A group of investor organizations campaigning for capital market reforms has submitted a memorandum to the Nepal Stock Exchange (NEPSE), highlighting various issues in the market.
On Bhadra 5, the investor group demanded immediate action to address the ongoing challenges in Nepal’s capital market, which they describe as being in a poor state.
The memorandum pointed out misuse of the International Securities Identification Number (ISIN) by institutional investors in the secondary market. Shares are reportedly being sold before completing the three-year lock-in period. The investors urged the regulatory authorities to form a high-level investigation committee and enforce strict laws to prevent such practices.
The memorandum outlined the following demands:
- Review and suspend the current final 15-minute weighted average price calculation at NEPSE due to repeated issues and lack of transparency. Consider deactivating it or limiting it to the last five minutes of trading.
- Ensure uniformity in founder and public shareholding ratios across all listed companies, similar to the banking and finance sector.
- Prevent founders from selling shares within the declared payback period.
- Halt right share issuance for financially weak companies and allow it only based on dividend capacity, growth, and investment prospects.
- Stop unauthorized pre-IPO fundraising by merchant banks and capital companies, ensuring all share transactions comply with regulations.
- Improve corporate governance for listed and upcoming companies, including transparent audit reports and management details on official websites.
- Monitor credit rating agencies closely to ensure accuracy and transparency in credit rating reports.
The investors warned that if their demands are not addressed, they may escalate their protests to street demonstrations.
