If you have watched NEPSE notices this year, you have seen the pattern: a promoter or major shareholder announces plans to sell hundreds of thousands of shares, the notice hits the exchange, and the stock spends the next fortnight under selling pressure. On September 24, 2026, the Securities Board of Nepal published a formal concept paper defending the rule behind those notices, the requirement that a fundamental shareholder give at least 15 days' advance notice before selling 5 percent or more of their own holding. Here is the honest version: the rule itself is already in force, nothing about it changes today, and the paper itself concedes that 15 days is longer than the rest of the world. This is a regulator explaining itself, not announcing a reform. The explanation is worth reading, because it tells you what SEBON thinks your notices are for.
The document is the "Concept Paper on the Advance-Notice Arrangement for Share Sales by Fundamental Shareholders, International Practice and the Proposed Regulatory Framework, 2083," dated Ashoj 7, 2083 and published on SEBON's official website (the notice text and the full PDF are both there). The underlying rule dates to Bhadra 9, 2083, when SEBON used Section 84(1) of the Securities Act, 2063 to direct that any fundamental shareholder intending to sell 5 percent or more of their own holding must inform the company at least 15 days ahead, with the company disclosing it through NEPSE, as reported by Aarthik News. The notice stays valid for three months. That is the arrangement everyone keeps arguing about, so the paper starts by defining exactly who it covers: a fundamental shareholder is anyone holding 1 percent or more of a listed company whose paid-up capital exceeds Rs 25 crore, or 5 percent or more in other companies.
The mechanics are simple on paper. Fundamental shareholder decides to sell 5 percent or more of their own holding, informs the company at least 15 days before the sale, the company publishes it via NEPSE, and the notice remains valid for three months. The paper insists on one distinction that most investors get wrong: a notice is not a sale. The disclosure announces an intention to sell, not a completed transaction, and SEBON wants every notice to carry a standardized statement saying so, precisely because the market keeps reading notices as done deals. If the shareholder does not sell within the validity period, the notice lapses and a fresh one is required. The proposed disclosure is standardized too: shareholder name, category (promoter, fundamental, or significant), company and symbol, total holding, percentage of paid-up capital, proposed sale quantity, percentage of the holding being sold, proposed sale period, and a declaration that the sale complies with lock-in rules and that no undisclosed price-sensitive information exists. Two things are deliberately not disclosed: the price the seller hopes to get, and the broker or order strategy they will use.
The paper's strongest chapter is its international comparison, because it quietly turns into an admission. India requires its significant shareholders to disclose holding changes within two working days after the trade, though its Offer for Sale system does demand an announcement at least one trading day before a promoter sale. The United States files its proposed-sale notice under Rule 144 (threshold: 5,000 shares or US$50,000 in a three-month window), while insider trades are disclosed after the fact on Form 4. The United Kingdom works on thresholds of 3 percent up to 10 percent, then 1 percent steps, with disclosure within two trading days of the event. Singapore gives its substantial shareholders two business days after the change; Malaysia generally three days. Bangladesh is the closest to Nepal, with a written pre-sale declaration model. Against that backdrop, SEBON states plainly that a 15-day public pre-disclosure window is relatively long by international standards. This is the paper's honest paragraph, and it is why the rule has a fight on its hands: as MeroLagani reported, the bankers' association CIBIFIN and market investors have already pushed back, arguing the framework squeezes the market and discourages investment.
So why does SEBON think Nepal is special enough to keep the long window? The paper lists the market-structure reasons: high ownership concentration, low free-float in several companies, thin liquidity, large promoter holdings, heavy retail participation, and concentrated supply in a few securities. In a market where one seller can be the whole supply curve, fifteen days of warning gives the regulator something it cannot buy elsewhere: a surveillance trail. The paper maps it as a timeline, T-15 for the public notice, then abnormal trading and price moves flagged at T-10, T-7 and T-5, and the actual sale at T. Without the advance notice, the regulator says, it cannot compare what a shareholder planned to sell with what actually traded, which makes policing insider trading and market abuse structurally harder. The advance notice is not only a fairness device for small investors. It is also an enforcement instrument.
And enforcement is where the paper gets ambitious. Beyond defending the existing rule, SEBON proposes a four-tier "Material Significant Shareholder Sale Disclosure Framework": first, a regulatory notification logged in a NEPSE/SEBON electronic system; second, the public disclosure via NEPSE; third, automated surveillance matching the announced sale against actual order and trade data; fourth, a post-trade confirmation publishing the actual quantity sold, the price, the trade date and the remaining holding. The chain is designed to run end to end, pre-disclosure to market monitoring to execution to post-disclosure, and it closes the loop the current rule leaves open: today a notice goes out and nobody systematically checks what happened afterward. The principles behind it are sensible on their face: the notice must not function as an approval system blocking sales, it must apply only to material transactions, it must give every investor equal information, it must never be read as proof a trade happened, and the 15-day period itself must be revisited against real liquidity and impact data as the market deepens. Small, market-irrelevant sales should be freed from the disclosure burden through a materiality test.
What should investors actually do with all this? The practical takeaways are modest and durable. A promoter notice on NEPSE is a signal of potential future supply, not a completed sale, and not a recommendation in either direction; the paper says so explicitly, and retail investors who treat notices as confirmed selling are misreading the instrument. The three-month validity window matters: an August notice that never converts into trades expires on its own. And the debate is live, not settled. SEBON's own paper leaves the 15-day period open to review as the market matures, while the banking lobby is already lobbying against the framework's teeth. What happens next is a consultation outcome, not a decree. The unresolved question the paper leaves hanging is the one investors should keep asking: in a market where every big seller must announce themselves, does the warning protect small investors, or does it just start the selling earlier? The paper has an answer. The market gets to test it.
This article is research and education, not investment advice. It summarizes SEBON's official concept paper published on September 24, 2026; for the full text, see the original notice on sebon.gov.np. Nothing described here is yet in force.