Fate of new stock exchange uncertain as writ petition filed at SC

KATHMANDU, Jan 7: The government’s initiative to set up a new stock exchange has suffered a fresh setback following a case lodged at the Supreme Court (SC) challenging the decision.

Advocate Krishna Bahadur Thapa on Tuesday filed the writ against the Securities Board of Nepal (SEBON), the Ministry of Finance and the Office of the Prime Minister and Council of Ministers. Thapa filed the petition with the SC’s Constitutional Bench seeking the intervention of the apex court to halt the process.

The petitioner has demanded to invalidate the government decision saying that it contradicts the principles of a number of legal provisions including Securities Act 2023 and Articles 1, 46 and 162 of the Constitution.

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Thapa filed the writ petition amid ongoing controversies on whether the country needs a second institution to look after stock trading or not. Two weeks ago, the Cabinet gave the go ahead to the SEBON to issue a license to the new stock exchange market. 

Previously too, the issue of opening the new stock trading had courted controversy since the SEBON on September 18, 2022, announced to issue a new stock exchange. The sector’s regulator had to halt the process after a case was filed at the SC against the SEBON’s decision. 

Likewise, the then Prime Minister Pushpa Kamal Dahal in April 2023 also halted the process of giving license to the new stock exchange. However, the issue again came into limelight, after the government in January 2023 formed a panel headed by Former Deputy Governor of Nepal Rastra Bank Chinta Mani Siwakoti to study the rationale behind another stock exchange in the country’s secondary market.

The committee suggested the government restructure NEPSE along with keeping the option open to set up a new stock exchange. It also stated that the opening of a new stock exchange will protect the interests of investors who invest in securities by making the secondary market more competitive, efficient, investor-friendly, and compatible with international level technology.