June 3, Kathmandu- Securities Board of Nepal (SBN) has directed Nepse to make the RAFSAF fund strong and effective.

So far, an insignificant amount has been deposited in the established RAFSAF fund. Investors have not been able to pay their dues on time due to the non-implementation of the fund.
 
Stating that it is necessary to reduce the inherent systemic risk in the secondary market of securities as the transaction amount is increasing day by day, the Board has clarified that it is necessary to make the existing RAFSAF fund workable to keep the market organized and disciplined.
 
Stating that the necessary funds should be deposited immediately to make the fund workable, the board has directed the concerned parties to contribute.

The board has stated that the fund should be contributed by the securities market, the institution providing the securities clearing services and equally all the securities members (securities brokers).

Nepse has been asked to work for the establishment and operation of a total amount of Rs. 1 billion by making 500 million within FY 2077/78, an additional 300 million within FY 2078/79 and an additional 200 million within FY 2079/80.

The securities market will have to deposit 50% of the total amount in the RAFSAF fund, the organization providing RAFSAF services will have to deposit 30% of the overall fund and the RAFSAF members (securities brokers) will have to deposit 20% of the total fund.

In addition to this amount, in order to strengthen the fund based on risk, the stock market (fund manager) will have to add 1% of the average daily trading amount of the stockbrokers in the last month by the 15th of the current month and deposit it in the fund as a dynamic contribution.

When determining the additional amount as mentioned above, if the amount to be reviewed on a monthly basis and thus the additional amount is more than the dynamic contribution of the previous month, the securities broker will have to make an additional contribution only to the RAFSAF fund.

The securities market should act as the steering committee of the fund and the organization providing the RAFSAF service should act as the fund manager in accordance with the international practise regarding the management of the RAFSAF fund.