SEBON Moves to Reconsider 15-Day Share Sale Notice Amid Investor Backlash

The Securities Board of Nepal (SEBON) has indicated that it may reconsider the controversial provision requiring substantial and founder shareholders of listed companies to provide 15 days’ advance notice before selling their shares. SEBON held a nearly three-hour discussion with investor representatives on Tuesday, during which participants strongly called for the provision to be withdrawn or amended. Investors argued that applying the notice requirement to shares purchased through the secondary market had created uncertainty and panic among market participants, contributing to increased selling pressure and a decline in share prices. Investor representatives stressed that shares acquired through the secondary market should not be treated in the same manner as founder or promoter shares. They called for a clear regulatory distinction between promoter holdings and shares purchased by ordinary investors through the stock market. Nepal Shareholders Association President Ghanshyam Pandey said imposing the 15-day notice requirement on secondary-market investors was inconsistent with fundamental capital market principles. Investor Tilak Koirala proposed reducing the notice period to seven days and suggested introducing an Offer for Sale (OFS) mechanism or a separate bulk-trading window for large volumes of promoter shares released after the completion of the lock-in period. Similarly, investor Deepak Ratna Shakya called for a dedicated mechanism for large-volume transactions, arguing that the sudden release of substantial quantities of shares into the regular trading system could create excessive selling pressure. The investors also proposed establishing a separate public portal to regularly disclose shareholders holding 5 percent or more of a company's shares. Discussions additionally covered margin trading, book-closure-related price adjustments, rights shares and bonus shares. SEBON officials reportedly responded positively to the concerns and indicated that necessary amendments could be considered. SEBON Chairman Dr. Gopal Prasad Bhatta is currently outside Kathmandu Valley participating in World Investor Week programmes. The board is expected to hold a meeting after his return and make a formal decision on the disputed provision.