chhatramani/nepal_legal_acts_corpus_english huggingface dataset:
Administration of Justice Act, 2016

22. Surprise Inspection: (1) The Supreme Court may, by assigning a judge of its court, conduct a surprise inspection of the judicial work and proceedings of High Courts and District Courts; the High Court may, by assigning a judge of its court, conduct a surprise inspection of subordinate District Courts or the offices of judicial or quasi-judicial bodies or officers; and the District Court may, by assigning a judge of its court, conduct a surprise inspection of the bodies or officers whose appeals it hears.

(2) The judge inspecting under sub-section (1) shall prepare an inspection report specifying the facts observed from the inspection and submit such report to the Supreme Court, the Judicial Council, the concerned High Court; and in case of inspection of the office of a quasi-judicial body or officer, such report shall also be given to the concerned ministry and the concerned body authorized to act on behalf of the provincial government.

(3) The Supreme Court may assign any judge of the Supreme Court, High Court or District Court to conduct a surprise inspection of the work and proceedings in any case or matter by any body or officer and submit a report.

(4) The judge assigned to inspect under sub-section (3) shall, after completing the inspection work, prepare an inspection and evaluation report and send such report to the Supreme Court and the concerned ministry and the concerned body authorized to act on behalf of the provincial government. 23. Sending of Letter for Action: (1) If, from the inspection report made under this Act, it appears that any judge or officer has made any kind of error in relation to a case or matter, or has failed to do work required to be done, warranting action or prosecution against him/her, the Supreme Court may, stating the basis and reason thereof, send a letter to the Judicial Council or the concerned ministry.

(2) Notwithstanding anything contained in sub-section (1), the Judicial Council or the concerned body may, on the basis of the inspection report submitted before it, initiate a process for action or prosecution against the concerned judge or officer, stating the reason. 24.
Administration of Justice Act, 2016

24. Power to Conduct Inquiry: (1) If the Chief Justice considers that any employee working in a court has committed irregularity in the work done by the court, or if a complaint or information is received through any source in that regard, the Chief Justice may assign any gazetted officer working in the court to conduct an inquiry.

(2) The officer assigned to conduct an inquiry under sub-section (1) shall, within seven days of completing the assigned task, submit a report to the Chief Justice stating the details of the work done in that regard along with his/her opinion.

(3) If it appears from the report received under sub-section (2) that an irregularity has been committed by any employee, a letter shall be sent to the concerned body or officer to take necessary action against such employee. Chapter-6
Miscellaneous

25. Provision relating to Closed Hearing: (1) Cases required to be heard in a closed hearing under the prevailing law shall be heard in a closed hearing.

(2) Other provisions relating to closed hearing shall be as prescribed. 26. Special Provision for Hearing Habeas Corpus Petitions: (1) If a court is to remain closed for a period of three days or more, a judge shall be assigned as follows for receiving and hearing habeas corpus petitions during such holiday period:-
(a) In the case of Kathmandu Valley, a Judge of the Supreme Court designated by the Chief Justice,
(b) In the case of a district where a High Court and District Court are located, a Judge of the concerned High Court designated by the Chief Judge of the High Court. Explanation: For the purposes of this clause, "High Court" shall also mean the seat of the High Court.

(c) In places other than those under clauses (a) and (b) where a District Court is located, the District Judge of the concerned District Court, and if there is more than one District Judge in such District Court, the District Judge designated by the District Judge acting as the head.

(2) Notwithstanding anything contained in this Act or other prevailing law, the judge designated under sub-section (1) may, during the holiday period, issue an appropriate order upon a petition filed in the concerned court, and the concerned office-holder shall execute such order even during the holiday period.

(3) The place for filing petitions and hearing them under this section shall be as determined by the judge designated under sub-section (1). 27.
Administration of Justice Act, 2016

27. Issuance of Search Warrant: (1) In proceedings upon a habeas corpus petition, the court may issue a search warrant in the following circumstances to ascertain the truth of the facts:-
(a) If there is any reason for the court to believe that the detainee is being detained in an inhuman manner or is being subjected to unlawful torture, or
(b) If the petitioner shows any reason for the court to believe that it is necessary to issue a search order because there is a possibility of moving the detainee elsewhere with the intention of evading the court's order, or
(c) If the court feels that it is necessary or appropriate to issue a search order for any other similar reason.

(2) While issuing a search warrant under sub-section (1), the court may, in the name of any officer or employee under its jurisdiction or in the service of the Government of Nepal, issue an order to search the place or places where the detainee is said to be detained or where such suspicion exists, locate the detainee and produce him/her. While issuing such order, if the court deems necessary or appropriate, it may form a search team consisting of such employee, a person representing the petitioner, and office-holders of the local body, and authorize such team to conduct the search.

