Commodities market: Sebon seeks more time to prepare regulations

KATHMANDU, SEP 26 -

The Securities Board of Nepal (Sebon) has asked for more time to prepare regulations for the commodities market. The High Level Financial Sector Reforms Coordination Committee headed by the finance minister had directed it to have a draft ready by September 19.

Sebon Chairman Baburam Shrestha said that it would take around one month to write a first draft. “Although our team of experts have been working on the text on a war footing, it will take a month to finalise it,” he added.

The government’s failure to regulate the newly formed commodities markets had resulted in large scale deception. A study conducted by Sebon has revealed that 80 percent of the investors in the markets had lost money. The survey also found that the markets had been conducting transactions in foreign exchange without the central bank’s approval as per the Foreign Exchange Regulation Act.

The Finance Ministry said that it had asked Sebon to complete a draft as soon as possible. “We expect that a draft will be prepared within a week,” said a ministry official. A scheduled meeting of the high level committee didn’t take place on Sept 19, and it is expected to be held soon where the draft regulation will be discussed.

Meanwhile, two commodities markets, Commodities and Metal Exchange (Comen) and Nepal Derivative Exchange (NDEX), have come under attack from trade unions affiliated to the CPN-Maoist as they have been operating without regulations.

Cadres of the All Nepal Revolutionary Trade Union Federation (ANRTUF) linked to the CPN-Maoist vandalized the Comen office on Sunday. They had trashed the office of NDEX a few days ago.

According to ANRTUF coordinator Ramdip Acharya, their move against the commodities exchanges was symbolic, and it was carried out to draw the attention of the stakeholders to regulate the exchanges and address various anomalies that have surfaced recently. “We have been receiving complaints from different people for the last five to seven months that they had been cheated while investing in the exchanges,” said Acharya. “People also complained that since the exchanges are not regulated by government, they have nowhere to go and report their grievances.”  

But the exchanges said there is a process to address the grievances of investors, and that they were willing to do so.

Source: The Kathmandu Post