The Securities Board of Nepal (SEBON) has halted the approval of public issuance of bonds and mutual funds for the past nine months.

The last approval granted by SEBON was on December 18, 2018, when Nepal Investment Mega Bank was authorised to issue 10-year bonds.

The preceding day on December 17, Kumari Capital Limited received approval to offer units of Kumari Sabal Yojana (KSY).

Since then, SEBON has not approved issuance of any new bond or mutual fund.

Currently, seven companies are awaiting approval for the issuance of 17,900,000 units of bonds. These companies include ICFC Finance, Prime Commercial Bank, Nepal SBI Bank, Rastriya Banijya Bank, Nabil Bank, Everest Bank, and Citizens Bank International. Notably, Rastriya Banijya Bank submitted its application on August 30, 2022, but is still pending approval.

For the mutual fund sector, nine companies are awaiting approval to issue a total of 795,000,000 mutual fund units. These companies include NIC Asia Capital, Himalayan Capital, NMB Capital, Prabhu Capital, Nabil Investment Banking, Muktinath Capital, Sanima Capital, Global IME Capital, and Garima Capital.

SEBON, the capital market's regulatory body, has been without a chairman since January 5, 2024.

Currently, Mahesh Baral, joint secretary of the Ministry of Finance, is serving as the interim chairman of the Board.

Under the Securities Act, 2063 BS, if the SEBON chairman's position becomes vacant, a member representing the Ministry of Finance assumes the role of interim chairman.

Dr. Nabaraj Adhikari, executive director and spokesperson for SEBON, said that the board is now prepared to resume the public issue approval process according to Chairman Baral's advice.

"Following the directives of the Public Accounts Committee of the Federal Parliament, we will proceed with granting permissions for Initial Public Offerings (IPOs), rights shares, and the approval of bonds and mutual funds, which have been delayed for a long time," Adhikari said. "According to the Public Accounts Committee, there is no requirement to halt the approval process for bonds and mutual funds.”

The prolonged delay has led to increased dissatisfaction among investors. The primary market remains inactive, with no new approvals for bonds or mutual funds since January, though some companies have received approval for IPOs and rights shares.

Investor Dambaru Ballabh Ghimire, who relies on the primary market for initial investments, expressed concern about the lack of new public issues.

“Currently, interest rates on bank deposits are low. If bonds with higher interest rates are introduced, they will attract more investors,” he said. “Mutual funds act as institutional investors in the securities market, and their entry should be facilitated.”

Ghimire urged SEBON to resolve the approval process to rejuvenate the primary market.