Laxmi Capital News
Sebon slaps record fine against two stock brokers

The Securities Board of Nepal (Sebon) has slappeda record fine on two stock brokerage firms for their failure to maintainknow-your-customer (KYC) compliance. 

This is the first action taken by the capitalmarket regulator based on anti-money laundering law. 

Sebon, on Friday, decided to impose a fine of Rs1 million each on Agrawal Securities Pvt Ltd and Shree Hari Securities Pvt Ltdfor violating the anti-money laundering rules along with an additional Rs50,000 each for breaching the regulation for brokerage firms. 

The penalty to these brokerage firms is linked totwo separate cases of fake trading of securities of Chilime Hydropower CompanyLtd and National Hydropower Company Ltd. 

Stating that the brokerage firms violated theprovisions of the Money Laundering Prevention Act, 2008 and SecuritiesBusinessperson (Stock Broker, Dealer & Market Maker) Regulation thatrequire them to maintain the proper record of their clients, known as know-your-customer(KYC), Sebon slapped a hefty fine on them.

Apart from fine to the brokerage firms, the Sebonhas also asked the executive chiefs of both the firms to pay a fine of Rs50,000 each for the violation of anti-money laundering law and securitiesact. 

The Sebon also decided to write a reprimand toanother brokerage firm, Siprabi Securities Pvt Ltd, for violating the rules onproper identification of its clients. 

The capital market regulator showed leniency tothis brokerage firm after its chief executive cooperated with it to reveal thecase at the beginning, according to officials of the Sebon. 

Sebon Chairman Rewat Bahadur Karki told Republicathat the capital market regulator decided to penalize the brokerage firms andtheir executives as per the recommendation of an investigation team formed bythe board. 

“The action against the brokerage firms for theviolations of securities-related regulation and anti-money laundering act willdiscourage and deter money laundering and other offences,” said Karki. 

Karki had put investigation into the case oftrading of fake securities of Chilime Hydropower Company Ltd and NationalHydropower Company Ltd in top priority

While the executive chief of Sri Hari Securitiescould not be reached for response, the chief executive of Agrawal Securities,Bhuwaneshwor Yadav, said that he was not aware of the action taken against hisfirm. “I have no knowledge of decision taken by Sebon. We will take about theissue later,” Yadav told Republica. 

Inmid-July 2017, the Sebon had filed a separate case against those involved inthe trading of fake securities of Chilime Hydropower, National HydropowerCompany Ltd and Sanima Mai Hydropower at the Kathmandu District Court. 

Source:My Republica, 10th January 2018


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