The Nepal government has amended the Securities Registration and Issuance Regulations, 2083, preventing joint investment companies established with the government and Non-Resident Nepalis (NRNs), Nepali citizens residing outside Nepal, from issuing initial public offerings (IPOs) at a premium. The amendment also sets new limits for share issuance and trading units for these companies.
Approved by the Nepal government based on the recommendation of the Nepal Securities Board (SEBON), Nepal’s securities market regulator, the ‘Securities Registration and Issuance (Eighth Amendment) Regulations, 2083’ introduces several key provisions. These companies can now issue shares ranging from a minimum of 10 percent to a maximum of 25 percent of their issued capital. Furthermore, the shares of these companies will be traded in units of a minimum of 1,000 shares, and only Non-Resident Nepalis will be eligible to purchase them.
Background on NRN Investment
The debate surrounding attracting investment from Non-Resident Nepalis into Nepal’s capital market has been ongoing for a considerable period. The path for NRNs to invest in the share market was initially opened with the issuance of the eighth amendment to the Securities Issuance and Allotment Directive on Mangsir 7, 2081 (November 22, 2024). This directive had previously stipulated that joint investment companies could not issue shares at a premium and could allocate 10 to 49 percent of their issued capital for Non-Resident Nepalis.
SEBON, whose current chairman is Dr. Gopal Prasad Bhatta, appointed by the Council of Ministers on Asar 5, 2083 (June 19, 2026), had been working for over a year to amend the Securities Registration and Issuance Regulations, 2073. The regulatory body sought to revise its policy framework after the Public Accounts Committee, the Office of the Auditor General, and the Commission for the Investigation of Abuse of Authority (CIAA), Nepal’s anti-graft body, raised concerns regarding IPOs issued through premium and book-building methods.
Impact and Future Steps
The implementation of the ‘Securities Registration and Issuance (Eighth Amendment) Regulations, 2083’ is expected to streamline the process for NRN investment, though the extent of its impact on increasing NRN capital market participation remains unclear.
Prime Minister Balen Shah’s government has approved these changes, which are part of broader efforts to refine the country’s financial regulations. According to Dr. Gopal Bhatta, SEBON plans to introduce policies related to mutual funds within one to two days, as of information from Asoj 14, 2083 (September 30, 2026). Additionally, a draft of the Debenture Registration and Issuance Regulations, 2083, is currently collecting feedback from stakeholders.
Unresolved Questions
Despite the new regulations, some ambiguities persist. There is a need for clarity regarding the differing share issuance limits across various legal instruments. For instance, the ‘Securities Registration and Issuance (Eighth Amendment) Regulations, 2083’ specifies 10 to 25 percent for joint investment companies, while the ‘Securities Issuance and Allotment Directive (Eighth Amendment), 2081’ mentioned 10 to 49 percent. Furthermore, the NRN Nepal Development Fund reportedly received permission to raise up to 85 percent of its capital through IPOs in foreign currency. Reconciling these different provisions is crucial for a coherent regulatory environment.
