SEBON Recommends New Measures to Facilitate NRN Investments in Nepal's Secondary Market
Thu, Sep 7, 2023 10:07 PM on Latest,
The Securities Board of Nepal (SEBON) has put forth a series of recommendations aimed at enhancing investment opportunities for non-resident Nepalis (NRNs) in the secondary market. These proposals include measures to amend the Foreign Investment and Technology Transfer Act, 2075.
Key Recommendations
Unlimited Withdrawals: SEBON suggests that NRNs should have no limits when it comes to withdrawing their initial investment amounts from the secondary market.
Profit and Dividend Repatriation: The board proposes that NRNs be allowed to repatriate profits or dividends earned from investments, with an annual limit of up to 10 lakh Nepalese rupees.
Investment Focus: The report recommends that NRNs explore investment opportunities in sectors like hydropower and other real sector companies, aligning with the objectives outlined in the current fiscal year's budget. Furthermore, SEBON believes that the board should have the authority to establish investment limits in the secondary market.
Facilitation by Nepal Rastra Bank: The report suggests that the National Bank should play a facilitating role in enabling NRNs to invest in the stock market.
Foreign Currency Bank Accounts: SEBON recommends the establishment of separate foreign currency bank accounts for NRNs in Custodian Member Banks. To implement this, the board intends to request Nepal Rastra Bank to designate a commercial bank as a patron member bank for this purpose.
Foreign Currency Accumulation and Loans: NRNs would be allowed to accumulate foreign currency in these designated accounts and obtain loans in Nepali currency, with a ceiling of up to 90 percent of the total accumulated amount.
Board's Role: The report underscores the role of SEBON in facilitating these measures to streamline and support NRN investments.
These recommendations represent a proactive approach by SEBON to encourage NRN participation in Nepal's secondary market and stimulate foreign investment, potentially contributing to the country's economic growth.
