Parliamentary Panel Directs Government to Table New Securities Bill
The parliamentary Finance Committee has directed the government to table a new securities bill to overhaul capital market oversight, even as secondary market trading closed lower on Wednesday.
The parliamentary Finance Committee on Wednesday directed the Ministry of Finance and the Securities Board of Nepal to promptly formulate and register a comprehensive new securities bill in the federal parliament, seeking to overhaul governance across the country's capital market.
The directive came during a committee session convened to assess capital market stability, regulation, and investor protection. Committee Chair Dr. Krishna Hari Budhathoki announced a five-point instruction requiring authorities to establish clear legal mandates and accountability for key market institutions, including the Securities Board of Nepal (SEBON), the Nepal Stock Exchange (NEPSE), and CDS and Clearing Limited (CDSC), as reported by Onlinekhabar.
Under the committee's binding instructions, SEBON must re-evaluate rules governing promoter shareholding and establish rigorous grading criteria for companies seeking initial public offerings (IPOs) by evaluating their capital adequacy, net worth, balance sheets, and returns before issuing approvals. Lawmakers also instructed the finance ministry and market regulators to speed up NEPSE's restructuring, overhaul its online trading and data infrastructure to eliminate recurrent disruptions that hit investor confidence and government revenue, and strengthen cybersecurity safeguards. Furthermore, the committee ordered immediate recruitment to fill long-vacant chief executive officer positions at NEPSE and CDSC.
Addressing illicit market practices, the committee demanded tighter surveillance and punitive action against secondary-market manipulation, explicitly citing circular trading, cornering, artificial supply crunches, and pump-and-dump schemes, according to Onlinekhabar's report on the decisions.
The legislative scrutiny took place amid sharp grievances voiced by retail participants. Speaking before the committee, Khagendra Raj Kandel, general secretary of the Nepal Stock Market Investors Association, accused the Ministry of Finance and financial authorities of prioritizing narrow vested interests over institutional market health, both Onlinekhabar and Artha Sansar reported. Kandel noted that market supervision continues to rely on the outdated Securities Act of 2006 and directives two decades old, allowing perpetrators of multi-billion-rupee manipulations to walk away with negligible penalties of Rs 40,000 to Rs 50,000 while regulatory heads have resigned to evade scrutiny following controversies.
Despite the parliamentary panel's reform push and the finance ministry's recent 21-point reform action plan, sentiment on the trading floor remained subdued. Onlinekhabar reported that the NEPSE index slipped 4.82 points on Wednesday, extending a nine-point loss from Tuesday. Daily transaction turnover dropped to Rs 4.76 billion from Rs 5.38 billion, with 157 listed scrips sliding into the red against 109 advancers, reflecting persistent investor caution.