Non-Life Insurance Association Calls for Revision of Share Sale Restrictions

Kathmandu – The Nepal Non-Life Insurance Association has urged the Securities Board of Nepal (SEBON) to amend a provision that prohibits corporate directors from selling their shares for one year after resigning from their positions. The association claims that this regulation, outlined in Rule 38 (1A) of the Securities Registration and Issuance Regulations 2079, is impractical and unfair.

In a formal statement, the association emphasized that directors, like other shareholders, are also investors with financial stakes in the company. It argued that restricting their ability to sell shares undermines their financial interests and creates unnecessary hurdles. “The provision regarding the sale of shares is extremely impractical. Directors, elected by the shareholders’ general meeting, should not be restricted from selling their shares as they too have financial interests in the company,” the statement read.

Rajendra Malla, president of the association and also the current president of the Nepal Chamber of Commerce, argued that such restrictions hinder business diversification and essential financial activities. He pointed out that limitations on share sales hinder business diversification, essential financial activities, and even basic household financial management.

A delegation led by Malla met with SEBON Chairman Santosh Narayan Shrestha to discuss the issue. The team proposed a revision to the rule, suggesting that directors be allowed to sell up to 50 percent of their shares even while holding office.

The association also expressed concerns that the restrictive policy could deter both local and foreign investments, negatively impacting Nepal’s investment climate. It urged SEBON to address the issue promptly to create a more equitable and investor-friendly environment.