Chapter-5

Chapter-5
26 Provisions Relating to the Listing and Operation of the Transaction of
Securities
2722. To Submit an Application for the Registration of Securities : (1) A
Corporate Body shall apply to the Stock Exchange in form No. 1 of
Schedule-8 for listing the shares and along with the listing fee pursuant
to Schedule-9 in form No. 2 of Schedule-8 for the registration of
debenture, bond, unit and other Securities.
(2) The other statements and documents to be enclosed with the
application for listing the Securities shall be as prescribed in the Byelaws
of the concerned Corporate Body.

26 Amended by Second Amendment.
27 Amended by Second Amendment.
28 23. Listing and Renewal of the Securities : (1) After having received the
application for listing the Securities pursuant to Rule 22, the Stock
Exchange shall, upon making the necessary inquiry and if deemed
appropriate to list the Securities having registered the Securities within
thirty days from the date of receipt of application provide the
information to the applicant in format of Schedule-10 and if the
Securities can not be listed the information to that effect shall have to be
given to the applicant.
(2) The Corporate Body which has listed the Securities pursuant
to Sub-rule (1) shall, having paid the annual fee as prescribed in
Schedule-9, renew the listing of Securities within Three months from the
date of expiry of each fiscal year.
(3) The Securities which is not renewed pursuant to Sub-rule (2)
is not allowed to exchange.
(4) Notwithstanding anything contained in sub-rule (1) and (2)
the Stock Exchange may make separate provisions for the Transaction
of Securities which have obtained the concession as not be listed
pursuant to the Act.
29 23A. To Conclude an Agreement: (1) The Stock Exchange shall, before
listing the Securities pursuant to Rule 23, conclude an agreement with
the Corporate Body which have causes the listing of Securities. In such
agreement, the Corporate Body shall have to expressed the commitment
that the concerned Corporate Body shall forth with give the notice or
information that affects transaction price of Securities to the Stock
Exchange, that such notice or information shall be made public so that
all the concerned parties get notice of it, and that it shall assist in the acts

28 Amended by Second Amendment.
29 Inserted by First Amendment.
of regulating or causing to regulate and manage the Transaction of their
own Securities to be carried out through the Stock Exchange.
(2) Having made the listing of the Securities by concluding an
agreement pursuant to sub-rule (1), the Stock Exchange shall inform the
Board of such matters and shall also publish the same in the news papers
to inform the investors.
3023B. To Give Notice: The Corporate Body which 31has listed its Securities
shall give the notice of the following subjects to the Stock Exchange
from time to time:-
(a) If it has to amend the Memorandum or Article of Association,
(b) If it has to distribute interim dividend in the Securities,
(c) If it has to distribute bonus share as profit,
(d) If the transfer of ownership, renewal unification of division of
the Securities is to be stopped,
(e) If the business of the Corporate Body is to be stopped due to
natural calamities, accidental event, lock-out or any other causes.
24. To Submit Statements:
32 (1) A Corporate Body shall, in addition to the
Statement of income and expenditure of past year, balance-sheet of
profit and loss and yearly progress report, submit the following fiscal
statements to the Board and concerned Stock Exchange within four
months from the expiry of fiscal year :-
(a) Statements relating to the cash flow of previous year,
(b) Statements relating to the production capacity or transaction
capacity of the Corporate Body,

30 Inserted by First Amendment.
31 Amended by Second Amendment.
32 Amended by Second Amendment.
(c) Statements relating to purchase, sale and stock,
(d) Statements of main exported and imported items,
(e) Statements relating to income and expenditure, if the
Transaction has carried out in foreign currency,
(f) Transaction carried out by itself, opinion of management on
it, in case more than twenty five percent of differences arise
in production or transaction capacity of the Corporate Body,
the comment of management on it.
(g) Other statements as prescribed by the Board or Stock
Exchange.
(2) In addition to the statements to be submitted in accordance to
Sub-rule (1), the agenda submitted to the general assembly, subject of
discussion and the full statements of decision made in the general
assembly to the 33Board and Stock exchange market within seven days
of the completion of general assembly.
(3) In addition to the statements submitted pursuant to sub-rule
(1), each year, within one month from the expiry of half yearly time
period, shall have to be submitted the half yearly progress report along
with the activities of such period.
(4) In case the ownership of shares taken by any Board of
Directors is changed or in case the number of shares taken by any Board
of Director is changed, the notice to that effect shall have to be given to
the 34Board and Stock Exchange Market.
(5) In case any Corporate Body made changes in its property as
affecting any type of effect to the value of Securities listed by it or
Transaction or conclude any agreement or contract relating to the

