SEBON Releases Merger/Acquisition Guidelines; Companies Whose Share Trading are Halted Due to Merger Will Resume from Sunday

Guidelines governing the suspension of share trading for companies listed on the Nepal Stock Exchange (NEPSE) have been amended by the Securities Board of Nepal (SEBON).

The repeal of Regulation 2073, which dealt with bank and financial institution mergers and acquisitions, was announced by Nepal Rastra Bank (NRB) through its monetary policy for the current fiscal year. Since then, the board has been creating policies for corporate mergers and acquisitions.

In accordance with the guidelines, the merging company or acquiring company must halt share trading for a maximum of 15 working days after the integrated business transaction in order to complete tasks like matching shares, re-registering securities, dematerializing securities, and listing securities.

Similarly, following the approval of the integrated business transaction in accordance with the applicable company laws, the companies that have received board approval for a merger or acquisition must inform the appropriate authorities of the date of the integrated business transaction.

The board also mandated that companies considering mergers and acquisitions perform integrated business within 6 months in the recommendations. Additionally, until an initial agreement has been reached, companies involved in mergers and acquisitions are not permitted to disclose any information about the merger or acquisition.

Now, the share trading of all companies that has been halted for the purpose of merger and acquisition will resume starting from Sunday. However, share transactions involving anyone other than the basic shareholders of companies that are merging, amalgamating, or acquiring other organizations is not included in the provision.

In order to release the share transactions of shareholders other than the basic shareholders, the organization must submit an application to the securities market and concerned authorities along with the details of the basic shareholders.

According to the Securities Registration and Issuance Regulations, 2073, other arrangements linked to mergers, amalgamations, and acquisitions of companies that have been registered by the Board must follow the guidelines outlined in the directory. The "Guidelines for Amalgamation/Merger and Acquisition of companies that hold Registered Securities, 2079" have been authorized by the Board and will take effect from Kartik 24, 2079. Here is the PDF of the detailed guidelines: