End insider trading, enhance book building process to increase investor confidence

Political parties have recently unveiled their manifestos for the upcoming elections to the House of Representatives in Kathmandu. These manifestos cover a wide range of issues, including the commitment to end insider trading and boost investor morale in the country.

One key area highlighted in the party manifestos is the improvement of the IPO issuance system. The parties have pledged to introduce new processes and enhance the book building process in order to make it more efficient. Additionally, there is a strong emphasis on expanding access to the stock market for both the public and private sectors.

The Securities Board of Nepal (SEBON) has come under scrutiny recently for protecting insiders rather than holding them accountable for their actions. There have been instances where SEBON did not take action against individuals involved in illegal transactions amounting to millions of rupees. This lack of accountability has raised concerns among investors and stakeholders in the market.

In the manifesto released by the Nepali Congress, there is a focus on implementing a sophisticated monitoring system to prevent insider trading and manipulation in the share market. The party is also committed to making the ‘Investor Protection Fund’ more effective to benefit small investors. Furthermore, there are plans to create a separate platform for small and medium enterprises (SMEs) to raise capital from the market. The goal is to empower SMEs and encourage their participation in the stock market.

The manifesto also outlines reforms for SEBON to become fully autonomous and meet international standards. By restructuring the Nepal Stock Exchange (NEPSE) and Central Depository System (CDSC), the aim is to transform SEBON into a world-class regulatory body. Additionally, there are proposals to introduce stock market and financial management education in school curriculums to promote financial literacy from an early age.

To ensure equitable distribution of wealth, there are plans to allocate 10 percent preference shares of hydropower companies to project-affected locals. This policy will allow these individuals to receive dividends gradually over time. Furthermore, there will be financial incentives for Nepali citizens working on project construction sites to purchase shares and benefit from the capital market.

Overall, the manifestos released by major political parties emphasize the need to end insider trading and improve the overall investor experience in the stock market. By implementing these reforms and creating a more transparent and accountable system, the parties hope to restore investor confidence and drive economic growth in the country.