Prospectus of financial instruments to be more informative‚ says Sebon - Himalayan Times


KATHMANDU: Prospective investors will find offer letters for share and debenture issues more informative as it will contain the well-defined credit rating of the instrument being offered

to the public.

“Since the symbols used by the credit rating agencies to denote the credit worthiness of certain instruments will not be enough for a layperson to understand, we are changing the template to incorporate the credit rating and the significance of the assigned symbols,” pointed out spokesperson of the capital market regulator — Securities Board of Nepal (Sebon) — Niraj Giri.

“The prospectus of any instrument such as shares, bonds and debentures to be issued for the public requires to have a rating provided by a credit rating agency on the cover page itself, but investors need to understand the significance of these ratings assigned,” he added.

Icra Nepal — the only credit rating agency in Nepal — has already released its first credit rating of Himalayan Bank’s bond worth Rs 750 million. It has given the bonds a rating of ICRANP-LA, stating the bond is adequately safe for long-term investment.

According to the Credit Rating Agency Regulation 2068, companies planning to issue ordinary shares, bonds, debentures, rights shares and preference shares exceeding Rs 30 million in value have to get themselves rated by a rating agency.

“We are finalising the ratings of seven more companies and instruments whose results will soon be released,” said chief executive of Icra Nepal Dipak Kafle. To rate a company or instrument, ICRA assesses the value to the company’s performance, financial details and state of governance of the company, among others.

“We are also aware that the symbol summary needs to be understood by investors and we will try to define it as clearly as possible,” added Kafle.

Sebon had made credit rating mandatory for companies applying to hold public issues exceeding Rs 30 million, back in February. However, the initial public offerings and rights issues belonging to commercial banks, development banks, finance companies, microfinance development banks and insurance companies do not need to go through credit rating procedure till mid-July 2013.

“This provision is valid only for financial intermediaries

that are offering shares — ordinary or rights — to increase

the regulatory paid up capital

till the end of the current fiscal year,” said Giri.

Commercial banks have to increase their paid up capital to Rs two billion, while national development banks and finance companies are required to increase their paid up capital to Rs 640 million and Rs 200 million, respectively, by mid-July 2013. Likewise, non-life insurance companies have a deadline of mid-July 2013 to increase their paid up capital to Rs 250 million, while life insurance companies have to increase their paid up capital to Rs 500 million by the deadline, as per the Insurance Board’s directive.

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Financial Instruments in 2014-2020 ETC - Online questionnaire - INTERACT Programme


Financial Instruments in 2014-2020 ETC - Online questionnaire

DG REGIO proposes to set-up a Technical Assistance Platform for Financial Instruments in 2014-2020. This framework will provide advisory and capacity enhancement services to Member States, Managing Authorities and relevant stakeholders for all stages of delivering Financial Instruments. 

To soundly prepare the scope and activities of the envisaged TA platform, DG REGIO B3 launched an online survey to identify the specific TA needs of Managing Authorities when it comes to designing and implementing Financial Instruments under the cohesion policy framework.

This is a chance for ETC programmes to express interest, concerns and ideas about Financial Instruments and ask the European Commission, the European Investment Bank and the European Investment Fund for support with designing and piloting the implementation of new and innovative Financial Instruments, which are suitable for multi country programmes.

Please use the following link to access the online questionnaire for TA survey:

The deadline for responses is 10 May 2013.