Kathmandu. The Nepal Chamber of Commerce (NCC) has termed the new provision proposed in the Securities Dematerialization Operation Guidelines 2082 issued by CDS and Clearing Limited (CDSC) recently as impractical, investment-friendly and creating uncertainty in the stock market.

“Serious attention has been drawn towards cdsc’s provision of providing different ISIN numbers to founders and general public for dematerialized securities and not automatically converting founder shares to the general public after the locking period,” the chamber said. Implementation of CDSC guidelines will have a long-term impact on Nepal’s stock market, weaken investor confidence, and negatively impact the energy sector, cement, hotels, manufacturing industries, media, among others.

The chamber also believes that the proposed arrangement would be contrary to international norms and established practices. “These guidelines go against the interests of investors, and such arrangements in nepal’s un maturing capital market will add to the uncertainty and insecurity in the investment environment,” the chamber said in a press release. ‘

According to the Chamber, the decision to stop the automatic conversion to founder shares and to arrange separate ISIN numbers in the classification has created a crisis of confidence in the market, while the CDSC has stopped the dematerialization process of shares for the last few years.

The stock market in Nepal is yet to become investment-friendly. In such a situation, an organization like CDSC has brought a new system by reversing the old standards made by itself, which has created a negative psychology in the market.

The Chamber has drawn the serious attention of the government and regulatory bodies to amend this directive immediately and make a practical and investment-friendly arrangement. Otherwise, there is a serious risk that investor confidence will decline, founder shares will become inactive, and the liquidity crisis in the market will increase, the chamber said.

The Chamber has also drawn the attention of the Securities Board to reconsider the guidelines brought by the CDSC to develop the overall capital market in Nepal, guarantee investment security and maintain the confidence of the private sector.