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Securities
Board of Nepal (SEBON) was established by the Government of Nepal on June 7,
1993 as an apex regulator of Securities Markets in Nepal. It has been regulating the
market under the Securities Exchange Act, 2006. The functions, duties and
powers of SEBON as per the Act are as follows.
- To offer advice to Government on matters
connected with the development of the capital market.
- To register the securities of corporate bodies
established with the authority to make a public issue of its securities.
- To regulate and systamatize the issue, transfer,
sale and exchange of registered securities.
- To give permission to operate a stock exchange
to any corporate body desirous of doing so, subject to this Act or the
rules and bye-rules framed under this Act.
- To supervise and monitor the functions and
activities of stock exchange.
- To inspect whether or not any stock exchange is
executing its functions and activities in accordance with this Act
or the rules and bye-rules framed under this Act, and to suspend or
cancel the license of any stock exchange which is not found to be doing
so.
- To issue licenses to conduct the business of
dealing in securities, subject to this Act, or the rules and the
bye-rules framed under this Act, to companies or institutions desirous
of conducting the business of dealing in securities.
- To supervise and monitor the functions and
activities of securities-dealers.
- To grant permission to operate collective
investment schemes and investment fund programs, and to supervise and
monitor them.
- To approve the bye-rules concerning transactions
in securities framed by stock exchanges and institutions engaged in the
business of dealing in securities, and, for the purpose of making
necessary provisions concerning the development of the capital market
and protecting the interests of investors investing in securities, issue
orders to have necessary alterations made in such bye-rules of stock
exchange and institutions engaged in the business of dealing in
securities.
- To systematize the task of clearing accounts
related to transactions in securities.
- To supervise whether or not security dealers are
behaving in the manner prescribed in this Act, or the rules and the
bye-rules framed under this Act, while conducting business of dealing in
securities, and suspend the license to conduct the business of dealing
in securities in case any securities dealer is not found to be behaving
accordingly.
- To make or ensure necessary arrangements to
regulate the volume of securities transacted and the procedure of
conducting such transactions in order to ensure the promotion,
development and clean operation of stock exchanges.
- To make necessary arrangements to prevent
insider trading or any other offenses relating to transactions in
securities in order to protect the interest of investors in securities.
- To review or make arrangement for reviewing the
financial statements submitted by the corporate bodies issuing
securities and security dealers, and issue directives deemed necessary in
that connection to the concerned corporate body.
- To systematize and make transparent the act of
acquiring the ownership of a company or gaining control over its
management by purchasing its shares in a single lot or in different
lots.
- To establish coordination and exchange
cooperation with the appropriate agencies in order to supervise and
regulate matters concerning securities or companies.
- To discharge or make arrangements for
discharging such other functions as are necessary for the development of
securities and the capital market.
The Governing Board of
SEBON is composed of seven members including one full time chairman appointed
by the Government for a tenure of four years. Other members of the Board
include joint secretary of Ministry of Finance, joint secretary of Ministry
of Law, Justice and Parliamentary Affairs, representative from Nepal Rastra
Bank, representative from Institute of Chartered Accountants of Nepal,
representative from Federation of Nepalese Chambers of Commerce and
Industries, and one member appointed by the Government from amongst the
experts pertaining to management of securities market, development of capital
market, financial or economic sector.
There are seven
departments and sixteen sections in the organization of SEBON. Under the
Management Department, there are two
divisions namely Human Resources Section and Finance Section. There are also
four sections under the Planning and Development Department namely Research
Section, Training Section, Information Technology Section and International
Affairs Section. There are also two section under the Corporate Finance
Department namely, Public Issue Section and Collective Investment Scheme
Section. Likewise, Under the
Regulation Department, there are two sections namely, Stock Exchange
Regulation Section and Market Intermediaries Regulation Section. There are
also four section under the Surveillance Department namely, Stock Exchange
Surveillance Section, Market Intermediaries Surveillance Section, Trading
Surveillance Section and Corporate Surveillance Section. Finally, under Legal
Department, there are two sections Research and Investigation Section and
Enforcement Section.
The major financial
sources of SEBON are the government grant, transaction fee from the stock
exchange and registration fee of corporate securities. Other financing
sources include registration and renewal of stock exchange and market
intermediaries and the income from mobilization of its revolving fund.
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