Mandatory disclosure for transactions of Rs 1 million or more in a single day in the stock market
The Nepal Securities Board has implemented the Anti-Money Laundering and Terrorist Financing Prevention Directive, 2083, effective from Ashwin 30. Accordingly, transactions of Rs 1 million or more in a single day in the stock market must be reported to the Financial Information Unit within 15 days. Customer identification has also been tightened.
Kathmandu. The Nepal Securities Board has made it mandatory to report any transaction of Rs 1 million or more conducted by any individual or legal entity in a single day in the stock market.
The Board has implemented the Anti-Money Laundering and Terrorist Financing Prevention Directive, 2083, effective from Ashwin 30. This provision is included in the same directive.
Stock market-related reporting entities must provide the prescribed details of any transaction of Rs 1 million or more conducted by any individual or legal entity in a single day, either in one go or in multiple transactions, to the Financial Information Unit through the prescribed software within 15 days of the transaction date.
Similarly, if a customer conducts a transaction of Rs 1 million or more within the prescribed limit, the reporting entity must prepare separate records related to the transaction amount, ledger, or account operations. The source of funds used in such transactions must also be mentioned and updated.
However, the directive stipulates that details of transactions conducted by government offices and entities need not be sent to the reporting entity unit.
Entities not required to send transaction details:
- Transactions conducted by the Government of Nepal or offices or entities under the Government of Nepal.
- Transactions conducted by entities established under special acts.
- Transactions conducted by organized institutions registered with the Securities Board that are established to buy or sell securities, and by auxiliary institutions licensed by the Securities Board.
Nevertheless, for such exempted transactions, the directive states that it shall be considered exempt to identify suspicious transactions and prepare and send details accordingly to the Financial Information Unit.
Likewise, customer identification in the stock market has been tightened through the directive. The directive requires reporting entities to regularly update basic information and documents, including other details of customers and beneficial owners, based on risk using electronic technology. The directive also requires the development and implementation of an information technology system for this purpose.