8th March 2025, Kathmandu
The Securities Board of Nepal (SEBON) has announced an important update that impacts investment companies. Following a directive from the Government of Nepal, investment companies with a paid-up capital of NPR 5 crore or more or a transaction value of NPR 10 crore or more must now register with SEBON.
SEBON Nepal Regulation 2081
Key Regulation Details
Under this new rule, investment companies that meet the specified financial thresholds will be required to register with SEBON. Companies with NPR 5 crore or more in paid-up capital or an annual transaction value exceeding NPR 10 crore must comply with this regulation.
Compliance with Money Laundering Prevention Act
In addition to registration, these companies must adhere to the Prevention of Money Laundering Regulations, 2081 (PMLR). This regulation is designed to prevent illegal financial activities and money laundering, promoting transparency in Nepal’s financial system.
Anti-Money Laundering and Know-Your-Customer Rules
Investment companies must implement anti-money laundering (AML) practices and know-your-customer (KYC) procedures. These measures will help prevent suspicious financial activities and ensure that companies report such activities to the authorities.
SEBON’s Increased Oversight
SEBON will now oversee the operations of these companies, ensuring they comply with financial and legal requirements. Regular audits and transaction reviews will be conducted to maintain transparency and accountability in the sector.
Implications for the Investment Industry
This new regulation is expected to enhance the credibility of Nepal’s investment industry. It aims to reduce financial crimes and strengthen investor confidence. While some companies may face challenges with the new compliance requirements, others see it as a step toward improved professionalism in the sector.
Global Standards and Economic Growth
By implementing these regulations, Nepal is aligning its financial market with global standards. This move is expected to attract more foreign investment, boosting the country’s economic growth and market stability.
Reactions from the Financial Sector
Reactions from the financial sector are mixed. Some industry insiders express concerns about the extra regulatory burden, while others believe the change will bring long-term benefits. The regulation is seen as an important step toward creating a more secure and trustworthy investment environment in Nepal.
Moving Forward
The new regulation will be enforced in the coming months, and SEBON will issue further guidelines for companies to ensure compliance. Investment companies are encouraged to prepare for registration and to familiarize themselves with the new requirements.
This update signals a significant shift in how investment companies will operate in Nepal. The Government of Nepal and SEBON continue to emphasize the importance of these changes to improve the security and transparency of the nation’s financial markets.
For more: SEBON Nepal Regulation 2081