Kathmandu. The Securities Board of Nepal (SEBON) is preparing to set a timeline in the initial public offering (IPO) approval process. The ‘Standard Operating Procedure’ (SOP) is being prepared to clarify the time at which the files that come to the board for the IPO issuance will stay at which level and through which process to proceed.

In a meeting of the Finance Committee of the Federal Parliament on Wednesday, the chairman of the board, Dr. Gopal Prasad Bhatta has said that the SOP is necessary to make the IPO approval process systematic. According to him, since the files related to the IPO will go to the board for study and review at different levels, the responsibilities of each level and the time limit for moving the file forward will be clarified. The board hopes that this will end the situation of holding the files that have completed the process unnecessarily for a long time.

“We are making a standard operating procedure for IPO approval. There are different levels in the board. We are making a clear system of which file has reached which level and how to proceed from there,” Bhatt told the committee.

At present, the documents and files submitted by the company for IPO approval are studied at various levels within the board. The file will proceed in the approval process only after reviewing the financial, legal, technical and other necessary aspects.

In the SOP to be made, preparations are being made to manage the process to be completed after the file reaches which level, what will be the responsibility of the concerned level and within how much time the file will be sent to the next stage. Chairman Bhatt said that the attempt is to end the situation of unnecessarily blocking files that do not have legal or other problems.

This is expected to reduce the uncertainty faced by the company in the IPO approval process. However, the process will also have to include the documents submitted by the company, regulatory scrutiny and approvals required by other agencies before the approval period is fixed.

Board Chairman Bhatt indicated that a system is being developed to know the level of the IPO file. According to him, the review of financial and other details related to the company, necessary approvals from the government bodies and the examination of the board will be arranged in different phases. After the file reaches the concerned level, the necessary work will be carried out from the same level and after the process is completed, the board will make arrangements to send it to the next level.

Plan to streamline other regulatory processes including IPOs

Chairman Bhatt said that along with the process of IPO approval, other functions of the board will also be managed in a procedural manner. He said that the information and disclosure that companies have to give to the investors in the capital market should be provided on time. He said that necessary action will be taken if the company does not fulfill its regulatory obligations.

Chairman Bhatta said that the board is also working on expanding the system of margin trading, developing new financial instruments and involving small investors in investment through mutual funds. According to him, discussions will be held with investors, listed companies, brokers and other stakeholders before formulating new policies and procedures in the coming days.