The Securities Board of Nepal (SEBON) has updated the underwriting capabilities of merchant banks that act as offshoots of banking and insurance institutions. The regulatory authority has opted to modify the Merchant Banker Regulations, raising the highest underwriting threshold for these entities.
As stated by SEBON spokesman Niranjaya Ghimire, merchant banks affiliated with banks and insurance firms will now have the capacity to underwrite securities up to the net equity of their respective organizations, contingent upon the banks and insurance firms providing liability assurances.
Earlier, these merchant banks were authorized to underwrite securities up to three times their net equity. However, this stipulation had not yet been included in the Merchant Banker Regulations’ appendix. SEBON has indicated that the requisite amendments will be officially incorporated shortly.