(3) The person or team receiving the search order under sub-section (2) shall search for the detained person according to the direction of the court, and if the detained person is found, produce the detainee before the court immediately along with a report.

(4) If there is any reason for the court to believe that the officer or employee receiving the order to search under sub-section (2) cannot identify the detainee, the court may order any other person specified in the warrant to assist in the execution of such search warrant.

(5) If deemed necessary in relation to a habeas corpus petition, the court may itself or through any other subordinate court examine evidence to ascertain the truth regarding the detention. 28. Work to be Done by Judge Himself/Herself: (1) The judge shall himself/herself record statements or depositions in a case or render a judgment or order.
Administration of Justice Act, 2016

28. Work to be Done by Judge Himself/Herself: (1) The judge shall himself/herself record statements or depositions in a case or render a judgment or order. Provided that the judge shall not be prevented from having the judgment or order typed or written, and from having statements or depositions recorded by any employee of the court by questioning himself/herself.

(2) Notwithstanding anything contained in sub-section (1), in the absence of the District Judge, the Registrar of the District Court may record statements or depositions and order the accused to be kept in custody, on bail, or on bond for trial.

(3) After the District Judge attends the court, he/she shall consider the order made under sub-section (2), and if such order is not found to be according to law, he/she shall cause it to be done according to law. Added by Some Nepal Acts Amendment Act, 2075.28A. Priority Order for Hearing Cases: (1) While conducting proceedings, hearing and deciding cases, the court shall do so according to the following priority order:-
(a) Cases where a party is a person in detention during investigation,
(b) Cases where a party is a person in custody for trial,
(c) Cases of a party who is in imprisonment,
(d) Cases where a party is a person with disability or a child,
(e) Cases where a party is a person with physical disability or a person over the age of seventy-five years,
(f) Cases relating to violence against women,
(g) Cases relating to caste discrimination and untouchability,
(h) Cases relating to name adoption or determination of relationship,
(i) Cases relating to maintenance,
(j) Cases relating to divorce,
(k) Cases registered earlier in the order of registration.

(2) Notwithstanding anything contained in sub-section (1), if there is more than one case of the same nature in the same order, the case registered earlier shall be proceeded with, heard and decided. Added by Ordinance Amending Certain Acts Relating to Criminal Offences and Criminal Procedure, 2077.Provided that, in cases involving murder, disfigurement or physical injury using acid, priority shall be given first regardless of when they were registered.

(3) If, in any case, in addition to the persons referred to in clauses (a), (b) or (c) of sub-section (1), other persons are also parties, the proceedings, hearing and decision of such case shall also apply to such persons.

(4) Notwithstanding anything contained in sub-sections (1) and (2), the court may, considering the seriousness and reasonableness of the case, give priority to any case and proceed with, hear and decide it. 29.
Administration of Justice Act, 2016

29. District Courts and District Judges Deemed Established and Posted: (1) District Courts existing at the time of commencement of this Act shall be deemed to have been established under this Act.

(2) District Judges working in District Courts existing at the time of commencement of this Act shall be deemed to have been automatically posted in their respective District Courts. 30. Courts of Appeal to be Dissolved: Courts of Appeal existing at the time of commencement of this Act shall automatically dissolve after the commencement of this Act. 31. Transfer of Cases: (1) Cases, appeals, petitions and reports filed and pending to be decided in District Courts existing at the time of commencement of this Act shall automatically transfer to the concerned District Court established after the commencement of this Act.

(2) If, at the time of commencement of this Act, the area of any district has been divided into two states pursuant to the Constitution, until the boundary of such district is finalized, cases within such district that are to be originally conducted and adjudicated by a District Court or appeals to be heard under this Act or the prevailing law shall be heard by the District Court designated by the Government of Nepal, in consultation with the Judicial Council, by a notification published in the Nepal Gazette. Appeals against the decision of such District Court shall lie to the High Court, or appeals against a decision made by any body or officer under the prevailing law shall lie to the High Court.

(3) Notwithstanding anything contained in sub-section (1), if the boundary of any district is altered and merged into another district pursuant to the Constitution, cases, petitions and reports pending in the District Court of such district shall transfer to the District Court designated by the Government of Nepal, in consultation with the Judicial Council, by a notification published in the Nepal Gazette.

(4) Cases, petitions and reports filed and pending to be decided in Courts of Appeal at the time of commencement of this Act shall, after the commencement of this Act, transfer to the High Court designated by the Government of Nepal, in consultation with the Judicial Council, by a notification published in the Nepal Gazette.

