SEBON’s 15-Day Advance Notice Rule for Major Share Sales Sparks Debate

Nepal’s capital market is witnessing a debate over the disclosure requirements for substantial shareholders selling large quantities of shares in companies listed on the Nepal Stock Exchange (NEPSE).

The Securities Board of Nepal (SEBON) has introduced an advance-notice requirement for substantial shareholders intending to sell 5% or more of their shareholding. The regulatory framework has generated discussion about market transparency, investor protection, share price movements and the freedom of shareholders to sell their investments.

Amid this debate, share market author and analyst Rabindra Bhattarai has suggested an alternative approach: instead of making the sale public in advance, companies should disclose complete transaction details after the sale has been completed and settled.

His proposal has brought two approaches to the forefront of Nepal’s stock market discussion — advance disclosure before a major share sale and mandatory disclosure after the transaction.

What Is SEBON’s 15-Day Advance Notice Requirement?

SEBON’s advance-disclosure framework concerns substantial shareholders of companies listed on NEPSE who intend to sell 5% or more of their shareholding.

Under the requirement, the shareholder must notify the concerned company at least 15 days before the proposed sale. The company is then responsible for arranging public disclosure through NEPSE.

SEBON published a concept paper on the rationale, international practices and proposed regulatory framework on September 23, 2026. The regulator has stated that the arrangement is intended to strengthen market surveillance, improve transparency and protect investors.

SEBON

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The key objectives of the advance-notice mechanism include:

• Giving investors access to information about potential large share sales.

• Improving visibility into the possible supply of shares in the market.

• Helping investors assess the potential impact of substantial share sales.

• Supporting regulatory monitoring of unusual price movements and possible market abuse.

• Promoting transparency and investor confidence in Nepal’s capital market.

However, the timing of public disclosure has become a central point of discussion among market participants.

Why Does Rabindra Bhattarai Oppose Advance Disclosure?

Rabindra Bhattarai has expressed disagreement with publicly announcing a major share sale before the transaction takes place.

According to his view, transparency is essential, but the timing of disclosure also matters. Publishing information about a planned sale well before the actual transaction could influence investor psychology and trading decisions.

When investors learn that a substantial shareholder intends to sell a large number of shares, they may react before the sale is executed. Some may decide to sell their own holdings, while potential buyers may postpone their purchases.

Such reactions could affect the balance between demand and supply, potentially creating additional selling pressure and price volatility.

Bhattarai’s argument is that advance disclosure could cause the market to react to an intended transaction before the actual sale takes place.

In his view, the regulatory objective should be to ensure that all investors receive complete and timely information without unnecessarily influencing the natural price-discovery process.

Rabindra Bhattarai’s Alternative: Mandatory Post-Trade Disclosure

As an alternative to the 15-day advance notice, Bhattarai has proposed a mandatory post-trade disclosure system.

Under his suggested approach, company directors, promoters, senior officials and substantial shareholders would be required to disclose complete details of their share sales within three days after settlement is completed.

The disclosure would be made through the concerned listed company, with the information made easily accessible to all investors through the NEPSE website.

The proposed disclosure should include the following details:

• Seller’s identity: The name of the shareholder who sold the shares.

• Transaction date: When the share sale took place.

• Quantity sold: The total number of shares sold.

• Sale price: The price at which the shares were sold.

• Transaction details: Complete information necessary to understand the completed sale.

This approach would allow investors to examine actual transactions rather than respond to an announcement of a possible future sale.

The three-day period is Bhattarai’s suggested timeline, not a confirmation of an already adopted replacement rule.

How Would Post-Trade Disclosure Affect Nepal’s Stock Market?

A post-trade disclosure system could change how investors receive and interpret information about substantial share sales.

1. Greater transparency about completed transactions

Investors would be able to review the actual quantity sold, transaction price and identity of the seller.

This information could help market participants evaluate changes in share ownership and assess the implications for a listed company.

2. Less reaction to uncompleted sale intentions

Under Bhattarai’s proposal, the market would not receive a public announcement 15 days before the intended transaction.

