Nepal Chamber of Commerce Raises Concerns Over New CDS & Clearing Limited (CDSC) Directive, Threatening Nepal’s Stock Market
Hey stock market enthusiasts and investors! Today, we’re diving deep into a significant development impacting the Nepalese stock market. The Nepal Chamber of Commerce has expressed serious concerns regarding the recently released “Securities Dematerialization Operational Directive 2082” by CDS & Clearing Limited (CDSC). This directive proposes several new provisions that the Chamber believes are impractical, detrimental to investment, and could introduce significant uncertainty into the share market.
The Chamber is particularly focused on the CDSC’s plan to assign different ISIN numbers to dematerialized securities held by founders and the general public. They are also concerned about the provision that prevents the automatic conversion of founder shares to public shares after the lock-in period.
The Nepal Chamber of Commerce has highlighted the potential for long-term negative consequences if the CDSC directive is implemented. They anticipate a decline in investor confidence, especially within key sectors like energy, cement, hotels, manufacturing, and media. The Chamber believes these changes contradict international standards and established practices within the capital market.
Their statement underscores the potential harm to investor interests. They suggest that such measures could create confusion and insecurity within Nepal’s still-developing capital market. This is a crucial moment for stock market participants.
Adding to the concerns, the Chamber notes that the CDSC has already paused the dematerialization process for some time. Now, the introduction of this new directive, which will prevent the automatic conversion of founder shares and introduce separate ISIN numbers for different share categories, creates a crisis of trust in the stock market.
The Chamber emphasizes the importance of a supportive and investment-friendly environment. They point out that the CDSC is essentially reversing its previous standards with these new regulations, creating a negative sentiment in the market. This is a significant challenge for Nepalese stock market analysis.
The Nepal Chamber of Commerce is urging the government and regulatory bodies to amend the directive immediately. They are advocating for a practical and investor-friendly approach. They warn of severe risks, including eroding investor confidence, increased inactivity of founder shares, and potential liquidity crises in the market if the directive remains unchanged. This could severely impact trading in Nepal.
To safeguard the overall development of Nepal’s capital market, protect investment, and maintain the confidence of the private sector, the Chamber has appealed to the Securities Board of Nepal (Sebon) to reconsider the directive. They are seeking a more cautious and considered approach to navigate the complex stock market investment landscape. The future of Nepalese stocks may be at stake. This information is crucial for any stock market news follower.
