SEBON urges BFIs to rush for ASBA system; implementation of the system from Magh 1

Securities Board of Nepal (SEBON) will be implementing Application Supported by Blocked Amount (ASBA) system from Magh 1, 2073. The board has urged Bank and Financial Institutions (BFIs) to provide application as soon as possible. The main objective of SEBON is to make the public offering easy and transparent for the investors. ASBA system enables investors applying for Initial Public Offerings (IPO) and Further Public Offering (FPO) to apply it online who have bank account in commercial and national level development banks. Investors can apply for the IPO/FPO online as the amount worth application will be blocked in the investor’s respective account. Interested BFIs should meet following criteria to be a member of ASBA System:

• Companies should be ‘A’ or ‘B’ class institutions licensed by Nepal Rastra Bank meeting the paid up capital requirement  and also the net worth per share should be higher than company’s paid up face value.
• Companies should be in operation from past five years and should have net profit for at least past two years.
• Non-Performing Loan (NPL) should be less than 5%, if declared as controversial by the central bank and then the company should have completed three years of clarification.
• Companies should have minimum four branch offices inside valley and should be a listed company with public issue.
• Companies should have provision for IPO/FPO application collection either in its Memorandum of Understanding or Article of Association. There will be no problem for companies to permit for such provision until a year from the implementation of this directive.