Skip to contentSkip to left sidebar Skip to footer

Author: mn@admin

Chapter-2 Classification of motor vehicles

3. Heavy motor vehicle: A motor vehicle set forth in Clause (a) of Schedule-1 and of which weight is more than ten tons shall be called as a heavy motor vehicle.

4. Medium motor vehicle: A motor vehicle set forth in Clause (b) of Schedule-1 and of which weight is more than four tons and less than ten tons shall be called as a medium motor vehicle.

5. Light motor vehicle: A motor vehicle set forth in Clause (c) of Schedule-1 and of which weight is less than four tons shall be called as a light motor vehicle.

6. Public motor vehicle:
(1) A motor vehicle having obtained the certificate of registration to operate the transport service shall be called as a public motor vehicle.
(2) The public motor vehicles shall be divided into two types namely the passenger motor vehicles and the cargo motor vehicles.
(3) The passenger public motor vehicles shall be divided into day and night services and categorized into the following classes and be given the license to operate the transport service: (a) Direct service; (b) Express service; and (c) Local service.
(4) The standards, speed and other necessary provisions of the public motor vehicles divided pursuant to Sub-section (3) shall be as prescribed.
(5) For the identity of a public motor vehicle, the vehicle shall have such a number plate on its front and rear side as set forth in Clause (a) of Schedule-2.

7. Tourist motor vehicle: (1) A public motor vehicle having obtained the certificate of registration to provide the transport service to foreign tourists shall be called as a tourist motor vehicle. (2) For the identity of a tourist motor vehicle, the vehicle shall have such a number plate on its front and rear side as set forth in Clause (b) of Schedule-2.

8. Private motor vehicle: (1) A motor vehicle having obtained the certificate of registration for private use shall be called as a private motor vehicle. (2) No private motor vehicle shall be used for the transport service. (3) For the identity of a private motor vehicle, the vehicle shall have such a number plate on its front and rear side as set forth in Clause (c) of Schedule-2.

9. Government motor vehicle: (1) A motor vehicle registered in the name of any government office and owned by the Government of Nepal and having obtained the certificate of registration shall be called as a government motor vehicle. (2) For the identity of a government motor vehicle, the vehicle shall have such a number plate on its front and rear side as set forth in Clause (d) of Schedule-2.

10. Corporation motor vehicle: (1) A motor vehicle registered in the name of anybody corporate fully, mostly or partly owned by the Government of Nepal and having obtained the certificate of registration shall be called as a corporation motor vehicle. (2) For the identity of a corporation motor vehicle, the vehicle shall have such a number plate on its front and rear side as set forth in Clause (e) of Schedule-2.

11. Motor vehicle with diplomatic facility: (1) A motor vehicle registered in the name of any diplomatic mission or office, plan, body or person enjoying diplomatic facility and having obtained the certificate of registration shall be called as a motor vehicle with diplomatic facility. (2) For the identity of a motor vehicle with diplomatic facility, the vehicle shall have such a number plate on its front and rear side as set forth in Clause (f) of Schedule-2.

12. Prohibition on use for other purpose: (1) A motor vehicle which has been registered for any one purpose shall not be used for any other purpose. (2) A motor vehicle which has been provided with a facility of customs duty exemption shall not be used for any purpose other than that for which the customs duty exemption has been granted.

Chapter-3 Provisions relating to motor vehicle registration

13. Entry to be registered: (1) A person, firm or company importing a motor vehicle from abroad shall make an application to the police office situated in the place of entry of such a motor vehicle into Nepal for the registration of entry of such a motor vehicle.

(2) If an application is made for the registration of entry pursuant to Sub-section (1), the police office shall, upon examining the evidence of purchase of such a motor vehicle and the related documents, register the entry of such a motor vehicle for fifteen days and give a certificate of the entry registration to the person, firm or company having imported such a motor vehicle, and send the description of such a motor vehicle to the concerned Transport Management Office promptly.

14. Motor vehicle to be registered: (1) A person, firm or company purchasing a motor vehicle or importing it from abroad or an agent selling or distributing a motor vehicle shall get the motor vehicle registered with the competent authority no later than fifteen days after the date of bringing it into Nepal upon paying customs duty. (2) No one shall ply or cause to be plied any motor vehicle without getting it registered pursuant to Sub-section (1).

15. Application to be made for the registration of motor vehicle: (1) If a motor vehicle is required to be registered pursuant to Section 14, a person, firm or company or agent who has purchased the motor vehicle shall, where such a motor vehicle has been purchased within Nepal, make an application, accompanied by the evidence of such purchase, and a person, firm or company or agent who has imported such a motor vehicle from abroad shall, where such a motor vehicle has been imported from aboard, make an application, accompanied by the evidence of payment of customs duty of that motor vehicle, and other related documents, to the competent authority in the prescribed format and accompanied by the prescribed fees. Provided that, no registration fee shall be levied for the registration of a motor vehicle with diplomatic facility.

(2) A person who makes an application pursuant to Sub-section (1) shall attach with the application a certified copy of the certificate ofcitizenship of Nepal and his or her three passport size photographs recently taken.

(3) In the case of a governmental motor vehicle, the application shall also be accompanied by a letter of the governmental office in whose name the motor vehicle is going to be registered, and in the case of a motor vehicle with diplomatic facility, it shall also be accompanied by a recommendation letter of the Ministry of Foreign Affairs, the Government of Nepal. If a motor vehicle with diplomatic facility is to be registered in the name of any person, such a person shall attach a copy of his or her passport or citizenship and three passport size photographs.

(4) If a foreign citizen who carries on any business and transaction within the State of Nepal intends to get any motor vehicle registered for his or her personal use, a recommendation letter of the concerned diplomatic mission shall also be attached, in addition to the matters set forth in Subsections (1) and (2).

(5) If a motor vehicle is required to be registered in the name of a minor, his or her guardian shall, on his or her behalf, make an application, accompanied by three passport size photographs each of the minor and the guardian and a certified copy of citizenship.

16. Motor vehicle registration certificate: (1) If an application is made for the registration of any motor vehicle pursuant to Section 15, the competent authority shall make necessary inquiry into the matter, register such a motor vehicle in the name of the applicant and issue the registration certificate in the form as referred to in Schedule-3. Provided that, any motor vehicle with more than fourteen seats and with gross weight of four tons or more shall not be registered as a private motor vehicle except in the name of a national or international organization

established with social, religious, benevolent and educational purpose or a body corporate established under the laws in force. (2) In registering a motor vehicle in the name of a minor, the motor vehicle registration certificate shall also contain the guardian’s name and be signed by the guardian, as well. (3) The registration certificate shall contain the total laden weight of a motor vehicle as specified in the technical specification of the motor vehicle issued by its manufacturer as the weight of that motor vehicle; and in so specifying the weight of the motor vehicle, the unladen weight and the laden weight must be separately and clearly specified. (4) The registration certificate shall remain valid for a period of one year after the date of its issuance.

17. Road worthiness certificate to be issued: (1) Prior to registering any motor vehicle pursuant to Section 16, the competent authority shall, subject to the criteria prescribed pursuant to Section 23, examine such a motor vehicle as to whether it is in good condition that it can be plied and register such a motor vehicle only when it is in good condition that it can be plied and issue the certificate of registration. In so issuing the certificate of registration, the certificate of road worthiness of such a motor vehicle shall also be issued to the owner of such a motor vehicle. (2) The road worthiness certificate issued pursuant to Sub-section (1) shall have to be affixed on the motor vehicle.

18. Joint registration: If an application is made by two or more persons to the competent authority pursuant to Section 15 for the joint registration of any motor vehicle, the competent authority shall make necessary inquiry into the matter, register such a motor vehicle jointly in the names of these persons and issue the registration certificate as referred to in Section 16 to them.

19. Provisional registration: Any motor vehicle may be registered provisionally in the following circumstance: (a) if there exists a reasonable reason for the failure of the importer of the motor vehicle to appear to get the motor vehicle registered within the time limit within which it is required to be registered; (b) if it is not possible to immediately produce the imported motor vehicle for registration due to defects in the engine, chassis or any other spare parts of the motor vehicle; or (c) if it is not possible to immediately register the motor vehicle due to the arising of an insurance claim dispute with the manufacturer company or sales agent of the motor vehicle or insurance company owing to the occurrence of the condition set forth in Clause (b).

20. Application for provisional registration: (1) If there occurs any circumstance set forth in Section 19, the importer of a motor vehicle or his or her nearest heir in his or her absence shall make an application, accompanied by the evidence of payment of customs duty of the motor vehicle and other relevant documents, in the prescribed format, along with the prescribed fees, to the competent authority for the provisional registration of the motor vehicle in the name of its importer. (2) In making an application pursuant to Sub-section (1), the applicant shall also attach a certified copy of the certificate of citizenship of Nepal and three copies of recently taken photograph of the person in whose name the motor vehicle is to be registered provisionally.

21. Provisional registration certificate: (1) If any person makes an application for the provisional registration of any motor vehicle pursuant to Section 20, the competent authority shall inquire into whether the motor vehicle can be registered provisionally pursuant to Section 19, register such a motor vehicle provisionally and issue the provisional registration certificate in the form as referred to in Schedule-4.

(2) The provisional registration certificate shall also specify that the word provisional is also to be set down in the number plate of that motor vehicle. (3) The provisional registration certificate may be so issued that it remains valid for a maximum period of six months at one time or at several times.

22.  Motor vehicle to be produced: In making application for the registration of a motor vehicle pursuant to Section 13, 15 or 20, for the transmission of ownership of motor vehicle pursuant to Section 37 and for the alteration in any matter of motor vehicle pursuant to Section 39, the person, firm or company making such an application shall also produce the motor vehicle intended to be so registered, transmitted or altered in any respect.

23. Power to specify criteria for examination of motor vehicles: (1) The Government of Nepal may determine and prescribe necessary criteria on the following matters in order to examine and ascertain whether a motor vehicle is capable of being plied: (a) Mechanical condition of the motor vehicle. (b) Length, breadth, height, structure and body of the motor vehicle. (c) Pollution likely to be generated from the motor vehicle. (d) Period during which the motor vehicle can be plied. (2) In issuing the road worthiness certificate after examining whether a motor vehicle is capable of being plied or issuing the test certificate, the competent authority shall make examination subject to the criteria prescribed pursuant to Sub-section (1).

24. Power to refuse to register motor vehicle: (1) If an application is made for the registration of a motor vehicle, and if upon examining, subject to the criteria as specified in Section 23, whether the motor vehicle is capable of being plied, the competent authority considers that such a motor vehicle is not capable of being plied, the competent authority may refuse to register such a motor vehicle.

(2) If it is refused to register any motor vehicle pursuant to Subsection (1), the competent authority shall give a notice thereof, accompanied by the reason for such refusal, to the applicant.

(3) Notwithstanding anything contained in Sub-sections (1) and (2), if the Department is of the opinion that it is reasonable to stop the registration of any type of motor vehicle to be made under Section 14 for public interest owing to environmental pollution, traffic load, condition of roads, difficulty with vehicular movement or similar other reasons, it may issue an order to any or all Transport Management Offices to stop the registration of such a motor vehicle.

25. Validity of registration: (1) A motor vehicle registered in any one region pursuant to this Act may also be plied in another region.

(2) Notwithstanding anything contained in Sub-section (1), a motor vehicle registered in any one region shall not be allowed to be plied in another region for more than one year consecutively or at several times. Provided that, this restriction shall not apply to a governmental motor vehicle, corporation motor vehicle, motor vehicle with diplomatic facility and motor vehicle with route permit.

26. Information to be given: (1) If a motor vehicle registered in one region enters another region, the owner or driver of the motor vehicle, as the case may be, shall give information thereof to the nearby police office no later than twenty four hours of such entry. (2) If it is required to ply a motor vehicle having entered pursuant to Sub-section (1) for more than thirty days in that region, the owner or driver of the motor vehicle, as the case may be, shall have to obtain permission from the competent authority no later than seven days of the entry into that region.

27. Transfer registration: (1) If it is required to ply a motor vehicle in a region other than the region in which it has been registered for more than the period as set forth in Sub-section (2) of Section 25, the owner of the motor vehicle shall make an application, accompanied by the registration certificate, three recently taken passport size photographs of him or her and prescribed fees, to the competent authority for the registration of transfer. (2) If an application referred to in Sub-section (1) is made and the competent authority, upon making examination of such a motor vehicle subject to the criteria specified pursuant to Section 23, considers it appropriate to make transfer registration, the competent authority shall register the transfer of that motor vehicle and give the registration certificate to the owner of that vehicle.

28. Records of motor vehicle to be maintained: The competent authority shall cause the details of each motor vehicle registered pursuant to this Act, including the name and address of owner, date of registration, and registration number, of the motor vehicle, name of motor vehicle manufacturer, model, year, engine number, chassis number, type and weight of the motor vehicle to be clearly mentioned in the register and maintain records of motor vehicles in an updated manner. The photograph of the owner of the motor vehicle must also be affixed on the concerned page of such a register.

29. Prohibition on plying foreign motor vehicle without obtaining permission: No motor vehicle registered abroad shall be plied within the State of Nepal without obtaining permission pursuant to the laws in force.

30. Permission to ply foreign motor vehicle: If an application is made for permission to ply a motor vehicle registered abroad within the State of Nepal, the competent authority may, upon collection of the prescribed fees, give permission to ply that motor vehicle for a period not exceeding one month. Provided that, such a motor vehicle must not be permitted to operate the transport service within the State of Nepal.