This could reduce trading reactions triggered solely by advance announcements. However, it would also mean investors might not know about a planned large sale before it occurs.

3. More information for fundamental and technical analysis

Verified transaction details could become another input for investors conducting company research, monitoring supply and demand, and evaluating market sentiment.

Investors would still need to consider other factors, including company fundamentals, financial performance, valuation and overall market conditions.

4. Stronger accountability through penalties

Bhattarai has also suggested strict fines and regulatory action against companies or responsible parties that fail to disclose the required information within the stipulated period.

Effective enforcement would be essential to ensure that post-trade disclosure is timely, complete and accessible.

SEBON’s Advance Notice vs. Bhattarai’s Post-Trade Disclosure

The two approaches differ mainly in when the market receives information about a substantial share sale.

The approaches reflect different regulatory priorities. Advance notice gives investors information before a potential large sale, while post-trade disclosure focuses on reporting the actual transaction after completion.

Neither approach eliminates every risk. The practical outcome would depend on the disclosure requirements, enforcement mechanisms and how investors respond to the information.

Why Is This Debate Important for NEPSE Investors?

The disclosure of major share sales can be relevant to retail investors, institutional investors and long-term shareholders alike.

A substantial sale may increase the available supply of a company's shares. However, the announcement of a possible sale does not necessarily mean that the transaction will occur exactly as intended or that the share price will decline.

Similarly, a completed sale does not automatically indicate that a company’s fundamentals have weakened.

Investors should distinguish between a shareholder’s decision to sell and the financial condition of the underlying business.

For those following NEPSE market analysis , information about major share transactions can be considered alongside trading volume, price trends, company earnings, valuation and other relevant data.

Understanding how regulatory announcements influence investor psychology is also an important part of learning to analyse the Nepalese stock market.

Investors interested in developing these skills can explore share market training in Nepal , covering fundamental analysis, technical analysis and market behaviour.

What Happens Next?

SEBON’s concept paper has brought the timing and scope of major share sale disclosures into public discussion. The regulator’s stated objectives include investor protection, transparency and stronger market surveillance.

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Bhattarai’s alternative highlights a different concern: whether public disclosure well before a transaction could influence trading behaviour and price discovery.

The final regulatory position will depend on SEBON’s applicable directives, the feedback received from stakeholders and any subsequent amendments or clarifications.

Investors should refer to official SEBON and NEPSE notices for the latest requirements rather than assume that a suggested alternative has already replaced the existing framework.

Frequently Asked Questions (FAQs)

1. What is SEBON’s 15-day share sale notice rule?

The requirement concerns substantial shareholders intending to sell 5% or more of their shareholding. They must notify the concerned company at least 15 days before the proposed sale, with public disclosure arranged through NEPSE.

2. Why does Rabindra Bhattarai oppose advance share sale disclosure?

Bhattarai argues that advance announcements may influence investor psychology and create buying or selling pressure before the actual transaction takes place.

3. What is Rabindra Bhattarai’s alternative proposal?

He has proposed mandatory disclosure of completed share sales within three days after settlement, including the seller’s identity, transaction date, quantity and sale price.

4. Is the three-day post-trade disclosure rule already implemented?

The three-day period discussed here is Bhattarai’s recommendation. It should not be treated as an implemented replacement for SEBON’s advance-notice requirement without an official regulatory announcement.

5. How could advance disclosure affect NEPSE share prices?

An announcement of a potential large sale may influence investor expectations and trading decisions. The actual price impact would depend on factors such as demand, available supply, market conditions and the company’s fundamentals.

6. Where can investors check major share sale disclosures?

Investors can check official announcements published through NEPSE  and regulatory updates from SEBON .

7. Why is share market education important for understanding SEBON regulations?

Understanding market regulations helps investors interpret disclosures, assess potential risks and distinguish regulatory developments from company-specific financial information. Stock market training can also help investors develop fundamental and technical analysis skills.

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  Disclaimer: This article is for educational and informational purposes only. It does not constitute investment advice. Readers should verify applicable rules and regulatory updates through official SEBON and NEPSE announcements.