The Government of Nepal has issued a notification in the Nepal Gazette dated Poush 18, 2081, designating the Securities Board of Nepal (SEBON) as the regulatory authority for investment companies meeting specific criteria. This decision, made by the Office of the Prime Minister and Council of Ministers, is based on the Asset (Money Laundering) Prevention Act, 2064, and aims to enhance oversight and transparency in the financial sector.
Key Highlights of the Notification
- SEBON designated as the regulatory body for investment companies with a paid-up capital of Rs. 5 crores or more or an annual transaction volume of Rs. 10 crores or more.
- Companies must submit 10 key documents for registration, including financial statements, board details, and criminal clearance certificates.
- The decision aligns with the Asset (Money Laundering) Prevention Act, 2064, and aims to enhance financial sector transparency.
Criteria for SEBON Regulation
Investment companies that meet either of the following criteria will now fall under SEBON’s regulatory framework:
- Paid-up Capital: Rs. 5 crores or more.
- Annual Transaction Volume: Rs. 10 crores or more.
Such companies are required to register with SEBON and comply with the stipulated regulations.
Registration Requirements
Investment companies must submit the following documents and details to SEBON for registration:
- Formal Application: A written application for registration with SEBON.
- Board of Directors Details: Names, addresses, contact numbers, and shareholder records.
- Memorandum and Articles of Association: Updated copies of the company’s constitutional documents.
- Criminal Clearance Certificate: A certificate confirming the company’s clean legal record.
- PAN Registration Certificate: A copy of the company’s Permanent Account Number (PAN) registration.
- CEO Details: Name, address, and contact number of the Chief Executive Officer.
- Board Resolution: A certified copy of the Board of Directors’ resolution approving SEBON registration.
- Authorization Letter: A letter from the Board of Directors authorizing the registration process.
- Audited Financial Statements: Reports specifying annual transactions and audit findings.
- Paid-up Capital Confirmation: Documents verifying the company’s paid-up capital.
Compliance and Regulatory Oversight
Investment companies falling under the specified criteria must adhere to the outlined requirements to ensure regulatory compliance with SEBON. This move aims to strengthen oversight, prevent money laundering, and promote transparency in the financial sector.
Conclusion
The Government of Nepal’s decision to bring investment companies under SEBON’s regulatory framework marks a significant step toward strengthening financial oversight and combating money laundering. Companies meeting the specified criteria must ensure timely compliance with the new requirements to avoid penalties and contribute to a more transparent financial ecosystem.