Regulations for commodity soon
KATHMANDU, MAR 10:
Regulators are aiming to complete the drafting of regulations to supervise the commodities market before the end of the current fiscal year.
“We will hopefully prepare the final draft of the regulation before the end of this fiscal year and implement it from the beginning of next year,” said chairman of Securities Board of Nepal (Sebon) Baburam Shrestha. Sebon, the capital market regulator, has been designated by the government to regulate the commodities market.
The High Level Financial Coordination Committee held a meeting to discuss the information collected about the commodities market so far by the study committee. The high level committee consisting of Sebon chairman, Nepal Rastra Bank governor, Insurance Board chairman and finance secretary had directed Sebon to conduct a comprehensive study of the commodities market about a month back.
“The information collected at present is not substantial but we will figure out how these exchanges have been operating and what they are trading on, the modes of payment, and the size of their business, among others,” Shrestha pointed out.
According to the data made available by the Company Registrar’s Office, there are 52 companies registered as ‘brokerage and exchange’ firms signalling a mammoth financial trouble in the future if not regulated soon.
At present, there are six commodities exchanges operating but they are not under any regulatory rein, making them a financially ticking time bomb that will engulf many if it explodes. There is no account of the money being handled by these exchanges except for the amount shown as income and expenditure in their balance sheets for tax purposes. “Through the study we will asses the situation and bring in necessary measures to supervise and regulate any grey areas in their mechanisms,” informed Shrestha.
The meeting also discussed improving the capital market which is in bearish run despite other economic indicators showing substantial improvement in recent years.
Source: THT
