.
In a meeting held this morning, the Finance Committee instructed SEBON and NEPSE to curb manipulations including collusive buying and selling, creating artificial scarcity by controlling supply, and cornering circular trading and pump and dump by creating artificial demand to sell at high prices. The committee directed close monitoring and surveillance of such activities and immediate necessary action against individuals or companies involved.
The committee instructed SEBON to permit a company's IPO issuance only after grading and prioritization based on capital adequacy, net worth, balance sheet, returns, and other fundamentals. The committee also directed a review of the provision regarding share ownership that founders must hold.
The committee concluded that frequent disruptions in NEPSE's online trading system technology and data system have harmed investors and government revenue. Therefore, it directed the Ministry of Finance, SEBON, and NEPSE to accelerate NEPSE's restructuring, upgrade the technology, and ensure the highest level of cybersecurity.
Likewise, as the positions of Chief Executive Officer at NEPSE and CDSC have remained vacant for a long time, the committee directed the Ministry of Finance to immediately initiate the recruitment process.
The committee directed the Ministry of Finance and SEBON to draft a new securities bill that clearly defines the roles, responsibilities, and accountability of SEBON, NEPSE, and CDSC to create a modern, technology-friendly, organized, transparent, credible, and investment-friendly environment for Nepal's capital market, and to immediately present it in the federal parliament.