Sebon mulling allowing NRNs to trade stocksThe Securities Board of Nepal (Sebon) has assigned a committee to study the pros and cons of formally allowing non-resident Nepalis (NRNs) to invest in Nepal’s securities market.
The Securities Board of Nepal (Sebon) has assigned a committee to study the pros and cons of formally allowing non-resident Nepalis (NRNs) to invest in Nepal’s securities market.
The six-member panel is headed by Niraj Giri, executive director of the Regulation and Management Division at Sebon, and consists of two other Sebon officials and an official each from the Finance Ministry, Nepal Rastra Bank and the Nepal Stock Exchange. The committee can invite a representative of the NRN Association to give feedback.
The securities market regulator has given the committee two months to present a report and prepare a draft of the guideline to enable NRNs to participate in the secondary market, Giri said.
“The report will explain the impact of NRN investment on the secondary market and the entire economy. Based on this report, the committee will frame the draft guideline,” Giri said.
Although the government’s annual budget statements have repeatedly mentioned allowing NRNs to invest in the secondary market, the door has not been opened to them formally.
NRNs have made investments totalling Rs29.85 billion in nine districts in the country, a report made public a year ago by the Society of Economic Journalists-Nepal said. The investments went into services, energy, manufacturing and not-for-profit sectors.
The move to pave the way for NRNs to invest in the secondary market coincides with the passage of the Foreign Direct Investment and Technology Transfer Act, which allows foreign institutional investors and NRNs to take part in secondary market transactions.
Such investors, however, need to register themselves with Sebon prior to buying or selling listed securities, such as stocks and bonds. Also, an investment ceiling and floor will later be created for them, says the latest law.