KATHMANDU, June 22: Securities Board of Nepal (Sebon) has introduced new guidelines on anti-money laundering that, among others, list out five dozen transactions of companies in the securities and commodities market that should be notified to the Financial Information Unit (FIU) of the Nepal Rastra Bank (NRB) as suspicious transactions.
The new guidelines on prevention of money laundering and terrorist financing released by the Securities Board of Nepal (Sebon) on Friday requires companies licensed by the capital market regulator, who are termed as reporting entities and include stock brokerage firms, merchant bankers and stock and commodity exchange company, to flag any suspicious transaction to the FIU for further investigation.
These transactions range from investment that seems to be made from tax-evaded money to discrepancies in the address of any client and transactions from another person's name.
According to the guidelines, reporting agencies should send suspicious transaction report to the FIU within three days.
The new guidelines are aimed at implementing the Asset (Money) Laundering Prevention Act, 2008 and prevent and discourage the money and asset laundering and financing of terrorist activities through the abuse of the securities and commodity market.
According to the guidelines, any transaction that seems unusual in terms of size, value, nature and source, should be reported.
Reporting entities in the securities and commodities market are also required to categorize their clients under high-risk, risk and general risk for further scrutiny and reporting of their transactions, according to the new directives.
Some of those who fall under high-risk are the clients who carry out transactions without coming at the fore, non-residential clients, high ranking politicians, business persons and officials in social and financial sectors; and transactions carried out with firms, companies and organizations who do not have their regulators.
Based on the information and reports from the reporting entities, the FIU forwards the cases to the respective law enforcement and investigation agencies for further investigation after analyzing and assessing the information.
Apart from the suspicious transaction reports, these reporting agencies are also required to send each transaction report to the FIU above the value of Rs 1 million.
The Sebon has also warned that those reporting agencies who fail to comply with the anti-money laundering laws, regulations and guidelines will have to face stern action. According to the Sebon, those violating the provision risks facing the fine up to Rs 50 million and cancellation of the license.