SEBON gears up to protect investors’ rights

SEBON gears up to protect investors’ rights
ArthaExpress, 6-Oct-07

Securities Board of Nepal (SEBON) was established on June 7, 1993 as an apex regulating body of securities markets. Though its major responsibility is to regulate stock market under the Securities Exchange Act-2006, the board has been passive in the past. Current Bull Run in the Nepse floor has, however, forced the board to come to the forefront to protect investors’ interest.

But Nepali investors are very ill-equipped with information of the companies on which they are betting their hard-earned money. “For a real growth of stock market, investors must be strong and have enough information,” says Dr Chiranjibi Nepal, chairman of Securities Board of Nepal (SEBON), adding that stock market is a mirror that reflects real economic situation of a country. “But the current Bull Run in Nepse and Nepal’s economic growth do not go hand in hand,” he adds.

SEBON also has a responsibility of supervising and monitoring the functions and activities of stock exchange. Not only that SEBON can inspect whether or not stock exchange is executing its functions and their activities are in accordance with the Securities Act -2006. It can supervise and monitor the functions and activities of securities-dealers as well.

There are around 0.8 million investors and the board has to safeguard their interest. “SEBON is committed to investors’ rights,” Nepal adds. “To protect investors’ right, we are planning awareness programmes. Regular and easy information dissimination and capital market strengthening are on our cards,” informs the newly appointed chief of the regulatory body. SEBON can make necessary arrangements to prevent inside trading or any other offences relating to transactions in securities in order to protect the interest of investors in securities.

As there are only 23 brokers, currently and the market has grown exponentially in the last one year, most of the brokers are accused of not entertaining small investors. “Proposal to increase the number of brokers is at the final stage. Once finance ministry approves the proposal, we will invite applications for the new brokers, most probably before Dashain holiday,” he says adding that the Brokers’ code of conduct — to regularise the transactions and make the brokers more efficient — is also on the final stage.

“SEBON is gearing up with all its resources to help the capital market grow soundly.” Nepal says.