Beginning Saturday, companies dealing with stocks must inform the Financial Information Unit (FIU) at Nepal Rastra Bank (NRB) about stock transactions that exceed Rs1 million per day. Also, information about suspicious transactions at the secondary market must be provided to the FIU at the NRB.

The provisions were introduced by the Securities Board of Nepal (Sebon), the secondary market regulator, as it gears up to enforce the Directive to Prevent and Control Financial Investment in Money Laundering and Terrorist Activities beginning Saturday.

The directive was endorsed by the Sebon’s board of directors on Wednesday, Sebon’s Deputy Spokesperson Niranjaya Ghimire said. The directive was prepared as per the provision in the Money Laundering Prevention Act.

As per the stock market regulator, companies licensed by Sebon must follow provisions laid in the directive. Sebon issues licence to listed companies, merchant bankers and brokering companies. The directive is expected to tighten noose around those trying to channel ill-gotten wealth to the secondary market and control other malpractices like carrying out fake transactions and holding transactions on behalf of anonymous persons.

The new directive also makes it mandatory for companies licensed by Sebon to introduce internal control measures and train officials on ways to curb money laundering.