Stakeholders of the stock market today urged the Securities Board of Nepal (Sebon) to check the insider trading in the share market.
Stating that the insider trading was rampant in banking and financial institutions (BFIs), they asked the capital market regulator to prepare a database of the individuals concerned with the vital financial information of the respective company. They also claimed that a handful of investors, who have access to the information are benefitting from the stock market, while majority of investors have been cheated.
Commenting at an interaction organised by the Sebon to collect recommendations for the security-sector policies for the next fiscal year 2019-20, the investors also blamed the regulatory authority’s staff for their involvement in the insider trading. “The media has also been used as a tool in the misuse of information so it should be controlled by including some additional provisions in the Sebon rules,” they said, blaming the regulator.
Asking the regulator to bring strong regulation to check the insider trading, they also shared their concern of the promoter shares. “There is a growing trend in the promoters to sell their part of shares immediately after three years and ousting themselves from the company,” they said, adding that this trend has increased the fear of insecurity among the investors of the real sector companies. According to the rule, promoters share has a lock in period of three years after they were listed in the Nepal Stock Exchange (Nepse).
They also suggested that the promoters should not be allowed to sell all the shares at once, instead there should be a rule to allow the sale of only a small part of their shares in a year.
Stating that the insider trading was rampant in banking and financial institutions (BFIs), they asked the capital market regulator to prepare a database of the individuals concerned with the vital financial information of the respective company. They also claimed that a handful of investors, who have access to the information are benefitting from the stock market, while majority of investors have been cheated.
Commenting at an interaction organised by the Sebon to collect recommendations for the security-sector policies for the next fiscal year 2019-20, the investors also blamed the regulatory authority’s staff for their involvement in the insider trading. “The media has also been used as a tool in the misuse of information so it should be controlled by including some additional provisions in the Sebon rules,” they said, blaming the regulator.
Asking the regulator to bring strong regulation to check the insider trading, they also shared their concern of the promoter shares. “There is a growing trend in the promoters to sell their part of shares immediately after three years and ousting themselves from the company,” they said, adding that this trend has increased the fear of insecurity among the investors of the real sector companies. According to the rule, promoters share has a lock in period of three years after they were listed in the Nepal Stock Exchange (Nepse).
They also suggested that the promoters should not be allowed to sell all the shares at once, instead there should be a rule to allow the sale of only a small part of their shares in a year.
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