Rs 46 trillion capital market still governed by old act, demand for immediate new securities act
Investors have questioned the government over the Rs 46 trillion-plus capital market operating under the old Securities Act of 2063 BS. Khagendra Raj Kandel, general secretary of the Nepal Share Market Investors Association, has demanded an immediate new securities act, alleging that the old law has fostered insider trading, market manipulation, policy corruption, and impunity.
Kathmandu — Investors have questioned the government over the Rs 46 trillion-plus capital market operating under the old Securities Act of 2063 BS. Khagendra Raj Kandel, general secretary of the Nepal Share Market Investors Association, has demanded an immediate new securities act, alleging that the old law has fostered insider trading, market manipulation, policy corruption, and impunity.
Kandel remarked that the provision of only a small fine compared to the profits made from illegal transactions is ineffective, likening it to a 'service charge'. He stated that the new act should include provisions for a fine of at least three times the illegal profit, confiscation of illegal income, and compensation for victimized investors.
According to him, although modern practices such as demat, online trading, book building, margin trading, and cyber risk have developed, the legal basis to regulate them remains weak. He also claimed that the rights and responsibilities of SEBON, NEPSE, and CDSC are not clearly defined.
Kandel mentioned that a defamation lawsuit of Rs 400 million was filed against him when he raised his voice about wrongdoings in the market, and said the state must intervene immediately to establish financial good governance in the capital market. The Investors Association has stated that it has submitted a draft of the new securities act along with proposals on expanding the regulator's authority, cyber security, and accountability to the committee.