31. Renewal of registration certificate: (1) The registration certificate shall have to be got renewed within three months of the expiration of the time limit set forth in the registration certificate pursuant to Sub-section (4) of Section 16.

(2) The owner of a motor vehicle or a person deputed by him or her shall have to submit the registration certificate, accompanied by the prescribed fees, to the competent authority for the renewal of the registration certificate pursuant to Sub-section (1). Provided that, no fee shall be charged for the renewal of the registration certificate of a motor vehicle with diplomatic facility. (3) If the registration certificate is submitted for renewal pursuant to Sub-section

(2), the competent authority shall have to renew such a registration certificate for other one year.

(4) If the owner of a motor vehicle shows up for the renewal of the registration certificate after the expiration of the time limit referred to in Subsection (1), such a registration certificate shall have to be renewed by collecting from such an owner one hundred percent fees until one year of the expiration of the time limit, two hundred percent fees until two years, three hundred percent fees until three years, four hundred percent fees until four years and five hundred percent fees until five years, in addition to the renewal fees.

32. Power of the competent authority to notify: If the registration certificate of a motor vehicle with diplomatic facility is not submitted for renewal within the period as referred to in Sub-section (1) of Section 31, the competent authority may notify the concerned diplomatic mission, office or person, through the Ministry of Foreign Affairs, to get renewed the registration certificate of such a motor vehicle.

33. Special provision relating to renewal: Notwithstanding anything contained in Sub-section (3) of Section 31, if the owner of a governmental motor vehicle, corporation motor vehicle, motor vehicle with diplomatic facility and private motor vehicle intends to get the registration certificate of his or her motor vehicle renewed for five years at a time and submits the registration certificate, accompanied by the renewal fees chargeable for five years, the competent authority may renew such a registration certificate for five years at a time.

34. Ipso facto revocation of registration certificate: (1) A registration certificate which has not been renewed even within the period as referred to in Sub-section (4) of Section 31 shall ipso facto be revoked. (2) The records of the motor vehicle of which registration certificate has been revoked pursuant to Sub-section (1) shall be crossed off the register. (3) The registration certificate of which records have already been crossed off the register pursuant to Sub-section (2) shall not be renewed.

35. Eligibility for re-registration: If a motor vehicle of which registration certificate has been revoked and records crossed off pursuant to Section 34 is produced for re-registration, such a motor vehicle shall be registered pursuant to Section 16 and another registration certificate shall be given to the motor vehicle owner, by collecting the renewal fees due to be collected pursuant to Section 31 and additional fees as well as a fine that is two-fold of the additional fees referred to in Sub-section (4) of Section 31 for the years after which it has been produced for registration.

36. Information of change in address of motor vehicle owner to be given: (1) In the event of a change in the address of the owner of any motor vehicle registered pursuant to this Act, information thereof, accompanied also by the registration certificate, shall have to be given to the competent authority within one month. (2) Upon receipt of the information as referred to in Sub-section (1), the competent authority shall mention the new address in the registration certificate and also make necessary correction in the register.

37. Transmission of motor vehicle: (1) If the owner of a motor vehicle registered pursuant to this Act transfers his or her ownership in that vehicle to any other person by way of gift or sale or otherwise, the owner shall have to make an application in the prescribed format, accompanied also by the registration certificate and a proof of payment of the motor vehicle tax, to the competent authority for the transmission of that motor vehicle, no later than fifteen days.

(2) The heir whom the ownership in a motor vehicle has to be transmitted to as a consequence of the death of the owner of the motor vehicle shall have to make an application in the prescribed format, accompanied also by an evidence of the death of the owner of the motor vehicle, the registration certificate, a proof of payment of the motor vehicle tax and an evidence proving that he or she is the nearest heir, to the competent authority for the transmission of that motor vehicle, no later than thirty five days after the death of the owner of the motor vehicle.

(3) If an application is made for transmission pursuant to Sub-section (1) or (2), the competent authority shall hold necessary inquiry into the matter and make transmission by indicating the matter of transmission in the registration certificate, and collecting the prescribed fees. Provided that, if an application is made by more than one heir on the equal footing for transmission pursuant to Sub-section (2), the transmission must be made by jointly registering that motor vehicle in the names of all the heirs.

(4) In the event of the transmission of a motor vehicle pursuant to Sub-section (3), the matter that transmission has been made upon the transfer of ownership accordingly must be mentioned in the register. (5) If, in making inquiry in the course of transmitting a motor vehicle pursuant to this Section, the competent authority finds that there is any lawsuit pending as to the title to the motor vehicle, that motor vehicle must not be transmitted to the name of any one pending the final settlement of such a lawsuit.

38. Prohibition on changing registration: Notwithstanding anything contained elsewhere in this Act, the registration certificate must not be issued in such a manner as to change the registration of a motor vehicle having obtained the registration certificate upon being registered as a goods motor vehicle into a passenger motor vehicle.

39. Prohibition on alteration without obtaining approval:

(1) The owner of a motor vehicle owner shall not make any such alteration in the motor vehicle as to change its color, number of seats,  structure, engine or chassis, without obtaining approval of the competent authority. Provided that this Sub-section shall not be deemed to prevent the making of a normal change of spare parts in a motor vehicle.

(2) If a request is made for approval to make an alteration pursuant to Sub-section (1), the competent authority shall make necessary inquiry into the matter, and may, if it thinks appropriate to give approval for such an alteration, give such an approval. Provided that, no approval shall be so given as to change the specification made by the motor vehicle manufacturing company in relating to the structure of the motor vehicle.⊗

(2a)⊗ In giving approval for alteration pursuant to Sub-section (2), there shall be charged the fee which is fifty percent of the fees chargeable for the registration of the motor vehicle.

40. Power to suspend registration certificate:

(1) The competent authority may, in any of the following circumstances, issue an order suspending the registration certificate of any motor vehicle for a period not exceeding the following period:

(a) If it appears that the plying of a motor vehicle may cause a loss of or damage to the body or property of the general public because the motor vehicle is out of order, for a period until the motor vehicle is repaired and maintained satisfactorily, and

(b) If the owner of motor vehicle plies the motor vehicle without fulfilling any terms required to be fulfilled under this Act or any order issued by the competent authority subject to this Act or the ambit of Rules framed under this Act, for a period not exceeding six months.

(2) In issuing an order to the owner of motor vehicle, thereby suspending the registration certificate pursuant to Sub-section (1), the competent authority shall also clearly assign the reason for such suspension.

(3) In the event of suspension of the registration certificate pursuant to Sub-section (1), the competent authority shall have to give information thereof to the concerned police office.

(4) In the event of suspension of the registration certificate pursuant to Sub-section (1), the owner of motor vehicle shall have to surrender the registration certificate to the competent authority no later than seven days of the order issued by the competent authority.

(5) The competent authority shall have to return the registration certificate surrendered by the owner of motor vehicle pursuant to Sub-section (4) after the expiration of the period of suspension of the registration certificate. (6) In returning the registration certificate to the owner of motor vehicle pursuant to Sub-section (5), the competent authority shall cause to be clearly specified the period of suspension and the reason for suspension in the registration certificate and the records thereof to be mentioned also in the register.

41. Revocation of registration certificate: (1) If any motor vehicle registered pursuant to this Act is destroyed in any manner or becomes out of order as not being capable of plying or taken outside Nepal permanently, the owner of such a motor vehicle shall have to make an application, in the prescribed format, accompanied by the registration certificate, to the competent authority for crossing off the records of such a motor vehicle no later than thirty days. Provided that, if it is required to take outside Nepal any motor vehicle which is important archaeologically or any spare parts of such a motor vehicle, its owner shall have to obtain prior approval of the competent authority. (2) If an application as referred to in Sub-section (1) is made, the competent authority shall, if the contents are found true upon necessary inquiry made into the matter, revoke such a registration certificate, mention that matter in the register and cross off the record of such a motor vehicle.

42. Remission of renewal fees: If any motor vehicle registered pursuant to this Act is not capable of plying or being plied for a period exceeding one year because of being seized for any reason or being out of order due to an accident or otherwise and the owner of motor vehicle makes an application setting out that matter, accompanied by the registration certificate and an evidence thereof, the competent authority may seize the registration certificate of such a motor vehicle and remit the renewal fees required to be paid by that motor vehicle owner for a period until the motor vehicle becomes capable of being plied.

43. Issuance of duplicate copy of registration certificate: (1) If the registration certificate is lost or illegible because of being torn or defaced or is destroyed in any other manner, the owner of motor vehicle shall have to make an application, in the prescribed format, accompanied by the prescribed fees, to the competent authority no later than fifteen days after the date of such loss, illegibility or destroy. (2) If the contents are found correct upon necessary examination made in relation to the application made pursuant to Sub-section (1), the competent authority shall have to issue a duplicate copy of such a registration certificate to the owner of motor vehicle. (3) The competent authority shall give information of the issuance of a duplicate copy of the registration certificate pursuant to Sub-section (2) to the concerned police office.

44. Details to be submitted: (1) Any firm, company or agent who imports motor vehicles from abroad shall have to submit the details of the model, engine number, chassis number of each motor vehicle, the type of and name of manufacturer of such a motor vehicle, and also indicating which of such motor vehicles has been sold to whom and when and how many of the motor vehicles imported by him or her are in stock, to the competent authority each month.

(2) The competent authority may demand any other necessary details and documents relating to the import and sale and distribution of motor vehicles, in addition to the details set forth in Sub-section (1) from any firm, company or agent who imports motor vehicles from abroad. It shall be the duty of such a firm, company or agent to provide the details and documents so demanded immediately.

An Act Made to Provide for the Pashupati Area Development Trust

2Preamble: Whereas, it is expedient to make provisions relating to the Pashupati Area Development Trust in order to safeguard, maintain and develop the Lord Pashupatinath area and maintain the decency and convenience of the general people; Now, therefore, be it enacted by His Majesty King Birendra Bir Bikram Shah Dev on the advice and with the consent of the National Panchayat.

2. Definitions

2.1 Unless the subject or the context otherwise requires, in this Act,-

2.1.1 “Pashupati area” means the area within such boundary as may be specified by the Government of Nepal from time to time by publishing a Notification in the Nepal Gazette for the safeguard, maintenance and development of the Pashupati area.

2.1.2 “Trust” means the Pashupati Area Development Trust established under Section 3. 2.1.3 “Patron” means the patron of the Trust.

2.1.4 “Chairperson” means the chairperson of the Trust.

2.1.53 “Council” means the Pashupati Area Development Trust Governing Council formed pursuant to Section 8, for the operation of the Trust.

2.1.64 “Member” includes the vice-chairperson, treasurer, member and member secretary of the Council.

2.1.75 ……………..

2.1.86 ……………..

2.1.97 ……………..

2.1.10 “Donation” includes any such cash, in-kind and movable, immovable property as may be granted by a donor as an assistance to the Trust.

2.1.11 “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules framed under this Act.

4. Trust to be an autonomous body

4.1 The Trust shall be an autonomous and corporate body with perpetual succession.

4.2 The Trust shall have a separate seal of its own for all of its functions.

4.3 The seal and logo of the Trust shall be as determined by the Council.

4.4 The Trust may acquire, use, sell, dispose of or otherwise manage, as required, any movable, immovable property, like an individual.

4.58 The Trust may sue and be also sued by its name, like an individual.

6. Objectives of the Trust

6.1 The objectives of the Trust shall be as follows: 6.1.1To maintain the Pashupati area as such as the Pashupati area of the 10………….Lord Pashupatinath has remained as a centre of reverence and a holy place for Hindu pilgrims since time immemorial;

6.1.2 To safeguard, maintain and develop the Pashupati area in a planned manner, in conformity with the ideals, glory and importance of the Lord Pashupatinath;

6.1.3 To maintain, protect and promote objects or sites of ancient, historical, religious, cultural and national importance, movable and immovable assets of the Lord Pashupatinath11 and natural heritages in the Pashupati area;

6.1.3A.12 To make arrangements for the performance of cultural feasts and festivals, and social and benevolent activities13 and worships in accordance with traditional religious rites and rituals in temples of all Gods and Goddesses, including the Lord Pashupatinath temple, under the State trust (Rajguthi), in the Pashupati area;

6.1.4 To make improvements in this holy site of pilgrimage as practicable in a planned manner and develop it as a site of international pilgrimage14 for the convenience of all Hindu devotees within and outside the country and of tourists, as well;

6.1.5 To perform other functions in a well-planned way in consonance with the objectives of this Act.

8. Formation of the Pashupati Area Development Trust Governing Council

8.1 There shall be formed a Pashupati Area Development Trust Governing Council under the chairpersonship of the Minister or Minister of State for Culture, Tourism and Civil Aviation17 for the operation and safeguard of all activities of the Trust.

8.2 The Council to be formed pursuant to Sub-section 8.1 shall consist of the following members:

8.2.118 ……………..

8.2.219 ……………..

8.2.320 ……………..

8.2.421 ……………..