(5) If, after the commencement of this Act, the boundary of any Province is altered and merged into another Province, or the jurisdiction of any High Court or District Court is changed, cases, petitions and reports pending in such High Court or District Court shall transfer to the High Court or District Court designated by the Government of Nepal, in consultation with the Judicial Council, by a notification published in the Nepal Gazette.
Administration of Justice Act, 2016

Added by Some Nepal Acts Amendment Act, 2082.(6) The Government of Nepal may, by a notification published in the Nepal Gazette, form the following Appeal Committee to conduct proceedings, hear and decide appeals pending and transferred to the High Court pursuant to sub-section (9) of section 26 of the then-existing Act Relating to Reconstruction of Earthquake Affected Structures, 2072:-

(a) Judge designated by the Government of Nepal from among the Judges of the High Court on the advice of the Judicial Council - Chairperson
(b) Two members appointed by the Government of Nepal from among persons who have completed at least a master's degree from a recognized university in the field of infrastructure, engineering, law, economics, management, economic or public development, archaeology, public procurement or social development and have at least fifteen years of work experience in the related field - Member

Added by Some Nepal Acts Amendment Act, 2082.(7) After the formation of the Committee pursuant to sub-section (6), the concerned High Court shall, within one month, send the appeals under sub-section (9) of section 26 of the then-existing Act Relating to Reconstruction of Earthquake Affected Structures, 2072 and the related case files to such Committee. Added by Some Nepal Acts Amendment Act, 2082.(8) The procedure of the Committee formed pursuant to sub-section (6) shall be as specified in the same notification. 32. Appeals Lie: If, at the time of commencement of this Act, an appeal could be filed in a Court of Appeal under the then-prevailing law against a judgment, decision or final order made by a judicial, quasi-judicial body or officer, after the commencement of this Act, such appeal may be filed in the concerned High Court. 33. Application or Appeal against Decision of Court of Appeal: (1) If, at the time of commencement of this Act, an appeal could be filed in the Supreme Court under the then-prevailing law against a judgment or final order made by a Court of Appeal, after the commencement of this Act, such appeal may be filed in the Supreme Court.

(2) If, at the time of commencement of this Act, a petition could be filed in the Supreme Court for retrial of a case under the then-prevailing law against a judgment or final order made by a Court of Appeal, after the commencement of this Act, such petition may be filed in the Supreme Court. 34. Case Files, Documents or Details to be Sent: (1) If any court, judicial, quasi-judicial body or officer orders any office to submit or send any case files, documents or details as evidence in a case, or seeks clarification or answer on any matter, such office shall
Securities Act, 2007

Provided that said word shall not mean a private limited company or a cooperative organization.

(v) "Public issuance" means an offer made by an organized institution to the general public by publishing a prospectus to sell its securities.

(w) "Collective investment scheme" means an investment fund, unit fund, or other similar participatory fund management programs as prescribed by the Board from time to time, operated by a scheme manager under this Act, where savings and investment amounts mobilized with the participation of various persons or institutions are taken under its responsibility and the returns obtained through expert investment services thereof are distributed proportionately to the participants of the concerned program.

(x) "Listing" means the listing of securities on a securities market for the purpose of purchasing, selling, or exchanging securities through that securities market.

(y) "Rights issuance" means an offer made by an organized institution in such a way that existing shareholders or any person nominated by them can purchase the securities issued by it. Chapter-2
Provisions relating to the Board

3. Establishment of the Board: (1) For the development of the capital market, to protect the interests of investors investing in securities, to regulate the issuance, purchase, sale, distribution, and exchange of securities, and to regularize and systematize the work and activities of persons involved in the securities market and securities business, a Board called the Nepal Securities Board is established.

(2) The Board established pursuant to sub-section (1) shall consist of the following members:-
 (a) A person appointed by the Government of Nepal — Chairperson
 (b) Joint Secretary, Ministry of Finance — Member
 (c) Joint Secretary, Amended by Some Nepal Acts Amendment Act, 2072.
Securities Act, 2007

Ministry of Law, Justice and Parliamentary Affairs — Member
 (d) Representative, Nepal Rastra Bank — Member
 (e) Representative, Institute of Chartered Accountants of Nepal — Member
 (f) Representative, Federation of Nepalese Chambers of Commerce and Industry — Member
 (g) One person nominated by the Government of Nepal from among experts who have obtained at least a Master's degree from a recognized university in economics, management, finance, commerce, or law and have at least seven years of experience in the securities market, management, capital market development, financial or economic sector — Member

(3) When the concerned institution nominates a representative pursuant to clauses (e) and (f) of sub-section (2), it shall nominate a person who has obtained at least a Bachelor's degree and has worked for at least seven years in the fields of accountancy, industry, commerce, finance, banking, economics, or law.

