SEBON seeks feedback on draft public issue eligibility directive

The Securities Board of Nepal (SEBON) has put a draft directive on the general eligibility of companies for public issues out for consultation. In a notice dated Asoj 1, the regulator said the document was prepared to make the public issue system fair, orderly and credible, and invited stakeholders to send comments to support@sebon.gov.np within seven days of the notice being published. According to the board, the directive is meant to ensure that only qualified, transparent and sustainable corporate bodies are selected for public issues, to protect investors, and to promote good governance, financial discipline and transparency. It also proposes a risk-based system for judging eligibility for an initial public offering according to the nature of different industries. SEBON said the draft begins implementation of point 1 of the capital market strengthening and revival action plan, 2083, which the Ministry of Finance released on 2083/05/29. The rules would apply to corporate bodies that want to issue securities to the public, to companies converting into public companies before an issue, and to other institutions approved to make public issues under existing law. The draft covers general and financial eligibility for initial public offerings, governance standards, the qualifications of promoters, directors and management, disclosure and prospectus requirements, due diligence, the use and monitoring of funds raised, post-issue obligations and regulatory supervision, and provisions on offences, penalties and administrative action. The board said it is committed to carrying out the market development programmes in the action plan on time. It expects the directive, once in force, to make the public issue process more orderly and transparent, bring it closer to international practice, encourage qualified companies to enter the capital market and help mobilise more capital from the private sector and the public. The full draft is available through a link in the notice.