Merchant bankers miss disclosure deadline

Securities Board of Nepal (Sebon) has assked merchant bankers to submit their annual financial details as they missed the disclosure deadline.
According to the new Merchant Banker Regulation 2008, a merchant bank has to submit its annual financial details within the three months from the end of the fiscal year.
"We have received only one merchant banker's financial details till date," said Dhrub Timilsina, deputy director at the Sebon -- the regulatory authority of the capital market. By the end of the three months -- that was October 17 -- only Elite Capital has submitted its annual financial details. The rest have failed to meet the deadline of disclosure.
There are one-and-a-half dozen merchant bankers in the capital market. They act as issue and sales managers, share registrar, securities underwriter and portfolio manager.
According to the earlier regulation, they were supposed to submit the annual reports within the five months after the end of the fiscal year. "There might be mixed up with the timings," Timilsina added.
"If the reports could not be submitted within the period, the board may, on application of the merchant banker stating valid reason, thereof grant extention of three months," according to the nerw regulation. The Board may impose fine for the failure to submit annual report even in the extended period.
The board has made the disclosure mandatory as the capital market is expanding. The Merchant bankers also have to submit semi-annual report of its merchant banking business to the board within 60 days of the expiry of the semi-annual period.
The board has also asked a broker -- Arun Securities Services -- for an explanation as it failed to submit the annual financial details of the last fiscal year.
According to the Securities Act 2007, the brokers also have to submit their annual financial details within the three months from the end of the fiscal year. Out of 23 brokers, only six have submitted their accounts within the time.
The 15 brokers have submitted the unaudited report while four brokers didnot submitted the report. "But three brokers have asked for time extention," Timilsina said adding that the board could extend the time if they have valid ground.
The board could extend three more months, upon which if the broker will be unable to submit the financial report, it would be fined Rs 5,000 to Rs 25,000, according to the Act.