33 Amended by Second Amendment.
34 Amended by Second Amendment.
management, the information therefor shall have to be given to the
35Board and Exchange Stock Market.
(6) Notwithstanding anything mentioned elsewhere in this Rule,
the Board and Stock Exchange may demand the necessary statements,
data or information to the concerned Corporate Body in relation to the
Securities listed to it and to provide such statements, data or information
to the 36Board and Stock Exchange Market shall be the duty of
Concerned Corporate Body.
25. Responsibility to Submit the Statements: In case any loss or damage
occurred to any investor, by the reason of not sending the statements,
data or information in time or if sent in false or incorrect manner by the
authority of concerned Corporate Body which has to sent the statements,
data or information relating to the Securities in accordance to Rule 24
he/she shall be responsible personally or collectively.
26. Not to be Carried Out Internal Transaction: The person involved to
the management of any Corporate Body shall not carry out the internal
Transaction with the objective of benefiting to him/her or any person
related with him/heron the basis of internal information or messages.
3726A. To Conclude a Contract : (1) Prior to exchange the Securities with the
customer, the Securities Entrepreneur shall have to conclude a contract
with the customer in prescribed format remaining under the terms and
conditions as provided in the Bye-Laws of concerned Stock Exchange.
(2) The Securities Entrepreneur shall give the receipt or evidence
of the Securities taken for sale from the customer and shall have to up
date the record therefor.

35 Amended by Second Amendment.
36 Amended by Second Amendment.
37 Inserted by Second Amendment.
3826B. The Board may Prescribe the Entrepreneurial Code of Conduct to
be followed by the Entrepreneur (1) The Board may prescribed the
Entrepreneurial Code of Conduct to be followed by the Securities
Entrepreneur while carrying out the Transaction of Securities to make
the Exchange of Securities pure, healthy and systematic.
(2) Before granting the membership to the Securities
Entrepreneur, the Stock Exchange may cause the necessary bond as to
follow and cause to be followed the Entrepreneurial Code of Conduct as
prescribed in Sub-rule (1).
3926C. To Provide to view or Copy the Particulars and Documents Relating
to the Securities: In case an investors desires to view or copy or
particulars and documents relating to the Securities remained in
possession of Stock Exchange except the particulars relating to the
Transaction of Securities made by the customer or Securities
Entrepreneur, it shall have to give to see or copy by taking the fee as
prescribed in the Bye-Laws of the concerned Stock Exchange.
4026D. To Make Insure the Transaction of the Securities: The Securities
Entrepreneur shall insure the Transaction of Securities as prescribed by
the Board.
27. To Publish the Particulars: The Stock Exchange shall publish the
particulars of the listed Securities and information relating to the
Securities for the information of investors.
4127A. Transfer of the Securities: (1) Where the Securities listed in the Stock
Exchange have been purchased and sold through the.

38 Inserted by Second Amendment.
39 Inserted by Second Amendment.
40 Inserted by Second Amendment.
41 Inserted by First Amendment.
42…………..Securities Dealer and therefore a correspondence is made
from the Stock Exchange, appending thereto the document of sale and
certificate of the Securities has been received for the transfer of such
Securities, by cancelling the name of the seller, into the name of the
buyer.
(2) Where a shareholder or 43Securities Entrepreneur which has
obtained membership by unifying or spicing the shares mentioned in the
Share certificate and changing into the prescribed lot, demands for
separate certificates the concerned corporate Body shall, after receiving
fee as per rule, shall issue separate certificates.
(3) If a person who has purchased securities desires to sell such
securities before transferring such securities in to his name and submits
an application along with the documents he has obtained for the purpose
of selling the securities and the certificate of securities, it shall be
certified that such securities are registered in the Corporate Body.
(4) Where a person has sold the securities into his/her name, to
any other before maintenance of final records in his/her name and if an
application, appending thereto the documents so sold and the certificate
of securities, the concerned Corporate Body shall directly transfer such
securities into the name of last buyer.
(5) Notwithstanding anything contained in sub-rule (1), (2), (3)
and (4), the concerned Corporate Body may refuse to transfer the
securities in the following conditions :-
(a) Where a court or officer of competent authority has
suspended the transfer of the Securities,

