Kathmandu, Oct 27: Investors have expressed concern following the Securities Board of Nepal (SEBON)’s issuance of new guidelines on preventing money laundering and terrorist financing. The requirement to report share transactions worth Rs1 million or more in a single day to the Financial Information Unit (FIU) under Nepal Rastra Bank has sparked fears of increased government scrutiny of the stock market.
Under the guidelines, brokerage firms must report transactions worth Rs1 million or more, whether conducted in a single trade or through multiple trades in one day, by an individual or legal entity. Reports must be submitted to the FIU within 15 days under Section 10A of the relevant law. Brokers must also maintain separate records of such investors.
The announcement prompted criticism that the government was tightening its control over the market, with concerns beginning to affect investor sentiment. SEBON, however, says the reporting requirement is not new but a continuation of an existing rule.
SEBON spokesperson Niranjay Ghimire said the provision had been in force for years and would not affect genuine investors. “Although the guidelines have been revised, the requirement to report transactions worth Rs1 million or more in a day is an old provision,” he said.
The board introduced the requirement in its anti-money laundering and terrorist financing directive in 2019. Brokers have been reporting such transactions to the FIU since then.
Bharat Ranabhat, former president of the Stock Brokers Association of Nepal and managing director of Kohinoor Investment and Securities, said brokers had been reporting large transactions for the past seven years. He said the rule applied across banking, financial services and insurance, not just the stock market.
“Rumours have spread as if this rule was introduced to tighten restrictions on investors. We have been following it since the anti-money laundering law came into effect, so there is no reason to panic,” Ranabhat said.
He added that brokers could identify transactions exceeding Rs1 million through their software and submit the details electronically to the FIU.
Investor Dev Guragain also said the market was being unsettled by unnecessary rumours. Since share payments pass through the banking system, he argued, the source of funds can be checked through investors’ bank accounts. He urged investors not to react to misinformation.
Ranabhat said money laundering was less common in the securities market than in other sectors because share transactions take place through the banking system. Banks can block funds of suspicious origin, while brokers report transactions to the FIU when concerns arise.
SEBON has also directed brokers to pay special attention to seven types of transactions, including regular secondary market trades in minors’ names, transactions without a change in beneficial ownership, trades prohibited by securities laws, transfers of securities rights, bulk transactions conducted outside the Nepal Stock Exchange trading system, other legally prohibited transactions and trades identified as risky by brokers themselves.
The guidelines also require brokers to develop systems to identify suspicious transactions and activities.
Nepal was placed on the Financial Action Task Force’s grey list for a second time in February 2026 over weaknesses in its efforts to combat money laundering and terrorist financing.
People’s News Monitoring Service
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