The eighth amendment in the Securities Issuance and Allotment Guidelines has paved the way for the company with joint investment from the Government of Nepal and Non-Resident Nepalis (NRNs) to participate in the country’s capital market.

The guidelines has outlined procedures for share issuance and transaction involving such a company. 

General investors have been barred from applying for or trading these shares. The company will have to issue the share exclusively to the NRNs in a range from 10 to 49 percent of its authorised capital.

Additionally, the joint investment company has been prohibited from issuing shares with a premium. 

Applicants must hold a bank account in Nepalese rupees with an ASBA-authorised bank or financial institution in Nepal.

To ensure transparency and legal compliance, the directive stipulates that such companies must publish a call for applications at least seven working days before the start of sales. The application period for share issuance should remain open for a minimum of four working days.

If all shares are not sold within this period, the company may extend the application period by up to 15 additional days from the initial opening date.

Applicants can apply for a minimum of 1,000 shares and in multiples thereof.

Moreover, the directive ensures that after shares are distributed, the joint investment companies will need to submit applications to the central depository company for dematerialization within seven working days of the distribution.

The companies will also have to publish all relevant details on their websites and in national newspapers for investor awareness.

The shares issued by joint investment companies cannot be traded within one year of distribution. However, promoter shares’ will be governed under specific provisions, allowing for some exceptions.