Sebon amends securities regulation

KATHMANDU:

Securities Board of Nepal (Sebon), the securities market regulator, has made amendments to Securities Registration and Issue Regulation to pave the way for international financial institutions to float local currency bonds here.

If the amendments made to the regulation are approved by the Ministry of Finance, international financial institutions like the Asian Development Bank (ADB) and the International Finance Corporation (IFC) of the World Bank Group will be able to issue securities and list them on the domestic stock market.

Once listed, the bonds can be traded on the bourse like any other stock or through over-the-counter trading, meaning the securities can be bought or sold without any bidding process.

“We will now forward the amended version of the regulation to the board for approval,” Sebon Spokesperson Niraj Giri told The Himalayan Times. “It might take two to three weeks for the board to endorse the document as some of the members are currently out of station.”

Once approved by the board, the document will be forwarded to the Finance Ministry for endorsement.

“The amended regulation, among others, will make it mandatory for the issuer of securities to take necessary permission from the government prior to floating the bonds on the market. It also makes it mandatory for the bond issuer to prepare prospectus mentioning the yield on bonds, maturity period, areas of investment and other related information,” Giri said, adding, “The issuers will have to disclose information on status of bonds every quarter.”

The government, through a guideline introduced in October last year, has allowed international financial institutions with AAA credit rating from global credit rating agencies to float local currency bonds here.

Since introduction of the guideline, ADB and IFC have obtained permission from the government to issue the debt instruments. ADB has received permission to float bonds worth Rs 50 billion to fund eight hydropower projects, while IFC received permission to float local currency bonds of up to $500 million.

Source: THT