SEBON Prepares to Review 5 Percent Share Rule, Market Confusion Persists
The Securities Board of Nepal (SEBON) is preparing to review the provision requiring a 15-day prior notice for the sale of 5 percent or more shares by core shareholders. Confusion remains over whether this rule applies to secondary market investors as well.
The Securities Board of Nepal (SEBON) is preparing to review the provision regarding the sale of 5 percent shares by core shareholders that it had made public some time ago. Under that provision, any core shareholder selling 5 percent or more shares was required to issue a notice 15 days in advance. The Board is now preparing to review that same provision.
Various discussions are ongoing in the market regarding the core shareholder provision. On social media, investors have said that this rule will not apply to those buying shares from the secondary market. Some, however, claim that as per the rules, it will also apply to them if they reach the specified percentage through secondary market purchases.
But SEBON has stated that it has directed that this provision apply to both promoters and secondary market buyers. Meanwhile, a high-level source at the Board has indicated that the matter can be reviewed at present.
On Sunday morning, investor Tilak Koirala wrote on social media urging secondary market investors not to panic as the rule would not apply to them. However, many have been saying that, as per the Act, this provision applies to everyone.
- Provision requires 15 days' prior notice for selling 5 percent or more shares
- Dispute over whether the rule applies to both promoters and secondary market buyers
- SEBON signals the provision may be reviewed
- Investor Tilak Koirala's claim versus the argument that it applies to all as per the Act