42 Deleted by Second Amendment.
43 Amended by Second Amendment.
(b) Where the purchase and sale have been made in less
number than the minimum unit prescribed by the
Corporate Body.
(c) Where the purchase and sale have been made so that it
exceeds the maximum number which a person can hold
into his name.
4427B. Declaration of the Interest, Dividend or Bonus Share : The interest,
dividend or 45bonus share in the Securities shall be provided to the
person who hold the ownership of the Securities at the time of the
46declaration of its interest, dividend or bonus share.
4727C. Transaction of Securities may be Carried out Outside the Stock
Exchange : In case more than Five percent of shares issued by a listed
Corporate Body is to be traded in a lot such Transaction may be carried
out side the Stock Exchange.
Provided that, such transaction shall, after obtaining the prior
approval of the Stock Exchange in writing, be carried out through a
48Securities Entrepreneur which has obtained the membership.
4928. To Submit an Application to be registered as Securities
Entrepreneur: (1) The Corporate Body desirous to carry out the
Transaction of Securities as Securities Entrepreneur pursuant to Section
18 of the Act shall submit an application to the Board in format of
Schedule-11 along with the fee as prescribed in Schedule-12.
(2) In the Memorandum and Article of Association which has
submitted the application pursuant to Sub-rule (1) or in the law

44 Inserted by First Amendment.
45 Amended by Second Amendment.
46 Amended by Second Amendment.
47 Inserted by First Amendment.
48 Amended by Second Amendment.
49 Amended by Second Amendment.
incorporating such Corporate Body there must be the main objective of
such Corporate Body as carrying out the Transaction of Securities.
Provided that in the case of bank or financial institution, this
Regulation does obstruct to grant the certificate as Securities
Entrepreneur even if the Transaction of Securities is secondary objective
than its main objective.
(3) In case any changes statement has been changed in the
statements submitted along with the application the concerned Securities
Entrepreneur shall submit the notice therefor to the Board within seven
days.
5029. Registration of the Securities: (1) After having received the application
in accordance to Rule 28, the Board shall, upon taking the necessary
inquiry pursuant to Section 19 of the Act, if deemed necessary to
register such Corporate Body as Securities Entrepreneur, having register
such Corporate Body within thirty days from the date of receipt of the
application, grant the Certificate of Securities Entrepreneur as to carry
out any or more than one of the following functions:-
(a) To purchase, sale or exchange the Securities in the name
of customer.
(b) To carry out the Transaction of any one or more than one
Securities among the treasury bill issued by Government
of Nepal or issued in the Security of Government of
Nepal or mutual fund issued publicly or unit or the
ordinary shares of at least three Corporate Bodies or other
Securities by purchasing or selling in its name or from its
name by the objective of providing liquidity in those
Securities.

