SEBON Seeks Advance Notice Before Major Share Sales by Substantial Shareholders

The Securities Board of Nepal (SEBON) has published a concept paper outlining the requirement for substantial shareholders of companies listed on the Nepal Stock Exchange (NEPSE) to provide advance notice before selling a significant portion of their shares. Titled “Concept Paper on the Requirement for Substantial Shareholders of Companies Listed on Nepal Stock Exchange Limited to Provide Advance Notice to the Securities Market Before Selling Shares, Its Rationale, International Practices and Proposed Regulatory Framework, 2083,” the document was made public on Ashwin 7, 2083. According to SEBON, it had issued a directive on Bhadra 9, 2083, requiring substantial shareholders intending to sell 5% or more of their shareholding to notify the concerned company at least 15 days before the proposed sale. The concerned company must then arrange for the information to be publicly disclosed through NEPSE. SEBON issued the directive under Section 84(1) of the Securities Act, 2063, with the stated objectives of strengthening market surveillance, protecting investors and promoting orderly securities trading. The advance-notice mechanism is intended to provide investors with equal access to information and help them make informed investment decisions. SEBON also expects the provision to help the market anticipate potential additional share supply, identify unusual price movements and strengthen monitoring of possible securities-related offences and market abuse. The newly published concept paper provides stakeholders with further details on the rationale, international practices and proposed regulatory framework surrounding the advance-disclosure requirement. SEBON expects the framework to improve market transparency and strengthen regulatory oversight through more effective risk-based surveillance. It also aims to help address unusual price movements and selling pressure that may arise from large-volume share transactions, particularly in relation to the protection of small investors. According to SEBON, the proposed framework is intended to support fairness, market integrity, accountability and investor confidence in Nepal’s securities market.