KATHMANDU, May 4: The Securities Board of Nepal (Sebon) has permitted five companies to establish and mobilize the specialized investment fund, opening a gateway to attract necessary capital for long term growth of businesses including start-ups.
With the regulator approving the licenses, Nepal for the first time is getting the designated companies to operate funds like private equity funds, venture capital funds and hedge funds, among other specialized types of funds in the securities market. Global Equity Fund Pvt Ltd, Laxmi Capital Market Ltd, NIBL Ace Capital Ltd, NIC Asia Capital Ltd and NMB Capital Ltd have received the licenses in this regard.
According to Sebon, it has asked these firms to build necessary infrastructures to operate their new jobs. The regulator has shortlisted these firms out of nine applicants.
Two years ago, Sebon issued the Specialized Investment Fund Regulation, 2075 (2019), paving the legal way for operation of the aforementioned funds. The new initiative has aimed at allowing start-ups, innovative business ventures and services to secure funding and financing from specialized investment funds like venture capitals and equity funds.
Sebon has fixed a minimum paid-up capital requirement for the fund manager at Rs 20 million. The minimum size of the funds like private equity fund, venture capital fund and hedge fund must be Rs 150 million and the fund manager should have at least two percent stake in such funds, according to the new regulation.
The unit holder of any fund should not exceed 200 and the fund should be close-ended type. Bank and financial institutions, insurance companies, pension funds, international investors and Nepali as well as non-resident Nepalis, among others, can invest in such funds.