SEBON forms committee to look into possible illicit flow of capital at Nepse

Kathmandu, July 14

The Securities Board of Nepal (SEBON) — securities market regulator — has formed a committee today to conduct investigations into big investments in the capital market on suspicion of illicit flow of capital as the daily turnover in the stock market has exceeded Rs one billion in the recent days.

The committee formed under the convenership of the executive director of the Supervision and Research Department of SEBON comprises directors of Legal Enforcement Division and Securities Businessperson Supervision Division of SEBON, representatives from Anti-Money Laundering Department of the Ministry of Finance, Central Investigation Bureau of Nepal Police and experts of the related field. The committee has been asked to submit its report within a month.

The securities market regulator has been monitoring big investors of the Nepal Stock Exchange (Nepse) since a few months as the daily turnover in the market has gone up in a substantial manner.

“The committee formed by SEBON can take further information of the big investors of the capital market from the brokerage firms,” said Rewat Bahadur Karki, chairman of SEBON.

It has been reported that the committee will keep an eye on investors whose daily transactions are over Rs five million. After the enforcement of the Anti-Money Laundering Act in the country, the brokerage firms are required to notify the securities market regulator regarding transactions of above Rs one million.

“Now, the committee can ask for further details of the investors from the brokerage firms and investigate them if the committee has suspicions on the investor’s source of income,” said Niraj Giri, executive director of SEBON.

“We are going to conduct investigations to prevent the chances of money laundering through the capital market. Primarily, this is an illegal activity and on the other hand, it will ultimately distort the sound growth of the capital market.”

SEBON further clarified that its move is not aimed at discouraging genuine investors.

“The genuine investors need not worry about the risks emanating from SEBON’s move,” Giri stated.