8.2.4A.22 Member, National Planning Commission (looking after culture) -Member

8.2.5 Head Priest (Mulbhatta) -Member

8.2.6 Secretary, Ministry of Youths, Sports and Culture -Member

8.2.6A.23 Secretary, Ministry of Home Affairs -Member

8.2.7 Secretary, Ministry of Housing and Physical Planning -Member

8.2.8 President, Kathmandu District Development Committee -Member

8.2.9 Mayor, Kathmandu Municipality -Member

8.2.10 Chairperson or Administrator, Guthi Corporation -Member

8.2.11 A maximum of Seven persons24 nominated by the chairperson from amongst the cultural, religious and tourism experts25 -Member

8.2.12 A person nominated by the Chairperson -Treasurer 8.2.13 A person nominated by the chairperson -Member- secretary

8.3 Necessary change or alteration may be made by 26…….. the chairperson in the members of the Council. A notice of such change or alteration shall be published in the Nepal Gazette.

8.427 ………………..

8.5 In nominating members pursuant to Sub-section 8.2.11, at least one member shall be nominated from amongst the social activists having permanent abode within the Pashupati area. 8.6 The tenure of the nominated members shall be of Four years; and upon the expiration of their tenure, they may be eligible for renomination.

10. Functions, duties and powers of the Council

10.1 The functions, duties and powers of the Council shall be as follows:

10.1.1 To remain effortful for the accomplishment of the objectives of the Trust pursuant to this Act;

10.1.2 To observe, or cause to be observed, guidance to be made by the chairperson from time to time;

10.1.3 To approve a Pashupati area master plan and annual plans29 and corresponding programmes 30….…… and implement, or cause to be implemented, the same;

10.1.431 To make, or cause to be made, arrangements for the operation of various kinds of religious activities,including worships, feasts, festivals and functions as handed down since immemorial in all temples of God and Goddess, including the Lord Pashupatinath temple, under the state trust, within the Pashupati area;

10.1.4A.32 To look after the arrangements of other functions to be performed by the Pashupati Amalkot Kachahari, Treasury Office of Lord Pashupati and Treasury Office of Jayabageshowri, except in relation to cultivated lands, to formulate policies on the functions of these bodies and give necessary directions to them;

10.1.4B.33 To carry out, organize, or cause to be carried out, organized, study, research works, workshops, symposia etc. from time to time in relation to the operation of affairs according to religious rites and rituals and the development of the Pashupati area;

10.1.4C.34 To make arrangements for the protection of the Lord Pashupatinath temple and all kinds of houses, lands, shrines, temples, rest houses for pilgrims, inns related with the God and Goddess, within the Pashupati area;

10.1.4D.35 To prepare an inventory of shrines, temples, rest houses for pilgrims, inns, stone taps, yards, gardens, forests within the Pashupati area, and barren and cultivated lands which are related with the Lord Pashupatinath and all Gods and Goddesses under all kinds of trusts and within or outside the Pashupati area;

10.1.4E.36 To fix rent, Raitan contract, rental fee or in-kind or cash tariff from time to time on the basis of use and enjoyment of the trust land of the Lord Pashupatinath;

10.1.5 To make necessary arrangements for financial resources required to implement plans and programmes;

10.1.6 To form various committees and sub-committees within37 or outside Nepal for the accomplishment of the objectives of the Trust;

10.1.7 To formulate policies for the various committees and sub-committees formed pursuant to Sub-section 10.1.6 and give necessary direction or guidance and appraise and review their functions;

10.1.8 Taking into account of the planning of Pashupati area and the importance, value and sensitivity of any specific place within the Pashupati area, to specify prohibited activities within such places and forbid and control such activities;

10.1.9 To get the concerned bodies and persons to implement, as promptly as possible, the activities required to be carried out for the accomplishment of the objectives of the Trust pursuant to this Act;

10.1.1038 To cause participation of the local units and people in the implementation of plans and programmes and giveclear information to the general people from time to time in such a manner as to avoid any illusion and confusion on the people about the plans and programmes to be implemented;

10.1.1139 In the course of carrying out planned development of the Pashupati area, to main clean environment by making construction, maintenance, repair and sanitation in a well-planned manner;

10.1.1240 To well manage other basis public utilities such as drinking water, sewerage, water exit, electricity, telephone, roads etc., and adopt regular and effective procedures in order to avoid filth and dirt and maintain cleanliness.

10.1.1341 To arrange also for plantation, forests, gardens, grounds, wildlife and forest heritages within the Pashupati area;

10.1.1442 To protect and maintain, in a well-managed manner, yards, funeral grounds/pyres, watercourse of rivers, river substances, water courses, sand etc. within the Pashupati area;

10.1.1543 To prepare necessary standards to avoid pollution and maintain clean environment within the Pashupati area, and enforce the standards by obtaining approval from the Government of Nepal;

10.1.1644 To make publicity and mobilize public participation through appropriate means in order to bring about extensive public awareness and safeguard and utilize the Pashupati area as a place of pilgrimage;

10.1.1745 To carry out activities such as to prescribe necessary standards in relation to construction works to be done within the Pashupati area, and obtain houses and lands through the Government of Nepal and set aside lands for various purposes;

10.1.1846 To make transparent, as prescribed, donations, offerings, gifts offered to the Lord Pashupatinath and the shrines and temples within the Pashupati area and have the same credited to the Trust;

10.1.1947 To use such portion of the incomes of the Trust as prescribed in social and benevolent activities such as education, health and environment protection.

11. Meetings of the Council

11.149 The member secretary of the Council shall, as directed by the chairperson or the person presiding over the meeting of the Council, shall specify the date, time and venue of the meeting and call the meeting of the Council.

11.2.50 The meeting of the Council shall be presided over by the chairperson, and, in his or her absence, the meeting shall be presided over by a member chosen by the attending members from amongst themselves.
11.2A.51 Notwithstanding anything contained in Sub-Section 11.2, the chairperson shall preside over the meeting of the Council discussing the annual programmes, budget of the Council and appraising four monthly progress.
11.3 In giving a notice of a meeting, the notice shall be given by specifying a reasonable time as required.
11.4 The meeting of the Council shall be held generally Two times a year. Provided that, the Council may meet any times if so directed by the chairperson.
11.5 The member secretary shall maintain the minutes of the meeting.
11.6 Other provisions relating to the meeting of the Council shall be as determined by the Council itself.

12. Provisions of employees

12.1 The member secretary of the Council shall act as the administrative chief of the Council.

12.2 The Council may appoint such other employees as required.

12.3 The remuneration, conditions of service and facilities of the treasurer, member secretary and other employees shall be as prescribed.

16. To remain under control of the Government of Nepal

16.1 The forests, jungles and barren lands within the Pashupati area shall remain under control of the Government of Nepal. If any inn (Pati), rest house (Pauwa), rest house for pilgrims (Sattal), shrine, temple and land covered thereby, pond, rivulet sand and forest and jungle within the Pashupati area including the Bankali, Mrigastahli, Tilganga, Kailash Veda Ashram and Dev Udhyan has been registered in the name of any person or body, such registration shall be void. No forest, jungle, barren land controlled by the Government of Nepal shall be provided, whether relinquishing the title thereto or not, to any person or body for possession and use.

16.2 The provision of Sub-section 16.1 shall not be deemed to bar the developing and using, in a planned manner, by the Council of the forests, jungles, barren and cultivated land within the Pashupati area for the purpose of the development of the Pashupati area.

17. Permission of the Council to be obtained

17.1 Notwithstanding anything contained in the prevailing Nepalese laws, Royal Seal, Sanad, Sawal, and other instruments, no person may transfer in any manner the land owned and possessed by him or her and make any construction related work in the places prohibited by the Council58 within the Pashupati area for the purpose of implementing, as required, the approved plans and programs for the accomplishment of the objectives of the Trust.

17.2 In determining standards pursuant to Sub-section 17.1, the Council59 may also determine and enforce standards on buildings, roads, ways, bridges, sewerage, water exits, toilets and telephone lines, pillars and other basis public utilities.

17.3 No person may, without prior approval of Council,60 make new construction, reconstruction, alteration, change in the existing foundation and style, repair or other construction related work in any land owned and possessed by him or her within the places specified by the Council upon determining the standards pursuant to Sub-section 17.1.

17.4 The Kathmandu Valley Town Development Planning Implementation Council, Municipality61 or other bodies with responsibility of giving approval on construction related matters with or without design approval or approving designs shall not approve designs or give approval with respect to construction, without obtaining prior approval of the Council.62

17.5 If any person does any construction work with or without getting its design approved, without prior approval of the Council,63 in respect of the construction work that has to be done with the prior approval of the Council,64 or anybody approves a design in respect of such a work, the Council65 may punish such a person who does such construction work and the concerned person or body approving the design with punishment up to the extent mentioned in Sub-section 18.1 of Section 18 of the Town Development Act, 2045 (1988)66. The Council67 may stop any construction related work being done without obtaining prior approval of the Council68 and any construction related work approved in contravention of the standards or policies and directions specified or given pursuant to Sub-section 10.1.1769 and demolish such work if already built, and may also recover the expenses incurred in such demolition from the concerned person.

17.6 A party who is not satisfied with an order to stop, demolish construction related unauthorized work or impose punishment pursuant to Sub-section 17.5 may make an appeal to the Court of Appeal70 within Fifteen days of the hearing or getting of such an order. Any decision made by that Court on that matter shall be final71 .

17.7 The Council72 may so provide, control and prohibit that approval has to be obtained from the Council73 to ply and park motor vehicles, make motion pictures, take photographs, post posters or pictures, making any kind of fair or other publicity within the Pashupati area.

17.8 If approval is given in contravene of the standards, policies and directions fixed and given by the Council74 in relation to giving approval of construction related work, the concerned person of the Kathmandu Valley Town Development Planning Implementation Council75 shall be liable to departmental action.

17.9 The functions required to be performed by the Council76 shall be performed by the Kathmandu Valley Town Development Planning Implementation Committee. Provided that, if it so wishes, the Council77 may itself perform such functions or cause the same to be performed by any other body or authority, at any time.

17.1078 If any act of transferring title to or changing title to any trust land or public or government land within the Pashupati area or otherwise assigning possession and use of such land to another person in pursuant to the right conferred by the laws in force has been carried out without obtaining prior approval of the Council, the Government of Nepal may void such act at any time.

17A. Provisions relating to worships of Lord Pashupatinath and care of the temple

17A. The duty of taking care of the Lord Pashupatinathi temple shall be vested in the Trust and the duty of performing various holy rites of the Lord Pashupatinathi temple shall be vested in the Special Head Priest (Mulbhatta).

17A.2 All affairs vested under the responsibility of the Special Head Priest, other than those set forth in Sub-section 17A.1 shall be under the Council, and provisions relating to the operation, recovery thereof, taking care of and control of Tahashil and rites and rituals performed, offerings made, by persons in and to the temple, fees of worship, and expenses to be made for various activities within the Pashupati area shall be as specified by the Council. 81

18. Fund and accounts

18.1 The Council may receive or provide donations from any sector, body or person within or outside Nepal for the purposes of the Trust. The Council itself………83 or through various committees and sub-committees formed pursuant to Sub-section 10.1.6 or any other bodies or persons may make contain and receive donations for such purposes.
18.2 Other necessary matters in relation to the receiving of donations shall be as determined by the Council.
18.3 The Fund shall consist of the following amounts:
18.3.1 Amounts provided by the Government of Nepal for the development of the Pashupati area;
18.3.2 Donations provided for the Fund by any sectors, bodies or persons within or outside Nepal;
18.3.2A. Amounts received from the incomes of all types of trust lands related with the Pashupati area, and the Lord Pashupatinath;
18.3.2B.  Amounts of gifts and offerings obtained from various temples within the Pashupati area;
18.3.3 Income earned from investments so made as to obtain maximum income and secure the same; and
18.3.4 Fees or amounts received in consideration for services provided by the Trust; and
18.3.5 Amounts and donations received from any other source.
18.4 For the convenience in its operation, the Fund may open accounts in any currency with any banks without or outside the State of Nepal, deposit money into such accounts and operate the same.
18.5 All the expenses to be made on behalf of the Trust shall be borne out of the Fund.

19. Accounts and audit

19.1 The accounts incomes and expenses of the Trust shall be maintained as determined by the Council.
19.2 The audit of the accounts of the Trust shall be carried out by the Office of the Auditor General.
19.3 The Auditor General may, if he or she so wishes, examine, or cause to be examined, the documents relating to accounts and other cash and in-kind of the Trust.

21. Power to frame Rules

21.1 In order to implement the objectives of this Act, the Trust may frame Rules on the following matters, and the Rules so framed shall come into force after being approval by the Government of Nepal:
21.1.1 With respect to administrative business to be carried out by the Trust;
21.1.2 With respect to financial matters to be carried out by the Trust;
21.1.3 With respect to the remuneration, facilities and conditions of service of the employees of the Trust;

21.1.4 With respect to the functions and affairs of the Lord Pashupatinath Amalkot Kachahari and Treasury;
21.1.5 With respect to performing worships and religious rites in accordance with the traditional rituals of the Lord Pashupatinath and Guheshwori;
21.1.6 With respect to development and construction works within the Pashupati area;
21.1.7 With respect to incomes of trusts within the Pashupati area;
21.1.8 With respect to the operation of God and Goddess temples with the Pashupati area under Chhut Guthi and personal Guthi under the state trusts (Rajguthi);
21.1.9 With respect to other necessary matters.