(4) The term of office of the member nominated pursuant to clause (g) of sub-section (2) shall be three years.

(5) No act or proceeding of the Board shall be invalid merely by reason of a vacancy in the office of any member.

(6) An authorized officer of the Board, as designated by the Board, shall act as the Secretary of the Board.

(7) The Board may, if it deems necessary, invite any domestic or foreign expert or advisor to participate as an observer in a meeting of the Board.

(8) The central office of the Board shall be located in the Kathmandu Valley, and the Board may open branch offices or liaison offices within or outside Nepal as required. 4. Board to be an Autonomous and Corporate Body: (1) The Board is an autonomous and corporate body with perpetual succession.

(2) The Board shall have its own separate seal for all its acts and proceedings.

(3) The Board may, like an individual, acquire, hold, purchase, sell, or otherwise dispose of movable and immovable property.

(4) The Board may, like an individual, sue or be sued in its own name. 5.
Securities Act, 2007

6. Board Meetings and Decisions: (1) The Chairperson shall call meetings of the Board as required. Such meetings shall be held at least once a month.

(2) A meeting of the Board shall be held on the date, time, and place fixed by the Chairperson.

(3) The Chairperson shall preside over the meetings of the Board, and in the absence of the Chairperson, a member chosen by the members from among themselves shall preside over the meeting.

(4) If at least two members make a written request for calling a meeting of the Board, the Chairperson shall call the meeting within seven days from the date of receipt of such request.

(5) The Secretary of the Board shall provide the members with the notice of the Board meeting along with the agenda of items to be discussed in the meeting.

(6) If more than fifty percent of the total number of members are present, the meeting of the Board shall be deemed to have constituted a quorum.

(7) The opinion of the majority shall prevail in Board meetings, and in case of a tie, the person presiding over the meeting shall have a casting vote.

(8) The names of the members present, the subjects discussed, and the decisions made at each meeting of the Board shall be recorded in a separate decision book, which shall be signed by the members present.

(9) Decisions made by the Board shall be certified by the Secretary of the Board and made available to all members.

(10) Other procedures relating to meetings of the Board shall be as determined by the Board itself. 7. Appointment of Chairperson: (1) The Government of Nepal shall, subject to sub-section (2), appoint a Chairperson to act as the administrative chief of the Board and to conduct its day-to-day business.

(2) When appointing the Chairperson under sub-section (1), the Government of Nepal shall appoint a suitable person from among reputed persons who have obtained at least a Master's degree and have worked for at least seven years in the field of securities market management, capital market development, economics, finance, commerce, management, or law.

(3) For the purpose of recommending names for the appointment of the Chairperson under sub-section (2), there shall be a committee consisting of the member of the National Planning Commission looking after the relevant sector as coordinator, the Secretary of the Ministry of Finance, and an expert related to the securities sector.
Securities Act, 2007

The appointment of the Chairperson under this section shall be made on the recommendation of such committee.

(4) When recommending names, the committee under sub-section (3) shall recommend the names of at least three persons who meet the qualifications under this Act.

(5) The committee under sub-sections (3) and (4) shall determine its own procedure for recommending the name of the Chairperson.

(6) The term of office of the Chairperson shall be four years, and such person may be reappointed for a maximum of one additional term of four years.

(7) Notwithstanding anything contained elsewhere in this section, if the Chairperson acts in a manner causing loss or damage to the Board or contrary to the interests of the Board or the development of the capital market, the Government of Nepal may, by forming an inquiry committee as prescribed, remove him from the office of Chairperson on the recommendation of such committee. Provided that, before such removal, the Chairperson shall be given a reasonable opportunity to submit a defense in his favor. 8. Functions, Duties, and Powers of the Chairperson: (1) The functions, duties, and powers of the Chairperson shall be as follows:-
 (a) to carry out necessary functions to develop the capital market and protect the interests of investors investing in securities,
 (b) to regulate and monitor, or cause to be regulated and monitored, the transactions of the securities market and securities traders to make securities transactions sound, effective, and reliable,
 (c) to work as the executive chief of the Board,
 (d) to submit to the Board, for approval, long-term and short-term plans and policies to be adopted by the Board for securities market management and capital market development,
 (e) to call or cause to be called meetings of the Board and to preside over them,
 (f) to prepare the annual program and budget of the Board and submit them to the Board for approval,
 (g) to implement or cause to be implemented the decisions made by the Board,
 (h) to inspect and supervise the daily work of the Board and to work in accordance with the objectives of the Board,
 (i) to appoint advisors and employees required by the Board as prescribed,
 (j) to perform or cause to be performed other duties assigned by the Board.

