FinMin to issue commodity market regulation through ordinance
KATHMANDU, MAY 17 -
The Finance Ministry has planned to issue a regulation to oversee the commodity market through a financial ordinance after its proposal to do it through an existing act was turned down by the Law Ministry.
The Law Ministry had rejected the Finance Ministry’s earlier plan to bring out a regulation based on the Administrative Procedures (Regulation) Act 1956 and the Securities Act saying that these laws did not pertain to the commodity market.
Finance Minister Shankar Prasad Koirala said that the government was considering introducing the regulation through a financial ordinance along with the budget for the next fiscal year. Minister Koirala added that the Law Ministry had approved the content of the proposed regulation, and that the only stumbling block was the manner of its issuance.
Speculative trading in commodities like precious and industrial metals, petroleum products and agricultural goods, among others, has been the major activity at the commodity exchange. The government took steps to regulate the market after reports about the general public being cheated appeared a few months ago.
Meanwhile, Tek Prasad Dhungana, joint secretary at the Law Ministry, said that they would comment on the matter after the Finance Ministry seeks its opinion when asked whether the government could introduce the regulation through a financial ordinance. “There has not been any discussion on the new proposal, and the Finance Ministry has not sent us the documents for us to study,” he said.
The Law Ministry had said that the Administrative Procedures Act only allows the government to frame working procedures to ease service delivery while rejecting the Finance Ministry’s proposal to introduce the regulation through it.
The Law Ministry has also suggested bringing out a separate act saying that the commodity market needed a strong supervisory and licensing body, and that there should be a provision for punishment for unlawful acts. The Law Ministry had also said no to issuing the regulation under clause 116 of the Securities Act stating that it contained no mention of the commodity market.
The clause has given the Securities Board of Nepal (Sebon) the power to frame rules stating that it may, in order to implement the objectives of this act, frame necessary rules with the approval of the government. The clause, however, does not clearly authorise Sebon to frame rules related to the commodity market.
Prompted by reports of gullible investors being deceived in the unregulated market, the government has been working to monitor the sector through a regulation as there is no act and there is no Parliament to pass legislation.
According to a study conducted by Sebon, 80 percent of the investors in the commodity market have lost money.
The Sebon study also found that the commodity market had been conducting transactions in foreign exchange without the central bank’s approval as required by the Foreign Exchange Regulation Act.
Source: The Kathmandu Post
