Securities Act Flashcards
(Securities Act, 2063) - Securities:
Means any shares, stocks, bonds, debentures, debenture stocks or collective investment scheme certificate issued by a body corporate or government bonds, and includes such other securities as may be specified by the Board.
(Securities Act, 2063) - Securities transactions:
Means the issue, purchase, sale or exchange of securities and other acts pertaining thereto.
(Securities Act, 2063) - Stock exchange:
Means a market, place or facility performing the purchase, sale or exchange of securities on regular basis by bringing together to the purchasers and sellers of securities.
(Securities Act, 2063) - Registration of securities:
Means the registration of securities by a body corporate with the Board.
(Securities Act, 2063) - Enlisting:
Means the enlisting of securities on a stock exchange for the purposes of purchasing, selling or exchanging securities through the stock exchange.
(Securities Act, 2063) - Collective investment scheme:
Means such an investment fund, unit trust or similar other participatory fund management program as specified by the Board.
(Securities Act, 2063) - Insider information:
Means any such specific kind of information or notice not published by a body corporate issuing any securities as may be capable of affecting the price of such securities if such information or notice is disclosed.
(Securities Act, 2063) - Securities business person:
Means a company or body licensed under this Act to carry on securities business.
(Securities Act, 2063) - Formal agent:
A person appointed by a licensed securities business person to carry on securities business on their behalf.
SEBON Fund Sources (Securities Act 2063)
Separate fund includes:
- Government of Nepal allocations
- Grants/loans (GoN-approved)
- License fees
- Securities registration fees
- Transaction fees/charges
- Fines from Board
- Other approved sources
SEBON Revolving Fund (Section 23)
Purpose: Manage income
Held as: Government securities/periodic accounts
Usage: Spent (except earned income)
Public Securities Issuance (Section 30)
Requires:
1. Board-approved prospectus
2. Published prospectus
3. Public inspection location
Prospectus Exemptions (Section 30(2))
Exempt:
1. NRB-issued securities
2. GoN-guaranteed securities
3. Sales to =50 persons
4. Employee/shareholder offerings
5. Board-approved exemptions
Prospectus Liability (Section 33)
Personally/collectively liable:
- Issuing body corporate
- Directors signing prospectus
- Preparing experts
For truth of details/documents
Stock Exchange Functions (Section 45)
Must:
1. Ensure transparent/fair transactions
2. Protect investor interests
3. Enforce legal compliance
4. Maintain trading facilities
5. Frame operational Bye-laws
6. Employ qualified staff
7. Provide security systems
SEBON Transaction Limits (Section 45(1)(f))
May fix ceilings on:
- Transaction values
- Securities held/traded per person
Stock Exchange License Requirement
Mandatory SEBON license for:
- Operating stock exchange
- Securities business
(Sections 36(2) & 56(1))
Stock Exchange License Denial (Section 40(1))
Grounds:
1. Unnecessary for market
2. Not just for investors
Securities License Denial (Section 60)
Grounds:
1. Insolvency
2. Incomplete application
3. Unqualified personnel
Securities Business Types (Section 63)
10 categories:
1. Brokerage
2. Trading
3. Issue management
4. Investment management
5. Consultancy
6. Fund management
7. Custodial services
8. Settlement services
9. Market making
10. Board-specified
Licensed Business Register (Section 68)
Includes:
- Business details
- License terms
- Personnel info
- Document locations
- Ownership data
- Board-required info
Formal Agent Register (Section 69)
Includes:
- Agent details
- Registration date
- Appointing business info
- Board-required data
7-Day Reporting (Section 70)
Report:
1. Business cessation
2. Agent termination
3. Registered detail changes
Public Information (Section 93)
Deemed public if:
1. Per exchange Bye-laws
2. In public records
3. Trading room access
4. Available on request
5. Specific class notice
6. International publication
