What is SEBON?
SEBON stands for securities board of Nepal. It regulates the capital market under the Securities Act,2006. It was established by the Government on June 7, 1993 as the regulator of share market in Nepal.
Securities board of Nepal not only regulates or monitors the share market but also protects the interest of the investors.
7 members of SEBON are as follows:
- chairman appointed by the Government for a four-year term.
- Joint secretary of the Ministry of Finance.
- Joint secretary of the Ministry of Law, Justice, and Parliamentary Affairs.
- Representative from Nepal Rastra Bank.Representative from the Institute of Chartered Accountants of Nepal.
- Representative from the Federation of Nepalese Chambers of Commerce and Industries.
- One member appointed by the Government who is an expert in the management of securities market, development of the capital market, or the financial or economic sector.
Function and Duties of SEBON
- Offer guidance to the Government about topics pertaining to the advancement of the capital market.
- Establish essential securities regulations and instructions.
- Facilitate the process of officially recording the securities of publicly traded corporations.
- Establish regulations and procedures for the issuance, transfer, sale, and exchange of registered securities.
- Issue a licence to establish and run a stock exchange.
- Issue licences to individuals working as stock brokers, dealers, merchant bankers, and fund managers.
- Issue licences to depository companies, depository participants, and credit rating agencies.
- Facilitate the registration of mutual funds, authorise the operation of collective investment plans, and oversee and monitor their activities.
- Provide approval for the bye-laws of the stock exchange and depository firm.
- Implement appropriate measures to mitigate insider trading or any other illicit activities pertaining to securities transactions, with the aim of safeguarding the interests of securities investors.
- Establish a collaborative and communicative relationship with relevant agencies to oversee and govern matters related to securities or corporations.
- Execute or establish plans for executing additional duties that are essential for the advancement of the capital market.
Importance of SEBON
the importance of the Securities Exchange Board of Nepal are as follows:
- provides guidance to government on topics related to advancing the capital market.
- establish essential securities regulations and instructions to ensure a fair and transparent market.
- facilitates recording of securities publicly traded corporations, ensuring accuracy and transparency in transactions.
- establishes regulations and procedures for the issuance, transfer, sale, and exchange of registered securities, maintaining market integrity.
- issues licenses for the establishment and operation of stock exchanges.
- issues licenses to individuals working as stockbrokers, dealers, merchant bankers, and fund managers.oversees the activities of depository companies,
- depository participants, and credit rating agencies to protect investors.
- facilitates the regulation of mutual funds, authorizes collective investment plans, and monitors their activities for investor protection.
- implements measures to mitigate insider trading and illicit activities in securities transactions.
- establishes collaborative relationships with relevant agencies to oversee and govern securities and corporate matters effectively.
