3 Broker Companies Fined for Violating SEBON Rules; License of CARE Ratings Limited Also At Stake

Three broker companies SANI Securities Company Ltd., Imperial Securities Company Pvt Ltd, and Trishul Securities & Investment Ltd has been fined for violating SEBON rules whereas license of CARE Ratings Limited is also at stake. 

The Securities board (SEBON) has fined SANI Securities Company Ltd., Imperial Securities Company Pvt Ltd, and Trishul Securities & Investment Ltd for not submitting the quarterly financial report within the specified time.

According to the board, Sani Securities has been fined Rs. 10,000, whereas, Imperial Securities and Trishul securities have been imposed a fine of Rs. 75,000 each as per section 101 of the Securities Act 2063 for not submitting the quarterly financial report on time.

CARE Ratings Limited is a licensed credit rating agency. In order to help the company generate cash and enable investors to make an educated investment decision based on credit risk, the company provides credit assessments of businesses.

According to Rating Regulations 2068, rating agencies aren't allowed to assign ratings to those companies in which they own a significant stake and are major shareholders of the respective company. Since CARE ratings violated the Rating Regulations, SEBON has requested clarification from the credit rating agency and asked for a justification for not taking full enforcement action as required by Section 101 of Act 2063.

While Care Rating Nepal has breached the credit rating rule 2068 by rating its primary shareholder, SEBON has also requested an explanation from the three penalized companies as to why it should not suspend the license of Care Rating Limited.