The Nepal Securities Board has introduced a policy to facilitate investments from Non-Resident Nepalis (NRNs) through securities. The Securities Issua
The Nepal Securities Board has introduced a policy to facilitate investments from Non-Resident Nepalis (NRNs) through securities. TheSecurities Issuance and Allotment Guidelines (धितोपत्र निष्काशन तथा बाँडफाँड (आठौं संशोधन) निर्देशिका, २०८१) have been revised to enable NRNs to invest via selected investment companies.
Key Provisions:
1. Establishment of Investment Companies
- The government and NRNs will jointly fund investment companies.
- These companies are authorized to issue shares to NRNs after obtaining approval from the Securities Board.
- NRNs can collectively hold between 10% and 49% of the issued shares.
2. Share Issuance Process
- Companies must be registered with the Nepal Securities Board before issuing shares.
- Shares cannot be issued at a premium price.
- Applications for share issuance must include a detailed prospectus. The Securities Board will review and approve it if all requirements are met.
- Once approved, the company can open the application for share purchases only for NRNs.
- The application period must be open for at least four days and can be extended up to 15 days if shares remain unsold.
3. Share Allotment and Dematerialization
- Shares will be allocated in multiples of 1,000.
- Allotments will be dematerialized, and NRNs canopen a Demat accountas outlined in the guidelines.
Investment Goals and Management
TheNRNA Development Fund, a collaboration between the Government of Nepal and NRNs, has been established to channel investments into priority infrastructure projects.
- Key Focus Areas: Economically, socially, and environmentally viable projects aligned with government priorities.
- Additional Functions: Conducting feasibility studies and providing investment recommendations.
Analraj Bhattarai, CEO of the NRNA Development Fund, stated that funds raised through share issuance will be directed toward infrastructure development.
Trading of Shares
The trading of shares issued by these joint venture investment companies will follow the system regulated by the Nepalese share market.
This revised framework aims to mobilize NRN investments for Nepal’s infrastructure and development projects whilemaintaining proper regulations.
