HIMALAYAN NEWS SERVICE
KATHMANDU: Non Resident Nepalis can now officially channel their pooled funds in Nepal through mutual funds. Ministry of Finance formally granted approval to the amendment of the Mutual Fund Regulation 2067 yesterday, bringing new regulations into effect.
The capital market regulator –– Securities Board of Nepal (Sebon) –– had sought an amendment to allow NRN investment firms to hold a certain stake in a mutual fund company as fund managers. Likewise, amendment has also revised provisions regarding the experience of fund managers and supervisors.
“The amendment has allowed NRN investment companies to hold a 49 per cent stake in an asset management company,” informed deputy director at Sebon Muktinath Shrestha.
NRNs have already established an investment company to invest in the Nepali capital market and real estate. Global Capital Investment –– the investment company formed by NRNs to invest in Nepal –– already has a collective fund worth Rs 500 million.
The government had opened capital market investment for NRNs in last fiscal year’s budget. However, due to practical complications regarding the entry and exit of foreign retail capital, the matter had remained in theory only.
According to the earlier regulation, chief executives of the fund manager needed to have a minimum experience of 10 years in the relevant field which has been reduced to seven years. Sebon had received complaints about the number of years of experience required for executives of fund managing companies and had called for an amendment.
Siddhartha Bank has already received the licence to start mutual funds under its newly formed merchant banking arm –– Siddhartha Capital. The commercial bank was granted a licence in August 2011 but is yet to launch its scheme.
Likewise, Nabil Bank’s Nabil Invest also acquired the licence for asset manager, in February. Both these financial institutions are yet to start operations and are waiting for mutual fund guidelines.