SEBON releases list of new amendments in four Bylaws; amendments to make stock brokers and merchant bankers more responsible with range of other provisions for structural changes

Securities Board of Nepal has brought a range of amendments in four different Bylaws related to stock market of Nepal and is set to implement the same from Falgun 1, 2076. The market regulator has amended Stock Broker Bylaws 2064, Merchant Banker Bylaw 2064, Stock Brokers and Market Maker Bylaw 2064, Mutual Fund Bylaws 2064 and Share Registration and Distribution Bylaws 2073.

As per the latest revision, the major highlights are as follows:

Stock Broker and Market Maker Bylaws 2064:

*Stock brokers now need to demonstrate their financial source

*Subsidiary companies of commercial banks can perform as stock brokers

*Stock brokers can provide margin loans while the stock dealer can perform as share underwriter, stock broker and institutional investment.

*Stock brokers and dealers need to maintain minimum Rs 20 crore as paid up capital and need to maintain certain percentage of reserve

Share Registration and Distribution Bylaws 2073:

*Implementation of book building system during initial public offerings

* IPO Issue time shortened from existing 35 days to 15 days

*Provision of compulsory discussion on right share in the general meeting of the companies within two months of the board’s decision to issue right shares

*Listed companies can float debentures and other similar instruments in value of foreign currency

 Mutual Fund Bylaws 2064:

*Insurance companies and non-banking financial institutions can now operate mutual funds

*Promotion of open-ended mutual fund schemes where no charges can be levied on the investors by the mutual fund manager as service charge

 Stock Brokers and Merchant Bankers Bylaws 2064:

*No board members and executive head of merchant banker can be a member of other agencies where there is a question of conflict of interest.

*Merchant Bankers need to maintain a reserve.

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