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Published on: 2017-01-12     811 times read    0  Comments

'C' Listed FIs in ASBA from mid-February

January 11: Securities Board of Nepal (SEBON) is preparing to provide approval to 'C' listed financial institutions (FIs) for ASBA (Application Supported by Blocked Amount) from mid-February 2017. The board which has approved only 'A' and 'B' listed BFIs for ASBA is providing the approval to 'C' listed FIs considering the request of Nepal Financial Institutions Association (NFIA). The association had requested SEBON to grant approval to 'C' listed BFIs for ASBA implementation.

"In the initial phase, the board in order to map the success of ASBA system has given approval to commercial banks and development banks as a trial," said Niranjan Ghimire, Assistant Spokesperson of SEBON. He added "Thus, the decision has been taken considering the demand of NFIA to implement ASBA from 'C' listed as well." According to a source, the board is planning make ASBA mandatory by including 'C' listed FIs in the system from mid-February.

On January 10, NFIA submitted memorandum to SEBON, Ministry of Finance and Nepal Rastra Bank demanding to include 'C' listed financial institution in ASBA system. The association also submitted the memorandum to Minister of Finance, governor, and chairman of Nepal Chartered Accountant Association. SEBON took a decision of giving approval to 'C' listed FIs for ASBA implementation from mid-February after a day of submission of the memorandum.

Under the ASBA system, general investors can apply for initial public offering (IPO) directly through their bank accounts and an IPO applicant's account doesn't get debited until shares are allotted to them. Moreover, ASBA is an application containing an authorization to block the application money in the bank account, for subscribing to an issue.

The BFIs that were granted approval from SEBON for ASBA includes 18 commercial banks and 9 development banks. SEBON is planning to implement ASBA through all the BFIs so that to provide easy services to the customers.

The board informed of receiving additional few application from the BFIs and few in the process. The ASBA system is being implemented in order to make the securities issuance faster and transparent providing ease to general investors while trading securities. According to the board, the system will not be made mandatory but optional in its initial phase.  

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