23. Facilities

23.1 No income tax of any kind, house and land tax, motor vehicle tax, sales tax, registration fee, customs tariff as well any direct or indirect tax, fee or charge of any kind to be levied by the government body or ………90 local body. Provided that:
23.1.1 The local purchase of goods required for the operation of the day-to-day business of the Trust shall not be exempted from customs duty, sales tax, excise duty etc. levied on the value thereof.
23.1.2 The Trust shall pay the fees and charges levied in consideration for any service.
23.2 The provisions relating to the ceiling as referred to in Section 7 of the Act Relating to Land, 2021 shall apply to the lands registered in the name of the Trust.

25. Effect of inoperativeness of the Pashupati Area Development Trust Ordinance, 2043 (1987)

With the Pashupati Area Development Trust Ordinance, 2043 (1987) being inoperative, unless a different intention appears, the inoperativeness shall not:

25.1.1 Revive anything not in force or existing at the time at which the Ordinance became inoperative;
25.1.2 Affect the matter in operation as per the Ordinance or anything duly done or any punishment suffered thereunder;
25.1.3 Affect any right, privilege, obligation or liability acquired, accrued or incurred under the Ordinance;
25.1.4 Affect any penalty, punishment or forfeiture incurred under the Ordinance;
25.1.5 Affect any action or remedy made or taken in respect of any such right, privilege, obligation, liability, penalty or punishment as aforesaid; and any such legal proceeding or remedy may be instituted, continued or enforced as if the Ordinance were in force.

An Act to make provisions relating to Patan Academy of Health Sciences

Preamble: Whereas, it is expedient to establish and operate the Patan Academy of Health Sciences to conduct high standard study and research activities, to produce skilled human resource necessary for the Country in the Health Sciences area and to provide health services to the general public by strengthening health service; Now, therefore, be it enacted by the Legislature-Parliament.

Chapter 1 Preliminary

1. Short Title and Commencement:
(1) This Act may be called as “Patan Academy of Health Sciences Act, 2064 (2008)”. (2) This Act shall come into force immediately.

2. Definitions: Unless the subject or the context otherwise requires, in this Act: –
(a) “Academy” means the Patan Academy of Health Sciences established pursuant to Section 3.
(b) “Senate” means Senate of the Academy as referred to in Section 7.
(c) “Academic Council” means the Academic Council as referred to in Section 10.
(d) “Executive Council” means the Executive Council as referred to in Section 11.
(e) “Service Commission” means the Service Commission as referred to in Section 13.
(f) “Educational Institution” means Educational Institution as referred to in Section 15.
(g) “Hospital” means the Hospital established pursuant to Section 16.
(h) “Hospital Management Committee” means Hospital Management Committee established pursuant to Section 17.
(i) “Chancellor” means the Chancellor as referred to in Section 18.
(j) “Pro-Chancellor” means the Pro-Chancellor as referred to in Section 19.
(k) “Vice Chancellor” means the Vice Chancellor as referred to in Section 20.
(l) “Rector” means the Rector as referred to in Section 21.
(m) “Registrar” means the Registrar as referred to in Section 22.
(n) “Dean” means the Dean as referred to in Section 23.
(o) “Director” means the Director as referred to in Section 24.
(p) “Teacher” means a person appointed for providing education or research in the Academy.
(q) “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules framed under this Act.

Chapter 2 Establishment, Structure and Functions, Duties and Powers of the Academy

3. Establishment of the Academy:
(1) The Patan Academy of Health Sciences is, hereby, established to conduct study, teaching and research on the area of Health Sciences.
(2) The Central Office of the Academy shall be located in the Kathmandu valley.
(3) The Academy shall be known as Patan Academy of Health Sciences in English language. 4. Academy to be Autonomous Corporate Body:
(1) The Academy shall be an autonomous corporate body with perceptual succession.
(2) The Academy shall have a separate seal of its own for all of its business.
(3) The Academy may, like an individual, acquire, use, sell or otherwise dispose of movable and immovable property.
(4) The Academy may, like an individual, sue and may be sued in the same name.

5. Structure of the Academy: The organization of the Academy shall be as follows and their collective form shall be the structure of the Academy:
(a) Senate,
(b) Academic Council,
(c) Executive Council,
(d) Service Commission,
(e) Education Council,
(f) Faculty,
(g) Research Centre,
(h) Educational Institution,
(i) Hospital,
(j) Other bodies as prescribed.

6. Functions, Duties and Powers of the Academy: (1) The Academy shall have following Functions, Duties and Powers,-
(a) To carry out study, teaching, training and research in the various subjects of health,
(b) To provide qualitative and accessible health services,
(c) To conclude an agreement with National and International University, Educational Institution or Hospital for the operation of study, teaching, training and research in the various subjects of health,
(d) To produce skilled human resource necessary for the qualitative health services,
(e) To maintain co-ordination with National and International University, Educational Institution or Hospital for the strengthening various programmes to be operated by the Academy and upgrading quality of such programmes,
(f) To maintain relation, extent and upgrade with National and International University, Academy and International Institution related to Health and exchange mutual assistance,
(g) To organise or cause to organise workshop, conference and seminar in the various subjects of health,
(h) To publish or cause to publish various book relating to Health, (i) To carry out or cause to carry out other functions as prescribed.

(2) The functions, duties and powers of the Academy shall be exercised and abided by through the organisation of the Academy.

Chapter 3 Constitution, Functions, Duties and Powers of the Senate

7. Constitution of the Senate: (1) There shall be a Senate to function as the supreme body of the Academy.

(2) The constitution of the Senate shall be as follows: –
(a) Chancellor Chairperson
(b) Pro-Chancellor ViceChairperson (c) 1 ……………………
(d) Member, National Planning Commission (Looking after Health sector) Member
(e) Vice-Chancellor Member
(f) Two person from amongst Vice-Chancellors of Universities and Academies which provides higher education related to Health Sciences as nominated by the Senate on the recommendation of Executive Council Member
(g) Secretary, Ministry of Health and Population Member
(h) Secretary, Ministry of Finance Member
(i) Secretary, Ministry of Education and Sports Member
(j) Rector Member
(k) One person from amongst Deans nominated by the Senate Member
(l) Director Member
(m) President, Lalitpur District Development Committee Member
(n) Mayor, Lalitpur Sub-Metropolitan City Member
(o) Two persons from amongst Chief of the Hospitals of Nepal which concluded an agreement with Academy nominated by the Senate on the recommendation of Executive Council Member
(p) Two persons including at least a women from amongst Teachers nominated by the Executive Council on the recommendation Academic Council Member
(q) One person from amongst Chief of the Educational Institutions nominated by the Senate on the recommendation of Executive Council
(r) Chairperson, Nepal Health Research Council Member
(s) Chairperson, Nepal Medical Council Member
(t) Four persons from amongst Dalit, Aadibasi/janjati, Medhesi, backward group including at least a female nominated by the Senate on the recommendation of Executive Council Member
(u) One person from amongst donors nominated by the Senate on the recommendation of Executive Council Member
(v) One person from amongst the working employees in the Academy nominated by the Senate Member
(w) Registrar MemberSecretary

(3) The tenure of office of the nominated members shall be Three years.
(4) In case the office of the nominated members falls vacant for any reason whatsoever, another person shall be nominated for the remaining term having fulfilled same the process.
(5) The procedures relating to the meetings of the Senate shall be as prescribed.

8. Functions, Duties and Powers of the Senate: The functions, duties and powers of the Senate shall be as follows:
(a) To approve policies, plans and programmes of the Academy,
(b) To approve annual budget of the Academy,
(c) To approve Rules of the Academy,
(d) To award scholarships, degrees, certificates, medal and prize to be conferred by the Academy,
(e) To award honorary degrees as prescribed,
(f) To guide and provide necessary direction to various bodies under the Academy,
(g) To submit necessary recommendation to the Government of Nepal while formulating National Health and Educational Policy, (h) To approve annual report of the Academy,
(i) To discuss on audit report and to approve it,
(j) To manage or cause to manage relating to establishment of Educational Institutions as per necessary,
(k) To perform other functions as may be prescribed.

Chapter 4 Constitution, Functions, Duties and Powers of Academic Council

9. Constitution of Academic Council:

(1) There shall be an Academic Council to manage and regulate the educational, academic and research functions of the Academy.

(2) The Academic Council shall be constituted as follows:

(a) Rector -Chairperson

(b) Five persons from amongst Chairperson of various Subject Committees of the Academy nominated by the Senate on the recommendation of Executive Council -Member

(c) Director -Member

(d) Heads of the Curriculum and Examination Institution of the Academy -Member

(e) Two persons including at least One women from amongst Teachers nominated by the Senate on the recommendation of Executive Council -Member

(f) Two persons including at least One woman from amongst the persons who have made substantial contribution in the field of Health nominated by the Senate on the recommendation of Executive Council – Member

(g) The Dean designated by the ViceChancellor from amongst the Deans – Member Secretary

(3) The tenure of office of the nominated members shall be Three years.
(4) In case the office of a nominated member falls vacant for any reason whatsoever, another person shall be nominated for the remaining term having fulfilled the same process.
(5) Procedures relating to the meetings of the Academic Council shall be as prescribed.

10. Functions, Duties and Powers of the Academic Council: The functions, duties and powers of the Academic Council shall be as follows:–
(a) To formulate necessary policies, plans and programmes to systematise and regularise the educational, academic and research functions and submit for the approval in the Senate,
(b) To operate or cause to operate study and research programmes to award education in different subjects and levels relating to Health Sciences,
(c) To determine the qualification of the Teachers necessary for the Academy,
(d) To approve curriculum and set the standard of study, research, training and orientation to be operated by the Academy,
(e) To select the students,
(f) To fix the standards of examination,
(g) To recommend to Senate for degrees to the students who get success in the study programme conducted by the Academy,
(h) To recommend to Senate for honorary degrees, scholarship, medal and prize to be conferred by the Academy,
(i) To prepare standard text books,
(j) To evaluate study, research, training and orientation programme to be operated by the Academy,
(k) To determine the fees to be charged for study, training and research,
(l) To implement and execute the decision of Senate relating to Academic Council and to monitor,
(m) To perform such other functions as prescribed.

Chapter 5 Constitution, Functions, Duties and Powers of Executive Council

11. Constitution of Executive Council:
(1) There shall be an Executive Council to act as the executive body of the Academy.
(2) The Executive Council shall be constituted as follows:
(a) Vice-Chancellor Chairperson
(b)Rector Member
(c) One person from amongst the Deans Member
(d) One person from amongst the Chiefs of the Educational Institutions who is a member of Senate Member
(e) Director Member
(f) One person from amongst the Teachers Member
(g) Registrar MemberSecretary

(3) The members as referred to in Clauses (c), (d) and (f) of Sub-section (2) shall be nominated by the Pro-chancellor on the recommendation of the Vice-Chancellor.
(4) The tenure of office of the nominated members as referred to in Sub-section (2) shall be Three years.
(5) Procedures relating to the meetings of the Executive Council shall be as prescribed.

12. Functions, Duties and Powers of the Executive Council: The functions, duties and powers of the Executive Council shall be as follows:
(a) To execute or cause to execute the decisions and directives of the Senate,
(b) To prepare draft of the Rules relating to the Academy and submit them to the Senate for approval,
(c) To prepare policies, plans, annual programmes, progress report, annual budget, audit report and other resolutions and introduce them to the Senate for approval,

(d) To evaluate and monitor the functions carried out by the bodies under the Academy and to direct such bodies as per necessity, (e) To operate, look after and protect, sell, or lease or contract the fund and movable and immovable property of the Academy subject to the policy, guidelines of the Senate, Provided that, prior approval of the Government of Nepal shall be taken to sell the immovable property which was be received from the Government of Nepal.
(f) To appoint and promote teachers and employees necessary for the Academy on the recommendation of the Service Commission,
(g) To accept financial and other assistance to the Academy,
(h) To carry out other functions as prescribed.

Act Number 33 of the year,2063 paush 30 (2007/2008)

An Act Made to Amend and Consolidate Laws Relating to Securities Preamble: Whereas, it is expedient to update the laws relating to securities by amending and consolidating such laws in order to regulate and manage the activities of the securities markets and persons involved in the business of dealing in securities by regulating the issuance, purchase, sale and exchange of securities for the purpose of protecting the interests of investors in securities, by developing the capital market to mobilize necessary capital for the economic development of the country; Now, therefore, be it enacted by the House of Representatives in the First Year of the issuance of the Proclamation of the House of Representatives, 2006.

Chapter-1 Preliminary

1. Short title and commencement:

(1) This Act may be called “Securities Act, 2063”. (2) This Act shall be deemed to have been commenced from 6 Ashoj 2063 (September 22, 2006). 2. Definitions: Unless the subject or the context otherwise requires, in this Act,-

(a) “Chairperson” means the Chairperson of the Board appointed under Section 7.

(b) “License” means the license issued by the Board under this Act to operate the stock exchange or securities business.

(c) “Company” means a company incorporated under the company laws force.

(d) “Depository means a bank or financial institution that makes agreement with the scheme manager and thereby undertakes the responsibility of providing custodial services such as safe holding and operating the assets of any collective investment scheme.

(e) “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules framed under this Act.

(f) “Securities” means any shares, stocks, bonds, debentures, debenture stocks or collective investment scheme certificate issued by a body corporate or treasury bonds, saving bonds or bonds issued by the Government of Nepal or by a body corporate against the guarantee of the of the Government of Nepal, and this term also includes such other securities as may be specified by the Board to be transacted or transferable through the stock exchange or the instrument to purchase, sell or exchange such securities.

