FAQ

Securities Available for Trading

NEPSE facilitates trading in the following instruments

1. Stocks

• Common Stocks
• Preference Stocks

2. Bonds

• Debentures
• Government Bonds
• Power Bonds

3. Mutual Funds

Number of Listed Securities under various Sectors

-As of 28th April, 2013

Listing of securtities

Listing, which is one of the major functions of Nepse, is a process of admitting different types of securities to be traded on the floor of stock exchange. Listing is the first step towards the secondary market which provides liquidity and marketability to the scrips issued to general public at primary market. In 1994, Nepse started its trading with 62 listed companies. From 2005 government bonds are being listed and traded at Nepse floor. At present there are 226 companies listed in Nepse. Similarly, 19 government bonds and 14 corporate bonds are also listed for trading purpose.

Provisions for Listing of Securities

For any securities to be listed in secondary market of Nepal, the securities should be firstly issued and allotted by a corporate body then only the company’s security will be eligible for transaction in secondary market.

To list the securities by the corporate body in the market, following steps need to be carried out

1. Application to be submitted for the Listing of the Securities

In order to the listing of the securities issued and allotted, Corporate Body shall submit an application along with other necessary documents to the Stock Exchange.

2. Then the inquiries into Application is done by stock exchange  

After receiving the application form, Stock Exchange shall conduct necessary inquiries with regard to the application and particulars and documents received along with application and while conducting such inquiries, the Stock Exchange shall also examine within 15 days of submission of such application whether or not the economic, financial and business condition of the Corporate Body is satisfactory, as well as the arrangements made for the consolidation, sub–division, registration of transfers or transactions, etc. of securities, the issued and paid–up capital of the Corporate Body, the number of its shareholders, and the dynamism of its transactions and during the inquiries if it deems so necessary it may demand additional documents, particulars or information from the concerned Corporate Body.

 3. In case additional documents, particulars or information are demand, it shall be the duty of the concerned Corporate Body to submit the same within 7 days from the date of such demand. 

4.  In case the Stock Exchange, after inquiry, deems it–appropriate to list the securities it shall, within 30 days of receipt, notify the Corporate Body of the fact that securities are listed in the format as per regulation. In case in deems in inappropriate to list the securities the fact shall also be notify to Corporate Body within 30 days of receipt of application.  

5. If corporate body’s securities get approved for listing then Stock Exchange should entered into the listing agreement with the concerned Corporate Body accord to standard format of the exchange.  In this agreement necessary preconditions for Listing of Securities will be mentioned

(a) In case the securities to be listed are Ordinary Shares:

(i) The paid–up capital must be at least Rs. 2.5 million.

(ii) The number of shareholders must be at least 500. 

Provided that in the case of a Corporate Body which has not yet issued share publicly, its securities may be listed on the condition that the required number of shareholders will be reached within two years from the date of listing.

(iii) The face value of the share must be either Rs.10 (Ten) or Rs.100 (One hundred).

(iv) At least 25% of the shares, in case the issued capital does not exceed Rs.10 million but not more than Rs. 50 million, at least 15%, in case the issued capital is more than Rs. 50 million but not more than Rs.100 million, and the percentage of the shares fixed from to time by the Stock Exchange with the prior approval of the Securities Board, in case the issued capital exceeds Rs.100 million, must have been sold or allotted to the public, or set aside for public sale, In the case of a Corporate Body which has not yet issued and sold its shares publicly, it must issue and allot shares within time as fixed by Stock Exchange and attain the prescribed percentage.  

(b) In case the securities to be listed are Preference Shares, Debentures, Unit Saving Scheme Certificates or Mutual Saving Scheme Certificates:

(i) Securities amounting to at least Rs. 5 million in the case of Preference Shares or Debentures, and at least Rs. 20 million in the case of Unit Saving Schemes or Mutual Saving Schemes, must have been issued and allotted.

(ii) The number of holders of Preference Shares, Debentures, or Unit Saving Scheme or Mutual Saving Scheme certificate must be at least 200.

(iii) The face value of the securities must be either Rs. 10 (Ten) or Rs. 100 (One hundred), Rs. 1,000 (One thousand).  

(iv) The Ordinary Shares must have been listed. 

Provided that in the case of the Corporate Body on which His Majesty's Government or a Corporate Body with His Majesty's Government's ownership amounting to more than 50%, it shall not be compulsory to have the Ordinary Shares listed.

(v) In case the securities are redeemable, the remaining term thereof must be at least one year. 

Apart from the above mentioned criteria in the agreement, the corporate body will also be liable for providing information of the company, which can affect the price of securities, to the Stock Exchange immediately. Then, the Stock Exchange shall publish a notice thereof in prominent newspapers of the information of general public investors. 

After all the agreement is completed, the transactions of listed securities may be commenced after 7 days from the date of publication of the notice of listing in newspapers. To carry out the service of listing in the Stock Exchange, the corporate body will have to bear certain charge accord to the nature of the securities which is mentioned in the heading of listing fee and annual fee.

Listing Fee and Annual Fee

For Equity

For Debentures and Mutual Funds

Classification of listed companies

As per the provision provided by listing Byelaws, there is two types of listing which is mentioned below:

• Ordinary Shares, Irredeemable Preference Shares, Debentures or close–ended Unit Saving or Mutual Saving Certificates shall be listed on a permanent basis.
• Redeemable Preference Shares or Debentures shall be listed on a temporary basis.  Securities which have been listed on a temporary basis may be transacted only up to 15 days before the expiry of their period of listing.

Whereas the classification of the listed securities is categories into two groups as Group A and Group B. Nepse classifies the listed companies at the end of (Mid January to Mid February) every year. The companies which comply with the following conditions are classified at Group A.

• Number of shareholders must be more than 1000.
• The company must be in profit  at least for the last three years.
• Corresponding companies must provide their audited or provisional financial reports till Poush (December- January) end of the fiscal year within 6 months form the date of expiry of the financial year. 
• The Paid up capital of the company must be 20 million.
• Book value per share must not be less than the paid up value.
• Shares should have been sold publicly

The companies which do not comply with the given requirements are classified at group B. However, currently the Nepse is under process of developing new bylaws where there will be provision of four categories—A, B, C and D. The category ‘A’ will represent companies that generate a high profit and provide higher rate of return to its shareholders consistently. The category ‘B’ will have companies that are profitable but are not paying dividend to its shareholder. Similarly, the category ‘C’ comprises newly listed companies, while the category ‘D’ will include the companies whose performance is degrading and are struggling to sustain.

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