Changing the Book Building Method IPO Issuance Regulations

In the current financial year's policy and program published by the board, it is mentioned that the policy has been revised to make public issuance more systematic.

book building is an alternative method of pricing a public offering. A sales manager or underwriter (book runner) creates, collects and records the demand for securities from investors to determine the correct price during a public issue of shares or other securities. In this method, the selling manager or the underwriter has been pricing the public issue based on the demand of various potential investors.

So far, questions are being raised regarding the pricing of shares of companies that have been issued IPOs and have been issued IPOs through this method. For example, last June, the Securities and Exchange Board stopped the IPO issue of Reliance Spinning. There was a lot of controversy regarding the process, the Parliamentary Committees of the Federal Parliament also showed interest, and there were many complaints from investors, so the board instructed to stop the process until another decision is made.

Company had prepared to issue shares for Nepalis who are employed abroad in the first phase from last June 27th. "Last June, we gave an instruction to stop the decision until another decision is made," the source said, "After receiving many complaints, we have given an instruction to stop the company from selling shares for the benefit of ordinary investors." The Public Accounts Committee of the Parliament also sent a letter expressing concern about this company. In the letter, the price of the company is determined based on what? Who has the authority to set the base price of a company coming to book building and what is the process? Questions were asked including.

In the current situation, the committee has instructed the Securities Board to submit detailed information regarding the fact that if the company is allowed to issue an IPO at a fixed price, the general investors may be cheated. The board has already sent its reply. Reliance Spinning Mills has fixed the price of Rs 820 and 80 paisa per share while determining the price through the book building process.

Similarly, the board has also mentioned that the instructions of the audit committee will be implemented in relation to the regulation of the securities market in the policy and program. "In order to maintain uniformity in net worth and premium pricing in the public issuance of securities, best guidelines will be prepared taking into account the guidelines of the Audit Committee and international practice and the currently maintained lock-in period of the founder shares of listed organizations will be studied and amended," it is said in the policy and program.

As mentioned in the government's budget statement, the board has also decided on a program to arrange the legal and institutional arrangements to operate the barter market. The board said, "To formulate the necessary regulations regarding the commodity exchange business, raffish and foreclosure business, and to grant the permit of the commodity exchange market." The board has also said that it will proceed with the work of making and drafting separate laws related to the securities board and the securities market. The board is also prepared to coordinate with the government to formulate laws related to the Nepal Securities and Exchange Commission and the securities market. It is stated in the policy and program to make necessary amendments to the regulations and guidelines under the Securities Act, 2063 and the Commodity Exchange Act, 2074, and to review the supervision manual for effective supervision of the securities market and traders. The board also has a program to make policy arrangements by studying the securities laws, rules and prevailing international practices on the size, capacity and duration of the plan that can be operated by the plan manager of the collective investment fund. The board has also stated that necessary legal arrangements will be made to facilitate the issuance and transaction of green bonds, energy bonds and other new financial instruments to open the investment of non-resident Nepalis in the secondary market of securities. The government has not been able to appoint the Chairman of the Securities Board due to the

controversy. The post of chairman of the board has been vacant since last December 20. Since then, except for exceptions, the board has not been able to work on new licenses, share issuance, permission, action etc.