(g) ” Securities transactions ” means the issue, purchase, sale or exchange of securities and other acts pertaining thereto;

(h) “Registration of securities” means the registration of securities by a body corporate with the Board pursuant to Section 27.

(i) “Stock exchange” means a market, place or facility performing the purchase, sale or exchange of securities on regular basis by bringing together to the purchasers and sellers of securities.

(j) ” Securities business” means transactions in securities to be carried on by a company or body licensed to carry on the securities business under this Act.

(k) “Securities business person” means a company or body licensed under Section 58 to carry on securities business.

(l) “Issuance” means an offer made by a body corporate to raise capital and acts related there to, and this term also includes the issuance of securities to promoters.

(m) “Private placement” means an act to make an offer by a letter, dispatch or any electronic communication media for the sale of securities to a maximum of fifty investors.

(n) “Board” means the Nepal Securities Board established under Section-3.

(o) “Exchange” means an act concerning purchase, sale or transfer of securities already issued pursuant to this Act.

(p) “Prospectus” means a prospectus required to be published by a body corporate pursuant to Section 30 prior to he public issue of securities.

(q) “Scheme manager” means a body corporate managing a collective investment scheme of participants with an object to provide an efficient investment service pursuant to this Act.

(r) “Investment fund” means a fund created out of amounts deposited by participants in a collective investment scheme in accordance with a contract as has been taken in its custody by a scheme manager with object to provide an efficient investment service or assets related with such a fund, and this term also includes a fund which the scheme manager has taken in its responsibility in accordance with this Act or additional assets created from management of investment of assets and amount accumulated by way of considers anion.

(s) “Participant” means a person or body that makes investment in a collective investment scheme operated by a scheme manager pursuant to this Act.

(t) “Member” means a member of the Board, and this term also includes the Chairperson.

(u) “Body corporate” means a body corporate established under prevailing which has the capacity of public issuance of securities . Provided that, it shall not include a corporative bodys.

(v) “Public issue” means an offer made by a body corporate before the general public for the subscription of its securities by publishing a prospectus.

(w) Collective investment scheme” means such an investment fund, unit trust or similar other participatory fund management program as specified by the Board, from time to time as may be operated by a scheme manager in accordance with this Act in order to distribute returns to, the participants of the concerned program proportionately, accrued from the efficient investment service on saving investment amount which has been undertaken in custody of the manager and so mobilized that various persons or bodies that have participation in it.

(x) “Enlisting” means the enlisting of securities on a stock exchange for the purposes of purchasing, selling or exchanging securities through the stock exchange;

(y) “Right issue” means an offer made to the existing shareholder or any person nominated by such shareholder for the subscription of any securities issued by a body corporate.

Chapter-2 Provisions Relating to Board

3. Establishment of Board:
(1) There shall be established a Board by the name of Nepal Securities Board in order to regulate and manage the activities of the securities markets and persons involved in securities business by regulating the issue, purchase, sale and exchange of securities in order to develop capital market and protect the interests of investors in securities.

(2) The Board to be established under Sub-section (1) shall consist of the members as follows:-
(a) A person appointed by the Government of Nepal -Chairperson
(b) Joint Secretary, Ministry of Finance -Member
(c) Joint Secretary, Ministry of Law, Justice and Parliamentary Affairs -Member
(d) Representative, Nepal Rastra Bank -Member
(e) Representative, Institute of Chartered Accountants of Nepal -Member
(f) Representative, Federation of Nepalese Chambers of Commerce and Industries -Member
(g) A person nominated by the Government of Nepal from amongst the experts who have obtained at least master’s degree in economics, management, finance, commerce or law from a recognized university and gained at least seven years of experience in stock exchange,management, capital market development, finance and economic sector -Member

(3) The concerned organization shall, in nominating its representative pursuant to Clauses (e) and (f) of Sub-section (2), nominate a person who has obtained at least bachelor’s degree and gained at least seven years of experience in accounts, industry, commerce, finance, banking, economics or law matters.
(4) The tenure of office of the member nominated pursuant to clause (g) of Sub-section (2) shall be three years.
(5) No act or proceeding of the Board shall be affected merely on the reason of any vacancy in office of any member.
(6) An officer employee designated by the Board shall act as the Secretary of the Board.
(7) If the Board thinks it necessary, it may invite any native or foreign expert, adviser to attend its meeting as an observer.
(8) The central office of the Board shall be situated in Kathmandu Valley; and the Board may, as required, open its branch or contact office within or outside of Nepal.

4. Board to be an autonomous and body corporate: (1) The Board shall be an autonomous body corporate having perpetual succession.
(2) The Board shall have a separate seal of its own for all of its acts and proceedings.
(3) The Board may, like an individual, acquire, use, purchase, sell, or otherwise deal with, any movable or immovable property. (4) The Board may, like an individual, sue by its own name and be also sued in the same name.

5. Functions, duties and powers of the Board: The functions, duties and powers of the Board shall be as follows:-
(a) To offer an advice, as per necessity, to the Government of Nepal on matters incidental to the development of capital market,
(b) To register the securities of any corporate body established with the authority to make a public issuance of its securities,
(c) To regulate and systematize the issue, transfer, sale and exchange of registered securities,
(d) To grant permission to any corporate body, which is desirous of operating a stock exchange, to operate the stock exchange subject to this Act or the Rules and bye -laws framed under this Act,
(e) To regulate and monitor the activities of the stock exchange;
(f) To inspect as to whether or not any stock exchange is executing its activities in accordance with this Act or the Rules and Bye-laws framed under this Act, and to suspend or revoke the license of such a stock exchange, if it is found that the same has not been done,
(g) To issue a license to companies or institutions, which are desirous of carrying on the securities business subject to this Act or the Rules and Bye-laws framed under this Act,

(h) To regulate and monitor the activities of securities business person,
(i) To classify securities business persons and fix their standards according to their functions and capability by fulfilling such procedures as prescribed,
(j) To grant a permission to operate collective investment schemes and investment fund programs, and to regulate and monitor the same,
(k) To approve Bye-laws of stock exchanges and those bodies which are related with securities business and engaged in securities transactions, an d to issue orders to stock exchanges and those bodies which are related with securities business and engaged in securities transactions to make necessary amendment in their Bye-laws with a view to making necessary provisions concerning the development of capital market and protecting the interests of investors in securities,
(l) To systematize the clearance of accounts related to securities transactions,
(m) To supervise whether or not security business persons have maintained such conduct as prescribed in this Act or the Rules, Bye-laws and Directives framed under this Act, while carrying on securities business, and suspend or revoke the license to carry on securities business where any securities business person is not found to have maintained such a conduct,
(n) To make or cause to be made, such arrangements as may be necessary to regulate the volume of securities and the mode of securities transactions for the promotion, development and healthy operation of stock exchanges,
(o) To make such arrangements as may be necessary to prevent insider trading or any other offense relating to securities transactions as referred to in Chapter-9 for the protection of the interests of investors in securities,
(p) To review, or cause to be reviewed, financial statements submitted by corporate bodies issuing securities and securities business person, sand give such directives to the concerned corporate bodies as it deems necessary in this connection,
(q) To regulate and make transparent the act of acquiring the ownership of a company there by gaining control over its
(r) To maintain coordination and exchange cooperation with the concerned agencies in order to supervise and regulate matters concerning securities or company affairs,
(s) To perform or cause to be performed such other functions as may be necessary in relation to securities and the development of capital market.

6. Meeting and decision of Board:
(1) The Chairperson shall call the meeting of the Board as per necessity. Such a meeting shall be held at least once a month.
(2) The meeting of the Board shall be held on such date, at such time and at such place as may be specified by the Chairperson.
(3) The meeting of the Board shall be presided over by the Chairperson and by a member chosen by the members from amongst themselves, in the absence of the Chairperson.
(4) Where at least two members request in writing to call a meeting of the Board, the Chairperson shall have to call a meeting of the Board within seven days from the date of receipt of such a notice.
(5) The Secretary of the Board shall provide the agenda to be discussed at the meeting to the members, along with the notice for the meeting.
(6) The presence of more than fifty percent of the total number of members of the Board shall be deemed to have been constituted a quorum for a meeting of the Board.
(7) A majority opinion shall prevail at the meeting of the Board and in the event of a tie; the person presiding over the meeting shall exercise the casting vote.
(8) There shall be maintained a separate minute book recording the names of members present at, matters discussed at and decisions made by each meeting of the Board, and such a book shall be signed by members present.
(9) The decisions made by the Board shall be authenticated by the Secretary of the Board and shall provide to all members.
(10) Other procedures relating to the meeting of the Board shall be as determined by the Board itself.

7. Appointment of Chairperson:
(1) The Government of Nepal shall, subject to Sub-section (2), appoint the Chairperson to act as the administrative chief of, and perform the day-to-day business of the Board.
(2) In making appointment to the office of Chairperson pursuant to Subsection (1), the Government of Nepal shall appoint to the office of Chairperson an appropriate person from amongst the renowned persons who have obtained at least master’s degree and gained at least seven years of experience in the field of stock exchange management, capital market development, economics, finance, commerce, management or law.
(3) There shall be formed a committee under the convenorship of the member of National Planning Commission responsible for the concerned sector and consisting of the Secretary at the Ministry of Finance and an expert in the filed of securities as its members, for recommending a name for the purpose of appointment of Chairperson pursuant to Sub-section (2); and the appointment of Chairperson shall be made pursuant to this Section on recommendation of this committee.
(4) The committee referred to in Sub-section (3) shall, in recommending a name, recommend the names of at least three persons who have possessed the qualification pursuant to this Act.
(5) In recommending a name for the Chairperson pursuant to Subsections (3) and (4), the committee shall determine its Rules of procedures on its own.
(6) The term of office of Chairperson shall be of four years, and he or she may be reappointed for a maximum period of four years.
(7) Notwithstanding anything contained elsewhere in this Section, where the Chairperson commits any act or action contrary to the interests of the Board or the development of capital market and causes any loss and damage to the Board, the Government of Nepal may form an inquiry committee as prescribed and, on recommendation of such a committee, remove him or her from the office of the Chairperson. Provided that prior to so removing from his or her office, the Chairperson shall be provided with appropriate opportunity to defend himself or herself.

8. Functions, duties and powers of the Chairperson: (1) The functions, duties and powers of the Chairperson shall be as follows: (a) To perform such functions as may be necessary for the protection of the interests of investors in securities for the development of capital market,
(b) To regulate and monitor, or cause to be regulated and monitored, stock exchanges and transactions of securities business persons in order to make transactions in securities strengthened, effective and reliable,
(c) To act as the executive chief of the Board,
(d) To submit such long-term and short-term plans and policies as be necessary to be adopted by the Board for the management of stock exchanges and development of capital market to the Board for its approval,
(e) To call or cause to be called the meeting of the Board and preside over the same,
(f) To prepare annual programs and budget of the Board and submit the same to the Board for its approval,
(g) To implement or cause to be implemented the decisions made by the Board,
(h) To inspect and supervise day-to-day business of the Board and perform the functions in accordance with the objectives of the Board,
(i) To appoint the advisers and employees required for the Board as prescribed,
(j) To perform or cause to be performed such other functions as may be entrusted to him or her by the Board (2) The functions, duties and powers of the Chairperson, other than those referred to in Sub-section (1) shall be as prescribed.

9. Remuneration, meeting allowance and other facilities of Chairperson and member: The remuneration, meeting allowance and facility entitled to, by the Chairperson and member and daily and traveling allowance entitled to, by the Chairperson and member while making travel within or outside Nepal shall be as prescribed.

10. Qualification of Chairperson and member: In order to be appointed as a Chairperson or a member, as the case may be, a person shall have to possess the qualification as follows:- (a) One who is a citizen of Nepal,
(b) One who has maintained high moral character,
(c) One who has gained at least seven years of professional experience in the field of stock exchange management, capital market development, economics, finance, commerce, management or law, and
(d) One who is not disqualified under Section 11.

11. Disqualification of Chairperson and member: Any of the following persons shall not be eligible to be appointed to the office of Chairperson or member, as the case may be:-

(a) One who is an officer-bearer of a political party,
(b) A person involved in securities business,
(c) One who is adjudicated as an insolvent,
(d) One who is insane,
(e) One who has been convicted by the court of an offense involving moral turpitude.

12. Circumstances on which a Chairperson and a member may be removed from office: (1) Where there occurs a circumstance for removal of the Chairperson or the member referred to in subsection (2), the Government of Nepal shall remove the Chairperson and member, as the case may be. Provided that prior to making such a removal, the Government of Nepal shall not deprive the concerned person of a reasonable opportunity to defend him/herself.

(2) The Chairperson and the member, as the case may be, shall be removed from the office in any of the following circumstances:- (a) If one is disqualified to be a Chairperson and a member, as the case may be, pursuant to Section 11,
(b) If one commits any act contrary to the interest of investors in securities or any act that may cause loss or damage to the development of capital market,
(c) If one suffers from lack of competence to implement, or cause to be implemented, such functions required to be performed by the Board to attain the objectives of the Board pursuant to this Act or the Rules framed under this Act,
(d) If one has been held disqualified to carry on any occupation or business by the reason of misconduct and his or her certificate has been revoked or he or she has thus been restricted to carry on a business,
(e) If one remains absent from three consecutive meetings of the Board without giving a notice.

