Understanding the Lock-In Period as per Section 38 of the Securities Registration and Issue Regulation 2063:
- Three-Year
Restriction on Securities:
- Securities issued by organized institutions in Nepal, excluding those released through a public prospectus, are subject to a three-year lock-in period. During this time, these securities cannot be sold following the allotment for primary public issuance.
- Key
Exceptions to the Lock-In Period:
- Securities owned by registered investment funds, such as private equity, venture capital, or hedge funds, or by foreign government institutions approved to invest in Nepal, can be sold after just one year from the date of allotment in an initial public offering (IPO).
Restrictions on Directors and Management in Nepal's
Securities Market:
- Prohibitions
for Key Personnel:
- Directors, chief executives, auditors, company secretaries, and anyone involved in the management or accounting of an organized institution in Nepal are restricted from buying, selling, transferring, or transacting in the institution’s securities or those of its subsidiaries during their tenure. This restriction extends to one-year post-retirement and applies to transactions in their name, their family's name, or any entities under their control.
Approval Process for Sale or Transfer of Securities
During the Lock-In Period:
- Overcoming
Operational Obstructions:
- If
the operation of an organized institution in Nepal is obstructed due to
the lock-in period's restrictions on selling or transferring securities,
the board may grant special approval for these transactions between
shareholders.