Kathmandu. The Securities Board of Nepal (SEBON) has decided to give advance notice to the basic shareholders before selling their shares.

If any of the primary shareholders of a company listed in the Nepal Stock Exchange (NEPSE) are required to issue information 15 days in advance of the sale of the shares to the shareholders of the company.

The provision is aimed at market surveillance, investor protection and development as an instrument of systematic transactions, according to Sebon. The directive has been issued under Section 84(1) of the Securities Act, 2006.

This will help ensure equitable access to investor information, enable investors to make informed decisions, forecast potential supply in the market, identify unusual price reactions, and assist in securities fraud and market abuse monitoring.

SEBON has published a concept paper on “Concept Paper-2083 on the provision of prior notice to the securities market by the basic shareholders of companies listed in the Nepal Stock Exchange Limited before selling their shares”, the rationale of this provision, international practices and proposed regulatory framework, 2083 BS.

According to the Board, the provision of providing advance information by the Board would increase transparency in the market, strengthen regulatory oversight and make risk-based market monitoring effective, help control securities crimes and market misuse, protect small investors by managing abnormal price fluctuations and sales pressure arising out of large volume of sales in the market and strengthen fairness, integrity, accountability and investor confidence in the securities market.