The Securities Board of Nepal (SEBON) has launched a massive crackdown on market misconduct. During the Fiscal Year 2081/82 (2024/25 AD), the board penalized a total of 101 market entities. These actions resulted in total fines exceeding NRs 5.06 Crore.
Breakdown of Penalized Entities
The enforcement action targeted various players in the capital market. The specific data for this fiscal year includes:
- 96 Listed Companies: Most of these firms failed to submit their quarterly and annual financial reports on time.
- 2 Stockbrokers: Penalized for operational and compliance failures.
- 1 Merchant Banker: Fined for not following reporting standards.
- 1 Hydropower Company: Faced action for specific procedural delays.
- 1 Insurance Firm: Penalized for violating corporate governance and disclosure rules.
Why the Action Was Taken
The primary reason for these penalties was a lack of transparency. Under the Securities Act, 2063 (Section 101), companies are legally required to share their financial data with the public within a set timeframe.
When companies delay these reports, it creates an unfair advantage for “insiders” and leaves regular investors in the dark. By imposing these fines, SEBON aims to ensure that every investor has access to the same information at the same time.
The Legal Power
SEBON used Section 101 of the Securities Act to calculate these fines. While some companies paid a standard fine of NRs 50,000, others faced much higher penalties for repeat offenses or more serious violations. This represents one of the highest enforcement totals in recent history for Nepal’s stock market.
Investor Impact
This “zero-tolerance” policy is a warning to all listed firms. It shows that SEBON is serious about protecting the rights of small investors. A more transparent market helps build trust and encourages more people to invest in the Nepal Stock Exchange (NEPSE).
Also Read: NRB’s New Rule: Cash Payments Capped at Rs 5 Lakh
