Securities Board of Nepal (SEBON): An Introduction
March 8, 2021 | Investopaper
Introduction To Securities Board of Nepal (SEBON)
Securities Board of Nepal (SEBON) was established by Government of Nepal on June 7, 1993. It is a regulatory body of Securities Markets in Nepal. SEBON has been regulating the market with power conferred by the Securities Related Act, 2006. It has the power to regulate and manage the activities of the securities markets and persons involved in the business of dealing in securities by regulating the issuance, purchase, sale and exchange of securities for the purpose of protecting the interests of investors in securities, by developing the capital market to mobilize necessary capital for the economic development of the country.
Governing Board Of SEBON
Securities Board Of Nepal (SEBON) has seven governing board members including:
1) one full time chairman appointed by the Government for tenure of four years
2) joint secretary of Ministry of Finance,
3) joint secretary of Ministry of Law, Justice and Parliamentary Affairs,
4) representative from Nepal Rastra Bank,
5) representative from Institute of Chartered Accountants of Nepal,
6) representative from Federation of Nepalese Chambers of Commerce and Industries, and
7) one member appointed by the Government from amongst the experts pertaining to management of securities market, development of capital market, financial or economic sector.
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Major Function, Duties and Power of SEBON
The function, duties and power of SEBON have been defined by the Securities Related Act, 2006 which have been listed as under.
—To offer an advice, as per necessity, to the Government of Nepal on matters incidental to the development of capital market
—To register the securities of any corporate body established with the authority to make a public issue of its securities
—To regulate and systematize the issue, transfer, sale and exchange of registered securities
—To grant permission to any corporate body, which is desirous of operating a stock exchange, to operate the stock exchange subject to this Act or the rules and bye-laws framed under this Act
—To regulate and monitor the activities of the stock exchange
—To inspect as to whether or not any stock exchange is executing its activities in accordance with this Act or the rules and bye-laws framed under this Act, and to suspend or revoke the license of such a stock exchange, if it is found that the same has not been done
—To issue a license to companies or institutions, which are desirous of carrying on the securities business subject to this Act or the rules and bye-laws framed under this Act
—To regulate and monitor the activities of securities business person
—To classify securities businesspersons and fix their standards according to their functions and capability by fulfilling such procedures as prescribed
—To grant a permission to operate collective investment schemes and investment fund programmes, and to regulate and monitor the same
—To approve bye-laws of stock exchanges and those bodies which are related with securities business and engaged in securities transactions, and to issue orders to stock exchanges and those bodies which are related with securities business and engaged in securities transactions to make necessary amendment in their bye-laws with a view to making necessary provisions concerning the development of capital market and protecting the interests of investors in securities
—To systematize the clearance of accounts related to securities transactions
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—To supervise whether or not security business persons have maintained such conduct as prescribed in this Act or the rules, bye-laws and directives framed under this Act, while carrying on securities business, and suspend or revoke the license to carry on securities business where any securities business person is not found to have maintained such a conduct
—To make or cause to be made, such arrangements as may be necessary to regulate the volume of securities and the mode of securities transactions for the promotion, development and healthy operation of stock exchanges
—To make such arrangements as may be necessary to prevent insider trading or any other offense relating to securities transactions as referred to in Chapter 9 for the protection of the interests of investors in securities
—To review, or cause to be reviewed, financial statements submitted by corporate bodies issuing securities and securities business persons, and give such directives to the concerned corporate bodies as it deems necessary in this connection
—To regulate and make transparent the act of acquiring the ownership of a company thereby gaining control over its management by purchasing its shares in a single lot or in several lots
—To maintain coordination and exchange cooperation with the concerned agencies in order to supervise and regulate matters concerning securities or company affairs, and
—To perform or cause to be performed such other functions as may be necessary in relation to securities and the development of capital market.
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