SEBON asks listed companies to make public end date of promoters’ lock-in period 30 days in advance

Published On: December 11, 2023 07:30 PM NPT By: Republica | @RepublicaNepal

KATHMANDU, Dec 11: The Securities Board of Nepal (SEBON) has asked the listed companies to make public the end of the lock-in period of their promoter shareholders 30 days ahead of the deadline.

Issuing a directive on Monday, the regulator of the country’s stock exchange market has made it mandatory to convey the information about the arriving end of the lock-in period of the individual promoter or a group of promoters' stakes in advance of the actual deadline. Until now, such information is not made public while the information is limited only to the concerned promoters and frontline regulators including Nepal Stock Exchange (NEPSE) and CDS and Clearing Limited.

According to the SEBON, the provision has been introduced to maintain transparency in the stocks trading while informing the investors on time.

A lock-in period is a predetermined duration during which investors are restricted from selling, transferring, or disposing of their shares or assets in a company or investment. This period is typically established by a contractual agreement or regulatory requirement and is designed to promote stability, discourage short-term trading, and align the interests of investors with the long-term success of the company or investment.

NEPSE has maintained a 3-year lock-in period for promoters of companies in sectors like hydropower, investment, manufacturing and processing and hotels following the initial public offering (IPO) allotment to the general public. The lock-in period is applicable for staff of the related companies and local people affected by the development projects.

Ambika Prasad Giri, deputy executive director of SEBON, said they have asked the stakeholders including the Nepse and CDS and Clearing Limited to make public related information. “The information about the number of promoters’ shares, nature of such shares and related date of the end of the lock-in period 30 days before the actual date,'' reads SEBON’s notice.

SEBON has also instructed the front line regulators to make public information about the Lock-in period in their related website for at least one week after the end of the lock-in.