Kathmandu: The Independent Power Producers’ Association, Nepal (IPPAN) has strongly opposed a recent decision made by the Board of Directors of CDS and Clearing Limited (CDSC) regarding the listing of company shares in the stock market.
In a statement issued on Tuesday, IPPAN expressed its concerns over CDSC’s proposal to the Securities Board of Nepal (SEBON), which seeks to assign separate International Securities Identification Numbers (ISINs) for promoter and public shares of companies undergoing the dematerialization process prior to listing on the secondary market.
CDSC had recently submitted a proposal to SEBON suggesting that during the dematerialization of shares of companies in the process of Initial Public Offerings (IPOs) and listings, separate ISINs be issued for shares held by promoters and the general public. This step, according to CDSC, is aimed at improving market transparency and tracking.
However, IPPAN argues that the proposal not only creates confusion and ambiguity among key stakeholders such as promoter investors, the private sector, foreign investors, and the general public investing in the capital market—but also induces a sense of frustration and distrust.
“This proposal introduces unnecessary complexity and lacks clarity, further discouraging private and foreign investors,” IPPAN stated. “If implemented, the proposal will contradict existing laws, prevailing practices in Nepal’s capital market, and accepted international standards.”
IPPAN warned that the move could have long-term consequences for Nepal’s capital market, including damaging the international perception of Nepal as an investment destination. It also expressed concern that the proposal would negatively impact domestic capital mobilization, investment from the Non-Resident Nepali (NRN) community, and the management of Foreign Direct Investment (FDI).
“The implementation of this proposal would shake investor confidence in Nepal’s private sector industries and send a damaging signal to foreign investors regarding the country’s investment environment,” IPPAN added. “If foreign investors, who invested in Nepal based on existing legal frameworks, find themselves unable to liquidate or repatriate their investments, it will severely hinder future foreign investment.”
IPPAN emphasized that such a move could undermine the government’s foreign investment promotion policies and its broader objectives of capital market reform and economic transformation.
“This proposal, if pursued, will directly contradict the government’s stated goals of strengthening Nepal’s capital markets and attracting FDI,” the organization said.
The association has urged regulatory bodies, including SEBON, to reconsider the implications of CDSC’s proposal and engage in a more consultative and transparent process with stakeholders.
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