NCC Criticizes CDSC’s New Guidelines as Risky For Nepal’s Share Market

2nd August 2025, Kathmandu

The Nepal Chamber of Commerce (NCC) has issued a sharp critique of the “Securities Dematerialization Operational Guidelines 2082” proposed by CDS and Clearing Limited (CDSC).

NCC Criticizes CDSC’s New Guidelines

The NCC labels the new provisions as “impractical,” “investor-unfriendly,” and a significant risk that could introduce “uncertainty and insecurity” into Nepal’s burgeoning capital market.

At the heart of the NCC’s concern are two key proposals: the assignment of distinct ISIN numbers for promoter and public shares, and the elimination of automatic conversion of promoter shares into public shares after the mandatory lock-in period.

The Chamber argues that these changes contradict established international practices and could have far-reaching negative consequences for the nation’s stock market.

Undermining Investor Confidence and Market Stability

According to the NCC, implementing these guidelines would severely weaken investor confidence, potentially impacting crucial sectors of the Nepalese economy, including energy, cement, hospitality, manufacturing, and media.

The Chamber’s official press release explicitly states, “This directive goes against the interest of investors and will add uncertainty and insecurity in Nepal’s already immature capital market.”

The NCC also highlighted a concerning reversal in CDSC’s stance. Having previously halted share dematerialization in recent years, CDSC’s sudden introduction of this directive, particularly with the new ISIN and conversion blocking provisions, has created a “crisis of trust” within the market.

This abrupt shift, in a market already struggling to become fully investment-friendly, has generated significant negative sentiment.

A Call for Immediate Amendment and SEBON Intervention

The Nepal Chamber of Commerce has urgently called upon the government and regulatory authorities to amend the proposed directive. They advocate for a more “practical and investment-friendly” approach, warning that a failure to do so could lead to further erosion of investor confidence, a stagnation of promoter shares, and exacerbate existing liquidity issues in the market.

To safeguard investor interests, maintain private sector confidence, and ensure the continued development of Nepal’s capital market, the NCC has also appealed to the Securities Board of Nepal (SEBON) to thoroughly reconsider the guidelines put forth by CDSC.

The Chamber emphasizes that SEBON, as the apex regulator, has a critical role in fostering a fair, transparent, and efficient securities market. The outcome of this debate will be crucial for the trajectory of Nepal’s capital market in the years to come.

For more: NCC Criticizes CDSC’s New Guidelines