KATHMANDU, May 13: Securities Board of Nepal (Sebon) has decided to make the applications supported by blocked amount (ASBA) system mandatory for public offering of stocks from mid-July.
Issuing a statement on Thursday, the Sebon said that it decided to make the ASBA system for public offering mandatory from July 16 following demands from investors, merchant bankers, bank and financial institutions and other stakeholders.
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This system, whereby investors’ money equivalent to the subscription of initial public offering (IPO) or follow-on public offer (FPO) gets blocked until the share allotments are made, is being implemented on a voluntary basis since mid-January.
The capital market regulator has decided to fully enforce the process after considering the reach and advantages of the ASBA facility, Rewat Bahadur Karki, the chairman of Sebon, said.
According to the statement, 52 BFIs, including all commercial banks, have participated in the process that covers all 75 districts of the country. So far, seven listed companies have issued their shares to public by using this new system where the payment of the bid amount for 65 percent of the applications was received through ASBA.
Amid complaints from investors that ASBA application fee was costly, the Sebon last month reduced the maximum application fee that BFIs can levy on applicants to Rs 100. Earlier, they were allowed to charge a maximum of Rs 250 per application.
Sebon, in its statement, said that the enforcement of the ASBA system will reduce the allotment duration taken by a company to 20 days from existing 70 days.
