SEBON Publishes Draft Directive on General Eligibility for Public Issuance

The Securities Board of Nepal (SEBON) has made public the draft of the “Directive on General Eligibility for Public Issuance, 2083” for feedback from stakeholders.

The draft directive has been introduced as part of SEBON’s efforts to ensure the selection of eligible, transparent, and sustainable companies for public issuance, protect investors’ interests, and establish a fair, systematic, and reliable public issuance system in the capital market.

The move also aims to promote corporate governance, financial discipline and transparency, while developing a risk-based initial public offering (IPO) eligibility system based on the nature of different industries.

The initiative marks the beginning of the implementation of the program outlined in Point No. 1 of the Capital Market Strengthening and Revival Action Plan, 2083, publicly released by the Ministry of Finance on Bhadra 29, 2083.

The proposed directive will apply to companies seeking to issue securities to the general public, companies that have converted into public companies and intend to make a public issue, and other institutions authorized to conduct public issuance under prevailing laws.

The draft includes provisions covering the general and financial eligibility criteria for companies seeking to conduct an IPO. It also proposes standards related to corporate governance, the eligibility of promoters, directors and management, information disclosure and prospectus requirements.

Similarly, the directive includes provisions on due diligence and professional responsibility, utilization and monitoring of funds raised through public issuance, post-issuance obligations, compliance and regulatory supervision, as well as offences, penalties and administrative actions.

SEBON has requested all concerned stakeholders to submit their comments, suggestions and feedback on the proposed provisions within seven days from the date of publication of the notice. Stakeholders can send their feedback to SEBON at support@sebon.gov.np.

SEBON said it remains committed to implementing market development and reform programs included in the government’s action plan within the specified timeframe.

The regulator expects that the implementation of the directive will make the public issuance process more systematic, transparent and timely, while aligning it with international practices and standards. It also believes the framework will encourage eligible companies to enter the capital market and create a better environment for mobilizing additional capital from the private sector and the general public, contributing to broader economic activity and development.