Chapter-1 Preliminary

1. Short title and commencement:

(1) This Act may be called “Securities Act, 2063”. (2) This Act shall be deemed to have been commenced from 6 Ashoj 2063 (September 22, 2006). 2. Definitions: Unless the subject or the context otherwise requires, in this Act,-

(a) “Chairperson” means the Chairperson of the Board appointed under Section 7.

(b) “License” means the license issued by the Board under this Act to operate the stock exchange or securities business.

(c) “Company” means a company incorporated under the company laws force.

(d) “Depository means a bank or financial institution that makes agreement with the scheme manager and thereby undertakes the responsibility of providing custodial services such as safe holding and operating the assets of any collective investment scheme.

(e) “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules framed under this Act.

(f) “Securities” means any shares, stocks, bonds, debentures, debenture stocks or collective investment scheme certificate issued by a body corporate or treasury bonds, saving bonds or bonds issued by the Government of Nepal or by a body corporate against the guarantee of the of the Government of Nepal, and this term also includes such other securities as may be specified by the Board to be transacted or transferable through the stock exchange or the instrument to purchase, sell or exchange such securities.

(g) ” Securities transactions ” means the issue, purchase, sale or exchange of securities and other acts pertaining thereto;

(h) “Registration of securities” means the registration of securities by a body corporate with the Board pursuant to Section 27.

(i) “Stock exchange” means a market, place or facility performing the purchase, sale or exchange of securities on regular basis by bringing together to the purchasers and sellers of securities.

(j) ” Securities business” means transactions in securities to be carried on by a company or body licensed to carry on the securities business under this Act.

(k) “Securities business person” means a company or body licensed under Section 58 to carry on securities business.

(l) “Issuance” means an offer made by a body corporate to raise capital and acts related there to, and this term also includes the issuance of securities to promoters.

(m) “Private placement” means an act to make an offer by a letter, dispatch or any electronic communication media for the sale of securities to a maximum of fifty investors.

(n) “Board” means the Nepal Securities Board established under Section-3.

(o) “Exchange” means an act concerning purchase, sale or transfer of securities already issued pursuant to this Act.

(p) “Prospectus” means a prospectus required to be published by a body corporate pursuant to Section 30 prior to he public issue of securities.

(q) “Scheme manager” means a body corporate managing a collective investment scheme of participants with an object to provide an efficient investment service pursuant to this Act.

(r) “Investment fund” means a fund created out of amounts deposited by participants in a collective investment scheme in accordance with a contract as has been taken in its custody by a scheme manager with object to provide an efficient investment service or assets related with such a fund, and this term also includes a fund which the scheme manager has taken in its responsibility in accordance with this Act or additional assets created from management of investment of assets and amount accumulated by way of considers anion.

(s) “Participant” means a person or body that makes investment in a collective investment scheme operated by a scheme manager pursuant to this Act.

(t) “Member” means a member of the Board, and this term also includes the Chairperson.

(u) “Body corporate” means a body corporate established under prevailing which has the capacity of public issuance of securities . Provided that, it shall not include a corporative bodys.

(v) “Public issue” means an offer made by a body corporate before the general public for the subscription of its securities by publishing a prospectus.

(w) Collective investment scheme” means such an investment fund, unit trust or similar other participatory fund management program as specified by the Board, from time to time as may be operated by a scheme manager in accordance with this Act in order to distribute returns to, the participants of the concerned program proportionately, accrued from the efficient investment service on saving investment amount which has been undertaken in custody of the manager and so mobilized that various persons or bodies that have participation in it.

(x) “Enlisting” means the enlisting of securities on a stock exchange for the purposes of purchasing, selling or exchanging securities through the stock exchange;

(y) “Right issue” means an offer made to the existing shareholder or any person nominated by such shareholder for the subscription of any securities issued by a body corporate.