(2) Other functions, duties, and powers of the Chairperson, in addition to those mentioned in sub-section (1), shall be as prescribed. 9.
Securities Act, 2007

9. Remuneration, Meeting Allowance, and Other Facilities of the Chairperson and Members: The remuneration, meeting allowance, and other facilities to be received by the Chairperson and members, and the daily and travel allowances to be received by the Chairperson and members while traveling within or outside Nepal on the business of the Board, shall be as prescribed. 10. Qualification of the Chairperson and Members: To be appointed as Chairperson or member, a person must possess the following qualifications:-
 (a) be a citizen of Nepal,
 (b) be of high moral character,
 (c) have obtained at least seven years of professional experience in the field of securities market management, capital market development, economics, finance, commerce, management, or law, and
 (d) not be disqualified under Section 11. 11. Disqualification of the Chairperson and Members: The following persons shall not be qualified to be appointed as Chairperson or member:-
 (a) an office bearer of a political party,
 (b) a person involved in the securities business,
 (c) a person who has been adjudged insolvent for inability to pay debts,
 (d) a person of unsound mind,
 (e) a person who has been punished by a court for a criminal offense involving moral turpitude. 12. Circumstances for Vacation of Office by the Chairperson and Members: (1) The Government of Nepal shall remove the Chairperson or a member if circumstances for vacation of office under sub-section (2) arise. Provided that, before such removal, the Government of Nepal shall not deprive the concerned person of a reasonable opportunity to submit a defense.

(2) The Chairperson or a member shall vacate office in any of the following circumstances:-
 (a) if he becomes disqualified to be the Chairperson or member under Section 11,
 (b) if he acts contrary to the interests of securities investors or to the detriment of capital market development,
 (c) if there is a lack of competence to implement or cause to be implemented the tasks to be performed by the Board to achieve its objectives under this Act or the rules made under this Act,
 (d) if, due to bad conduct, his certificate has been revoked or he has been prohibited from practicing any profession or business,
 (e) if he remains absent from Board meetings for more than three consecutive times without notice. 13. Resignation by the Chairperson and Members: The Chairperson or a member may resign from his office by submitting written resignation to the Government of Nepal. 14. Filling of Vacancy: If the office of the Chairperson or a member falls vacant before the expiry of the term, the Government of Nepal shall, after completing the process under this Act, appoint a person to that office for the remaining period. 15.
Securities Act, 2007

14. Filling of Vacancy: If the office of the Chairperson or a member falls vacant before the expiry of the term, the Government of Nepal shall, after completing the process under this Act, appoint a person to that office for the remaining period. 15. Acts not to be Invalidated: No act or proceeding of the Board shall be invalid merely by reason of any irregularity in the appointment of the Chairperson or member or in the formation of the Board, or by reason of a vacancy in the office of the Chairperson or member. 16. Power to Form Committees or Sub-Committees: (1) The Board may form committees or sub-committees as required for carrying out its functions. The member designated by the Board shall be the coordinator of the committee or sub-committee so formed.

(2) The functions, duties, powers, scope of work, meeting allowance, and procedures of the committees or sub-committees formed under sub-section (1) shall be as determined by the Board. 17. Delegation of Powers: (1) The Board may, as required, delegate some of its powers to the Chairperson, any member, or a committee or sub-committee formed under Section 16.

(2) The Chairperson may, as required, delegate some of his powers to any member, a committee or sub-committee formed under Section 16, or any employee of the Board. 18. Duty to Disclose Private Interest: If a proposal in which a member has a direct or indirect private interest is to be discussed at a Board meeting, such member shall inform the Board thereof before the commencement of such discussion. Except with the permission of the Board, such member shall not participate in the discussion and decision on that proposal or express his opinion. Provided that, for the purpose of making up the quorum, the presence of such member shall be valid. 19. Provision Relating to Accounts Officer, Advisors, and Employees: (1) There shall be the required number of accounts officers, advisors, and employees in the Board for the effective functioning of the Board.