13. Resignation of Chairperson and member: The Chairperson or the member, as the case may be, may relieve of his or her office by tendering a resignation in writing to the Government of Nepal.

14. Fulfillment of vacancy: If the office of the Chairperson or any member falls vacant prior to the completion of his/her tenure of office, the Government of Nepal shall appoint any person to that vacancy for the remaining period of tenure by fulfilling the procedures as referred to in this Act.

15. Proceeding not to be invalid: No act or proceeding of the Board shall be invalid merely by the reason of any defect in the appointment of the Chairperson or member, as the case may be, or the formation of the Board or vacancy in office of the Chairperson or any member.

16. Powers to form committee or sub-committee:

(1) The Board may, form any committee or sub-committee, as per necessity, for the operation of its business. Such a member as specified by the Board shall be the coordinator of the committee or sub-committee, as the case may be, so formed. (2) The functions, duties, powers, terms of reference, meeting allowance and procedures of the committee or subcommittee, as the case may be, formed pursuant to Sub-section (1) shall be as prescribed by the Board.

17. Delegation of powers: (1) The Board may, as per necessity, delegate any of the powers conferred to it to the Chairperson, any member or any committee or sub-committee, as the case may be, formed pursuant to Section 16.

(2) The Chairperson may, as per necessity, delegate any of the powers conferred to him or her to any member, any committee or sub-committee, as the case may be, formed pursuant to Section 16 or any employee of the Board.

18. Requirement of disclosure in regard to conflict of interest: Where any proposal in which any member has direct or indirect personal interest is to be discussed at the meeting of the Board, such a member shall give information as to such interest to the Board prior to the commencement of discussion on such matter. Except so permitted by the Board, such a member shall not be entitled to participate in the discussion and decision of such a matter and cast his or her vote thereon. Provided that the presence of such a member shall be valid in order to constitute a quorum of the meeting.

19. Provisions relating to accounts experts, advisors and employees: (1) The Board shall have such numbers of accounts experts, advisors and employees as may be necessary for the efficient operation of the functions of the Board.
(2) The appointment, remuneration, facilities and terms and conditions of service of the accounts experts, advisors and employees of the Board shall be as prescribed.

20. To take oath: The Chairperson, member, advisor and employee of the Board appointed for the first time in the Board shall, prior to assuming the functions of their office, take an oath of secrecy and honesty, as prescribed.

21. Secrecy: (1)No Chairperson, member, advisor, employee, auditor, agent or representative of the Board shall perform the following business:- (a) To supply or disclose any confidential information or notice obtained in the course of performing the duties of office to another person,
(b) To use such information or notice for personal benefits.

(2) Notwithstanding anything contained in Sub-section (1), any confidential information or notice may be disclosed on the following circumstances known to him or her in accordance with the procedures as specified by the Board:-
(a) Where the disclosure of such information or notice has been made in performing one’s duty publicly, rendering assistance to any law enforcing authority, carrying out an order given by a court or competent authority,
(b) Where such information or notice has been supplied to the external auditor of the Board in the course of performing one’s duties,
(c) Where such information or notice has been disclosed in the interests of the Board in the course of legal proceedings.

22. Fund of Board: (1) The Board shall have a separate fund of its own.

(2) The following amounts shall be credited to the fund as referred to in Sub-section (1):-

(a) Amounts received from the Government of Nepal,
(b) Amounts obtained as grants, assistance or loans from any native, foreign or international organizations, institutions or bodies, Provided that prior approval of the Government of Nepal shall be obtained in receiving such grants, assistance or loans.
(c) Amounts received by way of the license fees,
(d) Amounts received by way of the fees for registration of securities,
(e) Amounts received by way of the fees, charges, dues for transactions in securities,
(f) Amounts received by way of fines imposed by the Board,
(g) Amounts received from any other sources. (3) All amounts to be obtained to the fund of the Board pursuant to Sub-section (1) shall be credited to an account to be opened with any commercial bank within Nepal.

(4) All the expenditures t o be made on behalf of the Board shall be chargeable on the fund as referred to in Sub-section (1).

(5) In making expenditures pursuant to Sub-section (4), such expenditures shall be made subject to the budget approved by the Board for the incomes and expenditures to be made in each fiscal year.

(6) The operation of the fund of the Board shall be as prescribed.

23. Provision of revolving fund: (1) The Board may establish a revolving fund to manage its source of income and such amounts as specified by the Board shall be credited to that fund each year.
(2) The amounts of the revolving fund may be held in securities issued by the Government of Nepal or in such a periodic account as may be prescribed by the Board.
(3) Generally, no moneys held in the revolving fund, other than income earned out of the moneys in that fund, shall be spent.
(4) Provisions relating to the operation of the revolving fund shall be as prescribed.

24. Accounts of Board: (1) The Board shall have to maintain updated records of its activities.
(2) The Board shall have to maintain accounts of its incomes and expenditures, balance sheet and accounting details of each fiscal year in accordance with accounting system conforming to international practice no later than six months after the expiry of such a fiscal year.

25. Auditor and audit: (1) The accounts and books of the Board shall be audited by the Auditor General or any auditor designated by him. (2) While auditing the accounts and books of the Board, by the auditor appointed pursuant to Sub-section (1), such an auditor shall mention, inter alia, the following matters in his or her audit report:
(a) Whether the statements of incomes and expenditures truly reflect the incomes and expenditures of the Board in that fiscal year,
(b) Whether the balance sheet of that fiscal year reflects the true economic condition of the Board.

26. Annual report: (1) The Chairperson shall have to present an annual report of the activities of the Board before the Board no later than four months after the expiry of each fiscal year and also provide a copy of such a report to the Government of Nepal.
(2) The Chairperson shall in each year make public the annual report of the Board as referred to in Sub-section (1).

Chapter-3 Registration and Issuance of Securities

27. Registration of securities: (1) A body corporate shall have to register securities to be issued by it with the Board prior to their issuance.

(2) A body corporate shall have to make an application in the prescribed format, accompanied by its memorandum of association, articles of association, documents related with such securities, and the prescribed fees, to the Board for registering securities pursuant to Sub-section (1).

(3) Where an application is received pursuant to subsection (2), the Board shall make necessary inquiry into the matter and, if it considers appropriate to register such securities, register such securities in the register as prescribed, indicating the details of such securities and issue the securities registration certificate in the prescribed format to the concerned body corporate.

(4) Notwithstanding anything contained elsewhere in this Section, a body corporate which has already issued securities prior to the commencement of this Act shall register such securities with the Board in accordance with this Act within one year from the date of commencement of this Act.

28. Sale and transfer of securities: (1) Where a body corporate allots or sells securities after registering such securities, the body corporate shall have to give a notice along with the details of securities so allotted or sold to the Board within seven days.

(2) Upon receipt of a notice as referred to in Sub-section (1), where it appears necessary to make the allotment and sale of such securities fair and informative for the interests of investors and the body corporate, the Board may give necessary directive to the concerned body corporate. It shall be the duty of the concerned body corporate to abide by such directive.

29. Securities to be issued publicly: (1) Where a body corporate is to sell and distribute securities to more than fifty persons at a time, it shall make public issue for the sale and distribution of such securities.
(2) The period to be open for making application of the securities to be issued pursuant to Sub-section (1) shall be as prescribed. (3) The provisions relating to the value and allotment of securities for which public issue has to be made shall be as prescribed. (4) Where securities for which public issue has been made once could not be sold and have to be re-issued again within one year, the body corporate which so issues the securities may, with the approval of the Board, issue such securities by mentioning the matters which are different than the matters set forth in the previously published prospectus and the prospectus previously published.

30. Prospectus to be published: (1) A body corporate shall have to get a prospectus approved by the Board for making public issue of securities in accordance with this Act after the commencement of this Act and publish the prospectus for information to all the concerned. While publishing the prospectus in such a way, the prospectus shall also mention the place where the general public can obtain or inspect the prospectus.

(2) Notwithstanding anything contained in Sub-section (1), it shall not be required to issue a prospectus to issue the following securities: (a) Securities issued by the Nepal Rastra Bank,
(b) Securities issued against the full guarantee of the Government of Nepal,
(c) Securities proposed to be sold to up to fifty persons at a time,
(d) Securities issued to own workers or employees,
(e) Securities permitted by the Board as to issue and sell without issuing a prospectus.

31. Approval of a prospectus: The Board shall approve only a prospectus which contains such information as may be adequate for investors to make evaluation as to the assets and liabilities, financial status, profit and loss of the issuer and matters expected in the future.

32. Matters to be referred to in prospectus: Every prospectus shall contain such general matters as required to be set down in the prospectus, capital and other information of the issuer, main functions to be done by the issuer, information pertaining to legal action, economic condition, general administration, management of the issuer, information relating to the expert preparing the prospectus and the economic statements contained in the prospectus and such other matters as may be prescribed.

33. Liability for matters referred to in prospectus: (1) The concerned body corporate and the director signing a prospectus and the expert preparing such a prospectus shall be personally and collectively liable for the truth of the details and documents underpinning the information set down in the prospectus submitted to the Board for the purpose of registering securities with the Board and obtaining permission to issue such securities.

2) Where any person who subscribes for any securities on the faith of the matters set down in the prospectus subsequently sustains any loss or damage by the reason that the matters set down in the prospectus have been set down with mala fide intention or untrue or false statements have been included therein knowingly, the body, director or experts preparing the prospectus shall be liable to pay compensation for such loss or damage. Provided that no director shall be liable to pay such compensation if he or she proves that he or she has resigned prior to making a decision on the matters set down in the prospectus with ulterior motive or knowingly or that he or she did not know that the prospectus was untrue.

(3) Where any investor sustains any loss or damage by the reason that the prospectus, information, statements or returns submitted by a body corporate to the Board, such an investor may make a petition to the concerned District Court for compensation within thirty five days from the date of knowledge within one year after the making of investment.

34. A body corporate to make a notice: (1) Every body corporate issuing securities shall provide information on the following matters to the Board and its shareholders as soon as possible: (a) Such matters as may be necessary and supportive to evaluate its financial condition, (b) Such information as may be capable of affecting the transaction of stock exchanges or the value of securities.

(2) Every body corporate issuing securities shall also provide the Board and its shareholders with the notice and information as prescribed, in addition to the matters set down in Sub-section (1).

35. Compensation for revocation of enlisting, if any: Where a body corporate issuing any securities has enlisted the securities by making agreement with a stock exchange and the stock exchange revokes the enlisting of such securities by the reason of the failure of such body corporate to observe such matters as required to be observed by it under this Act or the Rules or Bye-laws framed under this Act any shareholder sustains any loss and damage by virtue of such revocation of enlisting, the directors of such a body corporate shall personally or collectively pay compensation to such a shareholder.

Chapter-4 Provisions Relating to Stock Exchange

36. License to be obtained to operate stock exchange: (1) A person who desires to operate a stock exchange shall obtain from the Board the license to operate the stock exchange under this Act.

(2) No person shall operate a stock exchange or purchase, sell or exchange securities without obtaining from the Board a license under this Act nor shall any person use the name of stock exchange without obtaining such a license.

(3) Notwithstanding anything contained in Sub-section (2), Nepal securities exchange market which is in operation at the time of commencement of this Act shall have to make an application to the Board for the license to operate a securities exchange market pursuant to this Act within one year from the date of commencement of this Act. Nothing shall be deemed to have been hindered the operating of the securities exchange market by Nepal securities exchange market within that period.

(4) Where Nepal Securities Exchange Market fails to make an application to the Board for a license to operate a securities exchange market within the period referred to in Sub-section (3), Nepal securities exchange market shall not be entitled to operate the stock exchange after the expiry of that period. (5) Notwithstanding anything contained elsewhere in this Section, while incorporating any stock exchange as a company with limited liability under the companies law in force after the commencement of this Act, the Company Registrar’s Office shall incorporate it only with the recommendation of the Board.

37. Application to be made to carry on stock exchange: (1) Only a body corporate may make an application to the Board for a license to carry on a stock exchange. (2) A body corporate shall have to make an application referred to in Sub-section (1) in such format and accompanied by such details. Documents and fee as may be prescribed.

38. Issue of a license to carry on stock exchange: (1) If an application is received pursuant to Section 37, the Board may, if it is satisfied with the following matters by making necessary inquiry into the matter, issue a license to carry on a stock exchange in such format as may be prescribed: (a) Where it considers that the issue of the license to carry on a stock exchange would serve the interests of investors and general public or the issuance of such a license is necessary for the proper operation of the stock exchange,

(b) Where the applicant body corporate has fulfilled the matters referred to in Sub-section (2).

(2) A body corporate which makes an application to the Board for a license to carry on a stock exchange pursuant to subsection (1) shall set out the following matters in the application: (a) Legal provisions of establishing the body corporatoer its memorandum of association stipulates that the body corporate has been established with object to establish and operate at sock exchange,
(b) The body corporate maintains its paid up capital as prescribed by the Board that such capital is not less than fifty million rupees so long as the body corporate operates the stock exchange,
(c) There are sufficient grounds to the satisfaction of the Board that the body corporate can provide such infrastructures and facilities as may be required to operate the stock exchange,
(d) Matters relating to enlisting or making similar other provisions to recognize securities to be transacted through itself,
(e) Matters that the interests of investors would be protected through regular operation of transactions in securities through the provisions and systems to be adopted by the body corporate in relation to the exchange and transactions proposed by the body corporate for the operation of the stock exchange,
(f) That it has appropriate provisions on settlement of transactions in the stock exchange and publication of records thereof and statements of transactions,
(g) That complaints filed in relation to transactions carried on by its members can be examined in a proper manner,
(h) That action can be taken as mentioned in the Bye-laws in the event of failure of its members to fulfill the liabilities under the contract.

