Stockbrokers and merchant bankers will now have to scrutinise their clients for any instances of money laundering.
Securities Board of Nepal (Sebon) — the capital market regulator — has issued the Anti-Money Laundering and Counter-terrorist Financing Directive 2069 in order to prevent any illegal fund from entering the capital market for laundering purposes.
Nepal Rastra Bank’s Financial Information Unit (FIU) and Department of Money Laundering Investigation requires stockbrokers to inform the authorities regarding any suspicious transaction exceeding Rs one million, under the Anti-Money Laundering Act-2008.
According to the current directive, securities businesspersons have to report any transaction undertaken by a person or a firm exceeding Rs one million in a single day to the FIU.
Sebon has defined securities businesspersons as stockbrokers, portfolio managers, asset managers and merchant bankers managing any share issue.
Securities businesspersons also need to maintain separate documents on clients conducting businesses higher than Rs one million and have to ask the clients regarding the source of the money.
Share brokers and portfolio managers have been asked to maintain customer due diligence so that any suspicious income can be detected.
The directive has asked brokers and asset managers not to be involved with clients who are unable to provide all the information required for customer due diligence or if the information is found to be incorrect.
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