(2) The appointment, remuneration, facilities, and terms of service of the accounts officers, advisors, and employees in the Board shall be as prescribed. 20. Oath to be Taken: The Chairperson, members, advisors, and employees appointed for the first time in the Board shall, before commencing their official duties, take an oath of confidentiality and honesty as prescribed. 21.
Securities Act, 2007

20. Oath to be Taken: The Chairperson, members, advisors, and employees appointed for the first time in the Board shall, before commencing their official duties, take an oath of confidentiality and honesty as prescribed. 21. Confidentiality: (1) The Chairperson, members, advisors, employees, auditors, agents, or representatives of the Board shall not do the following:-
 (a) disclose or reveal to others any confidential information or knowledge obtained in the course of performing official duties,
 (b) use such information or knowledge for personal benefit.

(2) Notwithstanding anything contained in sub-section (1), confidential information or knowledge obtained may be brought to light in the following circumstances in accordance with the procedure prescribed by the Board:-
 (a) when performing duties publicly, assisting law enforcement agencies, or when such information or knowledge is brought to light due to a court order or an order given by an authorized officer,
 (b) when such information or knowledge is provided to the external auditor of the Board in the course of performing duties,
 (c) when such information or knowledge is brought to light in the interest of the Board in the course of legal proceedings. 22. Fund of the Board: (1) The Board shall have its own separate fund.

(2) The fund under sub-section (1) shall consist of the following amounts:-
 (a) grants and other amounts received from the Government of Nepal,
 (b) grants, assistance, or loans received from domestic, foreign, or international associations, institutions, or bodies,

 Provided that, while taking such grants, assistance, or loans, prior approval of the Government of Nepal shall be obtained.
 (c) amounts received as license fees,
 (d) amounts received as securities registration fees,
 (e) fees, charges, and levies received for conducting or causing securities transactions,
 (f) amounts received as fines imposed by the Board,
 (g) amounts received from any other sources.

(3) All amounts received by the Board under sub-section (1) shall be deposited by opening an account in any commercial bank located in Nepal.

(4) All expenses incurred on behalf of the Board shall be borne from the amounts deposited in the fund under sub-section (1).

(5) When incurring expenses under sub-section (4), expenses shall be incurred on the basis of the budget approved by the Board for income and expenditure for each fiscal year.

(6) The operation of the Board's fund shall be as prescribed. 23.
Securities Act, 2007

23. Provision of Endowment Fund: (1) The Board may establish an endowment fund to manage its income sources, and such amount as determined by the Board shall be deposited in that fund each year.

(2) The amount in the endowment fund may be kept in securities issued by the Government of Nepal or by opening a term account as prescribed by the Board.

(3) Generally, except for the income generated from the endowment fund, the amount in that fund shall not be expended.

(4) Provisions relating to the operation of the endowment fund shall be as prescribed. 24. Accounts of the Board: (1) The Board shall keep the records of its activities updated.

(2) The Board shall, within a maximum of six months after the end of the fiscal year, prepare and keep the income and expenditure account, balance sheet, and accounting details of that fiscal year according to an accounting system conforming to international practices. 25. Auditor and Audit: (1) The audit of the accounts and records of the Board shall be conducted by the Auditor General or by an auditor designated by him.

(2) When auditing the accounts and records of the Board, the auditor appointed under sub-section (1) shall, among other things, mention the following in his audit report:-
 (a) whether the income and expenditure statement shows a true and fair view of the Board's income and expenditure for that fiscal year,
 (b) whether the balance sheet of that fiscal year gives a true and fair view of the Board's financial position. 26. Annual Report: (1) The Chairperson shall present the annual report on the activities of the Board to the Board within four months from the date of the end of each fiscal year, and a copy of such report shall also be made available to the Government of Nepal.

(2) The Chairperson shall publish the annual report of the Board as mentioned in sub-section (1) publicly each year. Chapter-3

Registration and Issuance of Securities

27.
Securities Act, 2007

Chapter-3

Registration and Issuance of Securities

27. Registration of Securities: (1) An organized institution shall register with the Board any securities to be issued by it prior to such issuance.

(2) For the purpose of registering securities under sub-section (1), an organized institution shall submit an application to the Board in the prescribed format, along with its memorandum and articles of association, documents related to the securities, and the prescribed fee.

(3) Upon receipt of an application under sub-section (2), the Board shall, after making necessary inquiry, if deemed appropriate, register such securities with details in the registration book as prescribed and issue a certificate of registration of securities to the concerned organized institution in the prescribed format.

(4) Notwithstanding anything contained elsewhere in this section, an organized institution that has already issued securities prior to the commencement of this Act shall register such securities with the Board under this Act within one year from the date of commencement of this Act. 28. Sale and Transfer of Securities: (1) If an organized institution allocates or sells securities after their registration, it shall give notice to the Board within seven days, along with details of the securities so allocated or sold.