39. The Board may specify terms: (1) In issuing the license to carry on a stock exchange, the Board may specify necessary terms taking into account the condition of capital market, healthy operation of the stock exchange and interests of investors. It shall be the duty of the concerned stock exchange to observe such terms. (2) The Board may, as per necessity, alter and modify the terms specified pursuant to Sub-section (1), having regard to the condition of capital market, healthy operation of the stock exchange and interests of investors.

40. Power to refuse to issue license to carry on stock exchange: (1) Notwithstanding anything contained in Section 38, the Board may, on any of the following conditions, refuse to issue a license to a body corporate to carry on a stock exchange: (a) Where it is not necessary to carry on the stock exchange based on the development of industry and business and feasibility of the existing transactions in securities, (b) Where it does not appear just and appropriate to allow the operation of stock exchange for the protection of interests of investors. (2) Where the Board is to refuse the issue of a license to any body corporate to carry on the stock exchange on any condition referred to in sub- section (1), the Board shall give a notice assigning the reason for such refusal to the concerned body corporate.

41. Minimum capital and financial source: The paid up capital of a body corporate carrying on a stock exchange shall be so prescribed by the Board, from time to time, as it shall not to be less than fifty million rupees; and the body corporate shall maintain such financial source as may be adequate for the provision of stock exchange that it carries on.

42. Validity period and renewal of a license to carry on stock exchange: (1) The license issued to carry on a stock exchange shall remain valid only until the last day of the fiscal year of its issue. (2) The corporate carrying on a stock exchange shall have to renew the license to carrying on a stock exchange by paying to the Board an annual fee as prescribed not later than three months after the expiry of each fiscal year. (3) In the event of failure to get renewed such a license by paying the annual fee within the time limit referred to in subsection (2), the license may be renewed by paying a fine of twenty five percent of the annual fee up to three months after the expiry of such time limit. (4) The license to operate stock exchange obtained by a body corporate which fails to renew even within the time limit referred to in Sub-section (3) shall be terminated.

43. Transactions of recognized securities: (1) A stock exchange shall manage a market only for those securities which are recognized by either enlisting in its Bye-laws, as prescribed, securities issued by bodies corporate or making similar other provisions. (2) The purchase, sale or exchange of securities not enlisted in a stock exchange shall be as prescribed.

44. Managerial responsibility of stock exchange: The board of directors of the stock exchange shall assume responsibility in relation to the management of transactions in securities carried on by such a stock exchange.

45. Functions, duties and powers of stock exchange: The functions, duties and powers of the stock exchange shall be as follows: (a) To carry on, or cause to be carried on, transactions in securities to be carried on through it in a transparent, fair and regular manner,
(b) In carrying on the stock exchange, to carry on, or cause to be carried on, the same, having regard to the interest of general public investors,
(c) To get its members to fully comply with this Act and the Rules and Bye-laws framed under this Act and monitor and supervise, or cause to be monitored and supervised, the matters pertaining thereto,
(d) To manage such a transaction place as may be adequate and convenient for operating securities transaction,
(e) To manage such employees as may be efficient in carrying on transactions,
(f) To arrange for such facilities and systems as may be adequate and proper for emergency and security provisions,
(g) To frame Bye-laws, with the permission of the Board, for enlisting of securities for the arrangements of the exchange, purchase or sale of securities and making provisions relating to membership,
(h) To perform or cause to be performed such other functions as may be required for the operation of the stock exchange.

46. Disclosure to be made by stock exchange: Every stock exchange shall give information on the following matters to the Board immediately when it comes to its knowledge:- (a) Where it appears that any of its members has committed any financial irregularity or the economic status of such a member appears to be suspicious from any activities of such a member, (b) Where it appears that any of its members has failed to fulfill such obligation as required to be fulfilled by such a member under laws or is not capable of performing such obligation, (c) Where it appears that any of its members has failed to observe financial Rules and Bye-laws or is not capable of observing such Rules and Bye-laws, (d) Such other information as may be prescribed.

47. Stock exchange to submit a report: Stock exchange shall submit to the Board a report on the activities carried out by it in each fiscal year not later than three months after the expiration of such a fiscal year.

48. Stock exchange to issue direction: (1) The stock exchange may, where a body corporate carrying on securities transactions through a stock exchange violates the agreement entered with the stock exchange or where the stock exchange considers that it is necessary to give direction to such a body corporate in order to make securities transactions fair and regular or having regard to the interests of investors, give necessary direction to such a body corporate.

(2) It shall be the duty of the concerned body corporate to observe the direction given pursuant to Sub-section (1).

49. Ceiling of securities transactions may be fixed : (1) The Board may fix the ceiling of securities that can be transacted at one time or the ceiling of securities that any one person can purchase, sell and hold at one time as prescribed.

(2) In fixing the ceiling pursuant to Sub-section (1), several ceilings may be determined based on the types of securities or types of transactions.

(3) Without prejudice to the generality of Sub-section (1), the Board may specify or fix the maximum limit of securities of any type that one person may own at one time, in such manner as prescribed.

50. Charge to be paid by stock exchange: (1) A stock exchange shall collect such securities transaction charge as may be chargeable as prescribed for the purchase, sale and exchange of securities in the stock exchange and pay such charge to the Board. Provided that such charge shall not exceed 0.03 percent of the total turn over of securities transactions.

(2) A stock exchange shall pay to the Board the amount for the charge prescribed pursuant to Sub-section (1) and collected in the previous year, not later than the last day of each month. A stock exchange that fails to observe this Section shall be deemed to have committed an offense referred to in this Act.

(3) The Board shall realize and recover the amount receivable for the securities transaction charge, in addition to an interest at the rate of ten percent, from a stock exchange failing to pay to the Board the securities transaction charge within the time limit specified in Sub-section (2).

51. Stock exchange to assist Board: A stock exchange shall render necessary assistance to the Board for the performance of functions referred to in this Act. In the course of rendering such assistance, if the Board asks for any information or advice on securities transactions or on any other specific matter, such information or advice has also to be provided to the Board.

52. Information of action to be given: If a stock exchange has demanded explanation from any of its members on any action against such a member or suspended or canceled the membership of such a member or imposed any fine on such a member or taken any other action against such member, the stock exchange shall give information thereof to the Board, specifying the name of the concerned member and also description on action and the reason for taking such action, within seven days after taking such action.

53. Stock exchange to provide for compensation fund: (1) A stock exchange shall establish and operate one such compensation fund as may be prescribed by the Board in order to protect investors against possible loss or damage.

(2) The funds deposited to the fund referred to in subsection (1) shall be used to bear compensation as prescribed.

54. Provisions relating to operation of compensation fund: The following provisions shall be made in the Rules in relation to the operation of the compensation fund to be established pursuant to Section 53 or 55: (a) Provisions relating to the deposit of money to the fund,
(b) Maximum amount to be paid as a compensation from the fund,
(c) Provisions relating to the accounts and audit of the fund,
(d) Conditions for making claim to obtain amount from the compensation fund and procedures from making such a claim,
(e) Conditions where any claim cannot be made on the compensation fund,
(f) Procedures for taking action and making decision on payment of money as claimed from the compensation fund,
(g) Maximum limit of amount payable as a compensation to one person,
(h) Other necessary matters in relation to the examination of compensation claims,
(i) Provisions to be made in the event of the revocation of the license of a stock exchange,
(j) Other necessary provisions in relation to compensation.

55. Board to make provisions on compensation: If a stock exchange is not able to establish and operate the compensation fund pursuant to Section 53 in order to protect investors against possible loss and damage or does not pay or fails to pay the amount of compensation to be payable as prescribed, the Board may establish and operate the compensation fund as prescribed or make necessary provisions in relation to the payment of the amount of compensation required to be paid as prescribed.

Chapter-5 Provisions Relation to License to Carry on Securities Business

56. License to be obtained to carry on securities business: (1) A company or body desirous of carrying on securities business has to obtain a license to carry on securities business from the Board pursuant to this Act. (2) No one shall carry on securities business without obtaining a license to carry on securities business from the Board pursuant to this Act.

57. Application for license to carry on dealing in securities: (1) A company or body desirous of carrying on dealing in securities has to make an application to the Board for a license to carry on securities business, in such form and accompanied by such details, documents and fees as may be prescribed.

(2) The application to be made pursuant to Sub-section (1) shall specify the following matters:- (a) Type of securities business and services to be provided, (b) If an agent is to be appointed to carry on securities business and if such business is to be carried on in collaboration with others, matters pertaining thereto, (c) In the case of those business persons, as prescribed, who are allowed to carry on business only upon obtaining a membership of a stock exchange, a recommendation letter of the concerned stock exchange, (d) Grounds proving the ability to carry on the proposed securities business and such other information as may be specified by the Board.

58. A license to carry on securities business to issue: (1) If an application is received pursuant to Section 57, the Board may hold necessary inquiry and issue a license to carry on securities business in such format as prescribed, to the applicant on the following grounds:- (a) If it thinks that, based on the conditions set forth in Sub-section (2), the applicant is able to carry on securities business subject to this Act or the Rules and Bye-laws framed under this Act, (b) Training and education qualification gained by the agent appointed to carry on securities business.

(2) The following matters shall also be considered in relation to the chief executive, director, concerned officers and agents serving in the company or body making application for the license to carry on securities business:- (a) Financial status, (b) Educational qualification, training and experience in the relevant work, (c) Experience required to carry on securities business, (d) Social status and character.

(3) Notwithstanding anything contained above in this Section, a license to carry on securities business other than securities brokerage and investment consultancy service shall be issued only to a public limited company or a body corporate established under the laws in force.

(4) Notwithstanding anything contained elsewhere in this Act, the Board may, having regard to the interests of capital market and investors in securities, so issue a license to any securities business person that such person is restrained from carrying on any securities, business out of the types of securities business.

59. Board to specify terms and conditions: (1) In issuing a license to carry on securities business, the Board may specify necessary terms and conditions, having regard to the condition of capital market, healthy operation of securities business and interest of investors.

(2) It shall be the duty of the company or body having obtained a license to carry on securities business to comply with the terms and conditions specified by the Board pursuant to subsection (1).

(3) The Board may make necessary modifications and alteration in the terms and conditions specified pursuant to Sub-section (1), having regard to the condition of capital market, healthy operation of securities business and interest of investors. 60. Power to refuse to issue a license to carry on securities business: The Board may refuse to issue a license to carry on securities business to any company or body on the following circumstances:- (a) if it is proved that such company or body has been insolvent upon being unable to repay debts to creditors,

(b) if the application to be made for such a license is not accompanied by such documents and details as required to be accompanied under this Act or the Rules framed under this Act or such other matter as may be specified by the Board, (c) if, upon considering the matters set forth in subsection (2) of Section 58, it is not appropriate to issue a license to carry on securities business.

61. Validity and renewal of a license to carry on securities business: (1) The license issued to a securities business person to carry on securities business under this Act shall remain valid only until the end of that fiscal year in which it has been issued.

(2) The securities business shall have to get such a license renewed by paying the annual fees as prescribed to the Board within three months from the date of expiry of each fiscal year.

(3) In the event of failure to get a license renewed by paying the annual fees within the time-limit referred to in subsection (2), such license may be got renewed by paying a fine of twenty-five percent of the annual fees up to three months from the date of expiry of that time limit.

(4) The Board shall revoke the license of a securities business person who has failed to get such a license renewed even within the time-limit referred to in Sub-section (3), and publish a notice thereof for information to the general public.

62. Power to prescribe for carrying on securities business through a subsidiary company: Notwithstanding anything contained elsewhere in this Act, the Government of Nepal may, on the recommendation of the Board and by notification in the Nepal Gazette, prescribe that a bank or financial institution established under the laws in force is entitled to carry on securities business only through its subsidiary company. Provided that such a subsidiary company shall not be entitled to do other acts except the dealing in securities.

63. Types of securities business: (1) For the purposes of this Act, the securities business shall be divided into the following types:- (a) Securities brokerage,
(b) Securities trade,
(c) Issue and sales management,
(d) Investment management,
(e) Investment consultancy service,
(f) Collective investment fund management,
(g) Securities registration or securities central deposit service or custodial service,
(h) Service relating to the settlement of the account of securities transactions,
(i) Market maker,
(j) Such other business as may be specified by the Board to be a securities business.

(2) The scope and other provisions of the securities business referred to in Sub-section (1) shall be as prescribed. 64. License not to be issued to carry on securities business without specifying agent: (1) No license shall be issued to any one to carry on securities business as a securities broker without specifying at least one person to act as an agent of the securities broker. (2) No license shall be issued to any one to carry on securities business as a securities trader without specifying at least one person to act as an agent of the securities trader.

(3) No license shall be issued to any one to carry on securities business relating to collective investment scheme and investment fund management without specifying at least one person to act as an agent of the scheme manager.

(4) The procedures to be fulfilled in specifying an agent by a securities business person, qualification of the agent and provisions relating thereto shall be as prescribed.

