The Securities Board of Nepal (SEBON) has proposed requiring substantial shareholders of Nepal Stock Exchange (NEPSE)-listed companies to provide advance notice before selling a significant portion of their holdings.

Under the proposed framework, a substantial shareholder intending to sell 5% or more of their shareholding would have to notify the concerned company at least 15 days before the proposed sale. SEBON has also issued a direction under Section 84(1) of the Securities Act, 2063 regarding the advance-notice requirement.

SEBON published a concept paper on September 23 outlining the rationale, international practices and proposed regulatory framework for advance disclosure by substantial shareholders.

According to the regulator, the requirement is intended to provide investors with equal access to information and help them make more informed investment decisions.

Advance disclosure would also give the market greater visibility into potential large-scale share supply. SEBON said the mechanism could help investors and regulators identify unusual price movements and strengthen surveillance of potential securities-related offences and market abuse.

The concept paper is part of SEBON’s broader efforts to strengthen market surveillance, investor protection and orderly trading. The regulator said the measure could also help manage unusual price movements and selling pressure arising from large transactions.

The proposal applies to substantial shareholders of companies listed on NEPSE and focuses specifically on sales amounting to 5% or more of their existing shareholding.