SEBON Under Pressure to Revise 15-Day Share Sale Notice Rule After Market Rout
Nepal's securities regulator held a nearly three-hour meeting with investor representatives on Tuesday to discuss the controversial 15-day advance notice requirement for substantial and founder shareholders. Investors blamed the rule for triggering panic selling and a sharp market decline, and urged SEBON to withdraw or revise it. SEBON officials responded positively and indicated amendments would be considered soon.
The Securities Board of Nepal (SEBON) held a nearly three-hour discussion with investor representatives on Tuesday over the controversial requirement for substantial and founder shareholders of listed companies to provide 15 days' advance notice before selling shares.
Investor representatives strongly urged SEBON to withdraw or revise the provision, arguing that its application to shares purchased through the secondary market had triggered panic selling and contributed to a sharp decline in share prices.
During the discussion, investors argued that shares bought through the secondary market should not be treated in the same manner as founder shares. They called for a clear distinction between promoter holdings and shares acquired by ordinary investors.
Nepal Shareholders Association President Ghanshyam Pandey said imposing the 15-day notice requirement on secondary-market investors was against the basic principles of the capital market.
Investor Tilak Koirala proposed reducing the notice period to seven days. He also suggested introducing an Offer for Sale (OFS) or separate bulk-trading window to handle large volumes of promoter shares released after the lock-in period, instead of selling them through the regular TMS.
Investor Deepak Ratna Shakya also called for a separate mechanism for large transactions, warning that the sudden entry of huge volumes of shares into the regular market could create excessive selling pressure.
Investors also proposed a separate public portal to regularly disclose shareholders holding 5 percent or more of a company's shares. Issues related to margin trading, book-closure price adjustments, rights shares and bonus shares were also discussed.
SEBON officials reportedly responded positively to the concerns and indicated that necessary amendments would be considered soon. Chairman Dr. Gopal Prasad Bhatta is currently outside the Kathmandu Valley for World Investor Week programmes. The board is expected to meet after his return and take a formal decision on the controversial provision.