65. Formal agent: (1) Only after the registration of the appointment of any person as an agent of a securities business person with the Board pursuant to Sub-section (3), such a person shall be deemed to be a formal agent for that securities business.

(2) In making registration of the appointment of an agent with the Board pursuant to Sub-section (1), the securities business person shall inform the Board about the appointment of such agent and the person to be appointed as an agent shall also inform the Board that he or she agrees to be an agent of such a securities business person.

(3) Upon receipt of the notice pursuant to Sub-section (2), the Board shall, within fifteen days, make entry in the register as prescribed, specifying the name, address and other necessary details of the agent and issue the agent registration certificate to such an agent.

(4) If the agreement made between the agent and the securities business person appointing the agent is canceled, for any reason whatsoever, information thereof shall be given to the Board immediately, and the agent shall also return the certificate obtained by him or her to the Board within seven days.

(5) The securities business person who appoints a formal agent shall be responsible for all acts done by such a formal agent.

66. Rights of securities business person: (1) No license to carry on securities business obtained by a securities business person shall be suspended or revoked without providing such a securities business person with a reasonable opportunity of hearing. (2) In suspending or revoking a license to carry on securities business, information thereof shall be given in writing to the concerned securities business person, and such a notice shall indicate the reasons for such suspension or revocation, date of entry into force of such suspension or revocation and the period of suspension, in the case of suspension.

(3) A securities business person who is dissatisfied with the decision made to suspend or revoke a license obtained by such a securities business person to carry on securities business person may make an appeal to the concerned Appellate Court within thirty five days from the date of such decision.

67. Minimum capital and financial source of securities business person: (1) A securities business person shall, in carrying on the securities business, maintain the minimum capital and financial source as prescribed.
(2) If a securities business person fails to maintain the minimum capital and financial sources required to be maintained pursuant to Sub-section (1), information thereof shall be given to the Board immediately.
(3) If the Board receives the information referred to in Sub-section (2), it may immediately order such a securities business person to maintain the minimum capital and financial source as prescribed or give other necessary directives in that regard.

68. To maintain records of securities business persons:
(1) The Board shall maintain a register of all licensed securities business persons and maintain updated records in the register.
(2) The following matters shall also be specified in the register to be maintained pursuant to Sub-section (1) and updated records of securities business persons maintained therein:-
(a) Names and addresses of securities business persons,
(b) Date of issue of license to securities business persons,
(c) Types of securities business,
(d) Terms and conditions specified in the license,
(e) Names and addresses of the formal agents,
(f) Names and addresses of managers and officers,
(g) Place where documents and records pertaining to securities business are kept,
(h) Names of the directors of company or body, names of company secretaries and name of each shareholder and number of shares held by such a shareholder,
(i) Such other details as the Board considers necessary and appropriate.

69. Records of formal agents: (1) The Board shall maintain a register of all formal agents and maintain updated records in the register.

(2) The register to be established pursuant to Sub-section (1) shall, inter alia, contain the following matters and also updated records of formal agents shall be maintained therein:-
(a) Name and address of formal agent,
(b) Date of registration as formal agent,
(c) Name and address of securities business person appointing agents,
(d) Such other details as the Board considers necessary and appropriate.

70. Information to be given: The securities business person shall, on any of the following circumstances, give information in writing thereof to the Board within seven days from the date of such occurrence:-
(a) If the securities business person ceases to carry on the securities business specified in the license,
(b) If any formal agent ceases to act in such capacity,
(c) If any alteration is made in any details set forth in the register maintained pursuant to Section 68.

Chapter-6 Collective Investment Scheme

71. No collective investment scheme shall be operated without obtaining a permission: (1) No one shall operate a collective investment scheme or carry out or cause to be carried out, any of the following acts without obtaining a permission from the Board pursuant to this Act:-
(a) To make an advertisement making an invitation to participate in the collective investment scheme or to make an offer containing any kind of information for participating in such a scheme whether directly or indirectly,
(b) To provide opinion, advice or consultation to any one to participate in the collective investment scheme.

(2) Any one who contravenes Sub-section (1) shall be deemed to have committed an offense referred to in this Act.

72. Board to grant permission to operate collective investment scheme: (1) A scheme manager shall, prior to operating the collective investment scheme to be managed and operated by him/her, make an application to the Board in such format and accompanied by such details and fees as may be prescribed in order to register such scheme with the Board and obtain permission to operate the same.

(2) If an application is received pursuant to Sub-section (1), the Board shall, if it considers appropriate to grant permission upon conducting necessary inquiry into the matter, register the collective investment scheme and give permission to operate it within ninety days from the date of receipt of such an application.

(3) If, in conducting an inquiry in relation to the registration of a collective investment scheme and granting a permission to operate it pursuant to Sub-section (1), any notice, description, information or documents appear necessary, the Board may demand such notice, description, information or documents from the concerned scheme manager. The Board shall not grant permission to operate the collective investment scheme unless it receives the notice, description, information or documents so demanded.

(4) In registering a collective investment scheme and in granting permission to operate it pursuant to Sub-section (2), the Board may give permission in a manner that a certificate on participation or a proof thereof is to be given to a participant.

(5) In granting permission to the scheme manager to operate the collective investment scheme pursuant to this Section, the Board may specify necessary terms and conditions in relation to the operation of the collective investment scheme and the issue of the certificate on participation. The Board may make necessary modification or alteration in the terms and conditions so specified.

73. Operation of collective investment scheme: (1) The scheme manager may, with a view to operate a collective investment scheme, and upon considering the needs and interests of participants, operate the collective investment scheme of one or several types and by one or several names as prescribed.

(2) The scheme manager shall, prior to operating any scheme pursuant to Sub-section (1), make an agreement with the depository as prescribed.

74. Board may revoke permission: (1) The Board may revoke the permission granted under Section 72 to operate a collective investment scheme on any of the following circumstances:- (a) In the event of failure to fulfill the necessary terms and conditions of operation in a satisfactory manner, (b) In the event that it is not appropriate to continue such a scheme upon considering the interest of participants, (c) In the event of violation of this Act or the Rules or Bye-laws framed under this Act or provision of any false details to the Board in respect of a scheme by the scheme manager and the depository.

(2) In revoking the permission pursuant to Clause (b) of Sub-section (1), the Board may hold necessary inquiry with the manager, depository, and director related with such scheme or relevant employee.

(3) In revoking the permission given to operate a scheme pursuant to Sub-section (1), the Board may, having regard to the investment and return of investors, get that scheme to be operated by any other scheme manager or get accounts settled or cleared by refunding the investment and return of the investors of such scheme.

(4) The procedures required to be followed in closing the operation of the scheme and settling or clearing the accounts by the order of the Board shall be as prescribed.

75. Other provisions relation to operation of collective investment schemes: (1) Other provisions and operational procedures required to be made and followed for the operation of a collective investment scheme to be operated by a scheme manager in consonance with the interests of participants shall be as prescribed.

(2) The Regulation shall contain the following matters in relation to the operation of a collective investment scheme:
(a) Procedures and terms relating to the registration and permission of the collective investment scheme,
(b) Statute of the collective investment scheme, functions and duties of the scheme manager and depository and rights and obligations of participants,
(c) Promotion of the unit, market management and distribution,
(d) Issue and discount of unit,
(e) Other provisions relating to depository service and scheme,
(f) Regulating and managing the provisions relating to loans and advances of the collective investment scheme,
(g) Provisions relating to the maintenance of records in such manner as to clearly reflect the transactions and financial situation related to the collective investment scheme and provisions relating to inspection of such accounts and other necessary accounts and records,
(h) Periodic reports relating to the collective investment scheme and submission of such reports to the participants of the scheme and the Board,
(i) Fees, remunerations and charges to be collected for the provision of the service referred to in Clause (e),
(j) Management of investment and loan of the fund of the collective investment scheme.

(3) In making the regulation incorporating the provisions referred to in Sub-section (1), in relation to the operation of the collective investment scheme, such regulation may provide for different provisions for different types of collective investment schemes.

Chapter-7 Operation of Securities business

 

76. Business standards: Securities business person shall, in carrying on the securities business, observe the following business principles:-
(a) To maintain the operation of securities business fair and of high standards,
(b) To carry on the securities business with proper skills, care and hard working,
(c) To keep on the higher standard of stock exchanges,
(d) To obtain information from customers as to their objective to make investment and provide services accordingly,
(e) To provide such information and advice as may be required for customers to make decision on investment in securities,
(f) To avoid conflicts of own interests with the interests of customers and, in the event of the existence of such situation, to disclose that matter to customers and carry on the securities business having regard to the interest of customers,
(g) To make such provisions as may be necessary to fulfill commitments made in relation to the securities business,
(h) To properly maintain records relating to the securities business,
(i) To provide for necessary training to employees in order to prepare skilled human resources for the operation of the securities business,
(j) To observe such other principle as prescribed in relation to the operation of the securities business.

77. Provisions relating to identification of investors, purchase and sale order, contract note and payment of money: (1) Provisions relating to obtaining the identification of the concerned investor, opening a customer account, making transaction of money and concluding an agreement relating to transactions by any securities business person prior to carrying on the securities business shall be as prescribed.

(2) Any securities business person shall, upon making a contract on the purchase, sale or exchange of securities, make a contract note before the closing of market on the following day, and where the securities business person has made such a contract as an agent, the original copy of the contract note shall be delivered to the concerned customer and where such person has made such a contract for himself, such a person shall mention that matter in the contract note and retain the note with him.

(3) The contract note referred to in Sub-section (2) shall contain, inter alia, the following matters:-

(a) Type of securities business and place where such business is operated,
(b) Where the securities business person him/herself has acted as the principal, details thereof,
(c) Name and address of the person to whom the contract note is given,
(d) Date of the contract and date on which the contract note is prepared,
(e) Description and quantity of securities,
(f) Per unit value of securities,
(g) Description relating to consideration payable under the contract,
(h) Amount or rate of commission payable under the contract,
(i) If any fee is chargeable, the rate of such fee and description pertaining thereto,
(j) Day on which account is settled or cleared r, e
(k) Such other matters as prescribed.

78. Accounts to be maintained by securities business person : (1) A securities business person shall, maintain accounts and records in such manner as to adequately support the transactions in securities and clearly reflect the financial condition of the transactions done by him/her. While preparing the balance sheet and profit and loss account, it shall be prepared in such manner as to reflect the actual affairs.

(2) The accounts and records maintained by a securities business person pursuant to Sub-section (1) shall clearly and distinctly reflect the moneys paid by his/her customers wishing to purchase securities for the purchase of securities and distinctly reflect the accounts of securities and records, as prescribed.

(3) A securities business person shall prepare and maintain the accounts and records maintained pursuant to Sub-section (1) or

(2) and relevant financial statements and reports in such manner as prescribed. (4) A securities business person shall maintain the accounts and records to be maintained pursuant to this Section in such manner so that such accounts and records can subsequently be examined or inspected easily by the Board or the inspector appointed by the Board or the auditor or the concerned stock exchange if the Board or such inspector or auditor or stock exchange desires to make such an examination or inspection.

79. Insurance to be made: Each securities business person licensed to carry on the securities business, other than an agent, shall procure insurance of the business to be carried on by him/her, as prescribed by the Board.

80. Auditor to be appointed: (1) A securities business person shall appoint an auditor from amongst the auditors enlisted by the Board.

(2) Any director, shareholder, officer employee or partner of a securities business company or body shall be deemed disqualified to be appointed as the auditor of that securities business company or body.

(3) A securities business person shall give information, indicating the name and address also of the auditor appointed by it, to the Board within seven days from the date of such appointment.

(4) If a securities business person removes any auditor from office or such an auditor resigns from office, the securities business person shall give information thereof to the Board within seven days from the date of such removal.

(5) Notwithstanding anything contained elsewhere in this Act, no employee of a stock exchange shall be eligible to be appointed as an auditor of any securities business company or body.

81. To maintain roster of auditors: (1) For the purpose of appointment of auditor pursuant to Section 80, the Board shall prepare a roster of auditors having the prescribed qualification from amongst the auditors registered under the laws enforce.

(2) An auditor who wishes to be enlisted in the roster referred to in Subsection (1) shall make an application to the Board, as prescribed. An auditor who is so enlisted shall submit to the Board such information as may be specified by the Board.

82. Submission of accounts and statements: (1) A securities business person shall submit the audited profit and loss account, balance sheet and cash flow statement and other necessary financial statements clearly reflecting the operational affairs of securities business carried on in the preceding financial year to the Board and the concerned stock exchange within three months from the date on which such a fiscal year is expired.

(2) If a securities business person fails to submit the accounts and statements pursuant to Sub-section (1) and makes an application, accompanied by the reasonable grounds for such failure, to the Board for the extension of time limit, the Board may extend the time limit for a period not exceeding three months. In the event of failure to submit such accounts and statements even within the period of time limit so extended, the Board may fine such securities business person with a sum of five thousand to twenty five thousand rupees.

(3) Notwithstanding anything contained in Sub-section (1) or (2), a securities business person who is not able to submit accounts and statements by the reason of not having them audited within the time limit may submit unaudited accounts and statements on the condition of submission of actual accounts and statements audited subsequently.

83. Report to be made by enlisted auditor to Board: If an enlisted auditor, in auditing the accounts of a securities business person, finds that such securities business person has violated the financial Bye-laws, the auditor shall prepare a separate report thereof and submit it to the Board.