50 Amended by Second Amendment.
(c) To buy some or all newly issued Securities in its own
name with the object of selling through the Stock
Exchange Securities issued either through public issue
method or circulation method by a Corporate Body, to
carry out the Transaction of Securities through Broker in
the name of customer or its own by concluding
investment arrangement contract with customer with the
objective of making investment arrangement.
(d) To provide the pre issue and post issue services to
arrange the sales management of Securities to be newly
issued either through public issue method or circulation
method by a Corporate Body and to under write the
issued Securities.
(e) To register the newly issued shares, to take responsibility
relating to cancelling the name and transfer into the
record and transfer of the securities, to act as a trustee of
the securities, to provide concealing service relating to
the securities as Entrepreneur, to carry out other functions
prescribed by the Board by taking approval of
Government of Nepal and to carry out other functions
relating to the Securities.
(2) While examining the application pursuant to sub-rule (1) if
needed any particulars or document in addition or if deemed necessary
to cause to omit or submit any matter in the application the Board shall
give an order to the applicant and only after the fulfillment of the acts as
per the order given in such manner the Board shall take the decision as
to register the name of applicant as Securities Entrepreneur.
(3) While examining pursuant to sub-rule (1), in case it can not be
registered as Securities Entrepreneur the Board shall give the notice
thereof with reason within Thirty days from receipt of application.
(4) Notwithstanding anything mentioned in sub-rule (1), the
certificate as to carry out other functions except the function of Clause
(a) shall not be granted to the Securities Entrepreneur who acts as a
Broker.
5130. To Take Certificate who is Carrying out the Transaction of
Securities : The person, firm, company or Corporate Body carrying out
the Transaction of Securities by obtaining the membership of Stock
Exchange at the time of commencement of these Rules shall have to
obtain the certificate by registering name into the Board as the Securities
Entrepreneur.
5231. Provision Relating to the Capital of the Corporate Body Which
Carry out the Transaction of Securities : (1) The authorised capital
and paid up capital of the Corporate Body desirous to be registered as
Securities Entrepreneur should be as prescribed in Schedule-14.
(2) In the case of Corporate Body desirous to carry out more than
one function of Transaction the paid up capital should be different for
the different function as prescribed by the Board.
5332. The Qualification for Securities Entrepreneur : (1) To be registered
as the Securities Entrepreneur, the qualification of Board of Directors
and Executive Chief of the Corporate Body or the Chief Employee who
takes the responsibility for carrying out the Transaction of Securities
shall be as follows :-

51 Amended by Second Amendment.
52 Amended by Second Amendment.
53 Amended by Second Amendment.
(a) Must be a Nepalese citizen, except provided the approval
by Government of Nepal,
(b) Must have attained 21 years age,
(c) Must have obtained an experience of two years in the field
of industry and commerce by obtaining the bachelor
degree in the field of business administration or commerce
or economics or must have five years of working
experience of Stock Exchange, bank, financial institution
or insurance company,
(2) Notwithstanding anything mentioned in sub-rule (1), the
qualification of this Rule shall not be essential to the person who is
carrying out the Transaction by obtaining the membership of the Stock
Exchange at the time of commencement of this Act.
32A 54……………
5533. Disqualification : The Board of Directors or Executive Chief of the
Corporate Body desirous to be registered as the Securities Entrepreneur
shall not have to the following disqualification :-
(a) Should not be mad or insane,
(b) Should not be insolvent,
(c) Not yet lapsed Five years of one has served imprisament
by the decision of court of law in a criminal offence.
(d) Should not be a member of the Corporate Body which
has obtained the certificate of Securities Entrepreneur,
(e) Should not be a member of other Corporate Body which
have obtained the license of Securities Entrepreneur,

54 Deleted by Second Amendment.
55 Amended by Second Amendment.
(f) Should not be involved in contraction or other personal
interest of the corporate body which have obtained the
license of Securities Entrepreneur.
5634. Renewal of the Securities Entrepreneur Certificate: The Securities
Entrepreneur shall have to renew the Securities Entrepreneur
Registration Certificate by submitting the application to the Board along
with the fee as prescribed in Schedule-12 in format of Schedule-15 to
renew the Securities Entrepreneur Registration Certificate within fifteen
days from the date of expiry of completion of fiscal year.
(2) In case the Securities Entrepreneur registration Certificate
could not be renewed within the time limit of sub-rule (1), the Securities
Entrepreneur may submit an application to the Board along with twenty
five percent fee in addition to renewal fee mentioning the reasons
therefor within 6 months from the expiry of such time limit to renew the
Securities Entrepreneur Registration Certificate.
(3) The Board shall cancel the Securities Entrepreneur
Registration Certificate of such Securities Entrepreneur in case the
Securities Entrepreneur does not submit an application to renew the
Securities Entrepreneur Registration Certificate within the time limit of
sub-rule (1).
(4) The Corporate Body whose Securities Entrepreneur
Registration Certificate has been cancelled is not allowed to carry out
the transaction of Securities.
34A 57……………….
34B 58…………..