(2) After receipt of notice under sub-section (1), if it appears necessary to make the allocation and sale of such securities clean and informative for the benefit of investors and the organized institution, the Board may give necessary directives to the concerned organized institution. It shall be the duty of the concerned organized institution to comply with such directives. 29. Public Issuance of Securities Required: (1) If an organized institution is to sell or distribute securities to more than fifty persons at one time, it shall make a public issuance for such sale or distribution of securities.

(2) The period during which applications for securities issued under sub-section (1) remain open shall be as prescribed.

(3) Provisions relating to the price and allocation of publicly issued securities shall be as prescribed.

(4) If securities already publicly issued once need to be re-issued within one year due to non-sale, the organized institution issuing such securities may, with the approval of the Board, issue the securities by placing the previously published prospectus together with details of changes from the matters mentioned therein. 30. Prospectus to be Published: (1) For making a public issuance of securities under this Act after the commencement of this Act, an organized institution shall have the prospectus approved by the Board and publish such prospectus for the information of all concerned.
Securities Act, 2007

30. Prospectus to be Published: (1) For making a public issuance of securities under this Act after the commencement of this Act, an organized institution shall have the prospectus approved by the Board and publish such prospectus for the information of all concerned. When publishing the prospectus, places where the general public can obtain or view the prospectus shall also be specified in the prospectus.

(2) Notwithstanding anything contained in sub-section (1), it shall not be necessary to issue a prospectus when issuing the following securities:-
 (a) securities issued by Nepal Rastra Bank,
 (b) securities issued with the full guarantee of the Government of Nepal,
 (c) securities offered for sale to a maximum of fifty persons at one time,
 (d) securities issued to its workers or employees,
 (e) securities approved by the Board for issuance and sale without issuing a prospectus. 31. Approval of Prospectus: The Board shall only approve a prospectus that contains information sufficient for investors to evaluate the assets and liabilities, financial condition, profit and loss, and expected future matters of the issuer. 32. Matters to be Mentioned in the Prospectus: General matters to be mentioned in the prospectus, the capital and other information of the issuer, main businesses of the issuer, information relating to legal proceedings, the financial condition of the issuer, general administration, management, information relating to the expert preparing the prospectus and the financial statements included in the prospectus, and other matters shall be as prescribed. 33. Responsibility for Matters Stated in the Prospectus: (1) The concerned organized institution and the directors signing the prospectus and the expert preparing such prospectus shall be held individually or jointly responsible for the truthfulness of the details and information mentioned in the prospectus submitted to the Board for the purpose of registering securities and obtaining issuance approval.

(2) If, after a person purchases securities relying on the matters stated in the prospectus, the investor suffers any loss or damage due to the matters stated in the prospectus being made with bad faith or knowingly false or incorrect, the institution, directors, or expert preparing the prospectus under sub-section (1) shall compensate for such loss or damage. Provided that a director who resigns prior to the decision made with bad faith or knowingly, or who proves that he was unaware of the falsity of the prospectus, shall not be required to bear such compensation.

(3) If an investor suffers loss or damage due to a prospectus, notice, information, or details submitted by an organized institution to the Board being false, the investor may file a complaint in the concerned district court within thirty-five days from the date of knowledge within one year of the investment, claiming compensation. 34.
Securities Act, 2007

34. Organized Institution to Give Information: (1) An organized institution issuing securities shall provide information to the Board and shareholders as soon as possible regarding the following matters:-
 (a) matters necessary and helpful for evaluating its financial position,
 (b) information affecting the trading of securities on the securities market or the price of securities.

(2) In addition to the matters mentioned in sub-section (1), an organized institution issuing securities shall also provide notices and information as prescribed to the Board and shareholders. 35. Compensation if Listing is Cancelled: If an organized institution issuing securities has listed securities with a securities market by agreement, and if the securities market cancels the listing of such securities due to failure by such organized institution to comply with matters required to be complied with under this Act or the rules or regulations made under this Act, and if shareholders suffer any loss or damage due to such cancellation of listing, the directors of that organized institution shall, individually or jointly, pay compensation to such shareholders. Chapter-4

Provisions Relating to Securities Market

36. License Required to Operate Securities Market: (1) A person wishing to operate a securities market shall obtain a license to operate a securities market from the Board under this Act.

(2) No person shall, without obtaining a license from the Board under this Act, operate a securities market or cause or perform the purchase, sale, or exchange of securities, and no person shall even use the name of a securities market without obtaining such license.

