Key Demands Highlighted in the Reform Plan

• Abolition of the 15-Day Prior Notice for Ordinary Investors: The associations have strongly objected to the rule requiring a 15-day prior notice before selling shares legally purchased in the secondary market, arguing it infringes upon free trading rights and distorts market liquidity. They demand that general investors be allowed to trade freely without unnecessary quantitative or time-wise restrictions, reserving prior notices only for promoters or strategic investors offloading large volumes. For founders, the notice period should be shortened to seven days, with bulk transactions handled via dedicated "offer for sale" or block transaction systems.
• Overhaul of IPO and Promoter Share Structures: The associations have urged a revision of IPO and promoter share proportions, suggesting a flexible minimum threshold of 30 percent based on company nature, capital, risk, and business model. They proposed gradually transitioning promoter shares into the public domain—while retaining necessary stakes for core operators—and exploring the feasibility of making up to 50 percent of shares publicly tradable for select companies.
• Streamlined Post-IPO Trading and Institutional Allocation: To curb abnormal price fluctuations and market imbalances, the groups recommended that qualifying shares become tradable without arbitrary post-listing restrictions. They also suggested allocating specific portions of public issues to institutional investors and mutual funds while leaving the rest for the general public, fostering a demand-driven pricing mechanism.
• Uniform Price Adjustment and Capital Gains Tax Alignment: The memorandum emphasizes the need for complete synchronization between the Nepal Stock Exchange (NEPSE) and the Central Depository System and Clearing (CDSC) regarding bonus and right share price adjustments. Investors have called for integrating NEPSE's adjusted base prices directly into CDSC's archive system, applying scientific cost-calculation methods, and levying capital gains tax strictly on actual realized gains.
• Standardized and Risk-Based Margin Trading: The associations demanded uniform minimum standards across all brokers for margin trading. They proposed establishing variable margin rates tied to stock liquidity, price volatility, and risk profiles, alongside clear risk disclosures to protect investors from excessive market volatility.
• Upgraded Technology and Faster Settlement Cycles: Advocating for a faster, more secure technology-friendly ecosystem, the groups urged SEBON to study the gradual shortening of the current settlement timeline from T+2/N+3. They recommended fostering direct, automated coordination among the CDSC, NEPSE, brokers, and the banking system with an eye toward transitioning to a T+1 or even quicker settlement model.