SEBON makes arrangement to allow Nepalis abroad to invest in IPOs

KATHMANDU: The Securities Board of Nepal (SEBON) has implemented the 'Securities Issuance and Allotment (Sixth Amendment) Guideline, 2079' with the aim of allowing Nepalis employed in foreign countries to enter the share market. With the implementation of new guideline, Nepali migrants can invest in initial public offerings (IPOs). The new guideline which came into effect on November 3, 2022, is expected to encourage Nepalis employed in foreign countries to remit money through formal channels which would increase the remittances if reservations can be arranged for Nepali migrant workers to invest in the IPOs, according to SEBON. The government made this arrangement after it was realised that the remittances received were being used only for the purchase of consumer goods which are mostly imported. SEBON has made such an arrangement on the initiative of the Ministry of Finance with the aim that the money received from the remittance should be used in the productive sector and in building the national economy. As per the new guideline, Nepalis working abroad can participate in the issuance of general shares (IPOs) in the share market in the country. Before the initial issue to the general public, any company or organisation has to allocate 10% of the shares to be issued to the general public for Nepali migrant workers who have obtained labour approval from the relevant body of the Government of Nepal. While applying for shares, payment must be made through the remittance account opened at Application Supported by Blocked Amount (ASBA) member banks and financial institutions (BFIs). SEBON has made a provision that the share issue and sales manager should publish the invitation letter for a period of 15 days before the issue for the general public. While applying for shares, the applicant should have deposited at least Rs 50,000 in the remittance savings account in the last six months. Likewise, Nepalis working abroad can open beneficiary accounts by submitting customer identification details through electronic means. READ ALSO:

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