56 Amended by Second Amendment.
57 Deleted by Second Amendment.
58 Deleted by Second Amendment.
5935. The Securities Entrepreneur shall Deposit the Security : (1) The
Securities Entrepreneur shall, prior to carry out the Transaction of
Securities, deposit the amount as prescribed by the Board in any
commercial bank as prescribed by the Board as Security, such amount
shall only be use for the purpose of payment of the liability in relation to
the Securities.
(2) While prescribing the amount of security pursuant to Sub-rule
(1), it shall be prescribed on the basis of types of Transaction, number of
transaction and the amount of Transaction to be carried out by the
Securities Entrepreneur.
(3) Notwithstanding anything mentioned in sub-rule (1) and (2),
the Board may provide the exemption to the Securities Entrepreneur
which is carrying out the Transaction of Securities by depositing the
security as prescribed by the Board before the commencement of this
Regulation as not to deposit separate security.
6036. Service Fee: (1) The Securities Entrepreneur may take the service fee as
prescribed in Schedule-16 to the customer for providence the service of
the Transaction of Securities or related thereto.
(2) The Securities Entrepreneur shall deposit an amount from the
amount of service fee pursuant to sub-rule (1) to the concerned Stock
Exchange as prescribed in the Bye-Laws of the concerned Stock
Exchange.
6137. The Statements and Reports to be Submitted by the Securities
Entrepreneur : The Securities Entrepreneur shall submit the following
financial statements in addition to the balance-sheet of profit and loss
account of past fiscal year and financial report to the Board :-

59 Amended by Second Amendment.
60 Amended by Second Amendment.
61 Amended by Second Amendment.
(a) Statements relating to the cash flow,
(b) Statements relating to the Transaction of Securities,
(c) Report relating to the concept or comment of
management relating to the Transaction of Securities,
(d) Other statements as prescribed by the Board.
38. 62
. . . . . . .
39. 63
. . . . . . .
40. 64
. . . . .
41 65
. . . . . .
6642. The Board May Prescribed the Format of Record : (1) The Board
may be prescribed the format of statements, data or notice relating to the
Transaction of Securities to be maintained by the Corporate Body which
have listed its Securities, Stock Exchange and Broker working as
Securities Entrepreneur, Market Maker, Securities Entrepreneur, issuing
and sales manager and Corporate Body carrying out other functions
relating to the Securities.
(2) It shall be the duty of all concerned to maintain the record up
to date by carrying out the Transaction in format prescribed pursuant to
sub-rule (1).
43. To insect and inquire: (1) Board may inquire through member, officer,
persons or other person of corporate body, of the application of
information is available against the action against pursuant to Act and
Rules which is done by securities registered autonomy body, capital

62 Deleted by Second Amendment.
63 Deleted by Second Amendment.
64 Deleted by Second Amendment.
65 Deleted by Second Amendment.
66 Amended by Second Amendment.
market of person who have obtained membership of board, firm of
autonomous body.
(2) To be prescribed of appointed the inspection or inquire
authority pursuant to Sub-section (1), the board also may designate the
method and procedure of such inspects or inquires officer
(3) The authority person who appoint or inspect in pursuant to
Sub-section (1), should submit their report in board.
(4) The basis of report pursuant to Sub-section (1), the board may
cancel the registration of autonomous body, suspend or cancel the
concerned license of securities market or may order to cancel the
registrations of concerned who have achieved the membership of
securities market, firm company autonomous body.
(5) To give order pursuant to Sub-section (4), the body has to
give chance to submit their clearance about their charge for concerned
person, firm, company or autonomous body.
44. Delegation of Power: (1) The board may delegate some of all not of its
powers to any Sub-committee chairperson or member.
(2) The chairperson may delegate power in own responsibility to
officer personal as per necessary.
45. Not to be provided insider news: Member of board, member of
autonomous body or concerned any person should not provide the
publicly unpublished document, information or news for insider dealing.
Provided that, any transaction which is carried as regularity of
office shall not see deemed to be violation of insider trading
46. Alterations and change in the schedules: Government of Nepal may
publishing notification in the Nepal Gazatte effect necessary alteration
or change in the schedule.
6747. Framing and Enforcement of Directives: The Board may frame and
issue directive order to make the procedures relating to the well
management of the Transaction of Securities by the efficient
implementation of the Act and this Regulation. It shall be the duty of all
the concerned to abide by the directives so issued
Note: Schedule is not included

67 Inserted by First Amendment.