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Regulators failed in Controlling Insider Trading: Stakeholders

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Regulators failed in Controlling Insider Trading: Stakeholders
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July 12: Stakeholders criticised stock market regulators on failure to control insider trading in which speculators gain profit by leaking internal information of the company. They expressed such opinion in the meeting organised by Securities Board of Nepal in a bid to collect suggestions on the program ‘Policies and Programs for Capital Market Expansion and Development in FY 2073/74’.

Stakeholders’ such opinion in the program created argument between SEBON and Nepal Stock Exchange (NEPSE).

In the program, Aatma Ram Ghimire, Chairman of Nepal Investors’ Forum stated that there is no meaning of conducting a meeting if investors’ complaints are not heard. “Earlier also, we have given many suggestions. However, none of them has been implemented,” he complained. Ghimire suggested SEBON and NEPSE to mutually work for the common interest of share investors regarding identity card, easy information and promotion of D-mat account and automated trading system (online trading software).

Additionally, he suggested both regulators to end blaming game on insider trading case and take required steps ASAP as it is already too late. He further said “Board members of the companies are themselves involved in share trading in the name of relatives and confidants. SEBON should end the practice through conducting investigation and taking proper action against them.” In the meeting, most of the speakers suggested SEBON to create proper environment to facilitate non residence Nepalis to invest in the stock market.

Meanwhile, Krishna Raj Lamichanne, Chairman of Development Bankers’ Association suggested to end long share trading closure of any company under going merger process.  “Share trading need not to be halted after the final evaluation of total assets and liabilities of the companies are done,” he said. Similarly, he added “Share investors’ money invested in initial public offering (IPO) should be returned to all types of BFIs accounts. Share investors who do not have access to commercial banks will suffer when the money is returned to commercial banks only.”

Likewise, representatives of Nepal Microfinance Bankers’ Association demanded of allowing microfinance development banks to invest in the IPOs of other companies. They demanded separate allocation of IPO shares for microfinance banks as well as of mutual funds. Furthermore, they demanded reduction of commission for small companies while issuing IPOs.

In the program, officials of NEPSE informed of difficulty in operating daily task due to the shortage of employees. Reacting to the statement, SEBON addressed that human resource management is the primary responsibility of NEPSE thus failure to conduct the tasks due to any reason is not acceptable.

 

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