SEBON Revises Guidelines: Shortens Deadline for Migrant Workers' IPO Applications and Allows Issuance of Perpetual Non-Cumulative Preference Shares

The Securities Board of Nepal (SEBON) has shortened the application period for shares reserved for Nepali citizens working abroad. This change was implemented through the Securities Issuance and Allotment Guidelines (Ninth Amendment), 2082, which will take effect from Shrawan 1.

As per the revised directive, migrant workers must now apply for primary share offerings within the first four days of opening. If sufficient applications are not received within this period, only then can the timeline be extended by up to 11 days. The total issuance period remains capped at 15 days. However, if the offering is oversubscribed within the first four days, the issue will close immediately.

Additionally, SEBON has introduced provisions for banks and financial institutions to issue Perpetual Non-Cumulative Preference Shares (PNCPS). Only institutions approved by Nepal Rastra Bank (NRB) to issue such shares can apply to SEBON. These shares must be issued at a face value of Rs. 100 and can be allotted only to institutional investors—specifically, not to the general public, licensed securities professionals, or mutual funds.

Issuers are required to provide institutional investors with detailed disclosure documents including associated risks, and obtain a written declaration confirming that the investor has read and understood the terms. The dividend on such shares may not be distributed if the issuing entity fails to generate distributable profits—unless otherwise restricted by the regulator. Conversion or buy-back provisions will follow NRB's guidelines.