(3) Notwithstanding anything contained in sub-section (2), the Nepal Stock Exchange existing at the time of commencement of this Act shall, within one year from the date of commencement of this Act, submit an application to the Board to obtain a license to operate a securities exchange under this Act. Until the expiry of that period, the Nepal Stock Exchange shall not be deemed to have encountered any obstacle in operating a securities exchange under this Act.

(4) If the Nepal Stock Exchange does not submit an application to the Board for a license to operate a securities market within the period under sub-section (3), the Nepal Stock Exchange shall not be entitled to operate a securities market after the expiry of such period.

(5) Notwithstanding anything contained elsewhere in this section, after the commencement of this Act, if a securities market is to be established as a limited liability company under the prevailing law relating to companies, the Office of the Company Registrar shall do so only on the recommendation of the Board. 37.
Securities Act, 2007

37. Application for License to Operate Securities Market: (1) Only an organized institution may submit an application to the Board for a license to operate a securities market.

(2) An organized institution shall submit an application under sub-section (1) to the Board in the prescribed format, attaching prescribed details and documents and the fee. 38. Grant of License to Operate Securities Market: (1) Upon receipt of an application under Section 37, the Board may, after making necessary inquiry, if satisfied with the following matters, grant a license to operate a securities market to the applicant organized institution in the prescribed format:-
 (a) if it appears that granting the license to operate a securities market would be in the interest of investors and the general public, or that granting such license is necessary for the proper operation of the securities market,
 (b) if the applicant organized institution has fulfilled the matters mentioned in sub-section (2).

(2) An organized institution submitting an application to the Board for a license to operate a securities market under sub-section (1) shall mention the following matters in the application:-
 (a) that the organized institution is established with the objective of establishing and operating a securities market under the legal provision or memorandum establishing the organized institution,
 (b) that the organized institution shall maintain a paid-up capital as prescribed by the Board, not falling below five crore rupees, as long as it operates the securities market,
 (c) that there are sufficient bases for the organized institution, to the satisfaction of the Board, to provide the necessary arrangements, infrastructure, and facilities required to operate the securities market,
 (d) matters relating to listing or similar other arrangements to recognize securities to be traded through it,
 (e) that, from the regulations proposed by the organized institution for operating the securities market and the arrangements and methods to be adopted for transaction operations, securities transactions will be conducted regularly and the interests of investors will be protected,
 (f) that suitable arrangements have been made for the clearing and settlement of transactions conducted on the securities market and for publishing records thereof and details of transactions,
 (g) that it is capable of properly inquiring into complaints received regarding transactions made by its members,
 (h) that if its members fail to fulfill their obligations as per contract, action shall be taken as mentioned in the regulations in that regard. 39. Board may Impose Conditions: (1) While granting a license to operate a securities market, the Board may impose necessary conditions, taking into account the condition of the capital market, the healthy operation of the securities market, and the interests of investors.
Securities Act, 2007

39. Board may Impose Conditions: (1) While granting a license to operate a securities market, the Board may impose necessary conditions, taking into account the condition of the capital market, the healthy operation of the securities market, and the interests of investors. It shall be the duty of the concerned securities market to comply with such conditions.

(2) The Board may, as required, add, subtract, or alter the conditions imposed under sub-section (1), taking into account the condition of the capital market, the healthy operation of the securities market, and the interests of investors. 40. Refusal to Grant License to Operate Securities Market: (1) Notwithstanding anything contained in Section 38, the Board may refuse to grant a license to operate a securities market to an organized institution in the following circumstances:-
 (a) if it is not necessary to operate a securities market based on the development of industry and business and the potential for existing securities transactions,
 (b) if it does not seem appropriate or suitable to allow the operation of a securities market for the protection of the interests of investors.

(2) If an organized institution is not to be granted a license to operate a securities market in the circumstances mentioned in sub-section (1), the Board shall notify the concerned organized institution stating the reasons therefor. 41. Minimum Capital and Financial Resources: The paid-up capital of an organized institution operating a securities market shall be as prescribed by the Board from time to time, not falling below five crore rupees, and such institution shall maintain sufficient financial resources for the market arrangements it operates. 42. Duration and Renewal of License to Operate Securities Market: (1) A license granted to operate a securities market shall remain valid only until the end of the fiscal year in which it is issued.

(2) An organized institution operating a securities market shall, within three months after the end of each fiscal year, pay the prescribed annual fee to the Board and renew the license to operate the securities market.

(3) If the license cannot be renewed by paying the annual fee within the period under sub-section (2), the license may be renewed by paying a penalty of twenty-five percent of the annual fee within three months after the expiry of that period.

(4) If an organized institution does not renew such license even within the period under sub-section (3), the license to operate the securities market obtained by it shall be cancelled. 43.