KATHMANDU, Jan 4: The Securities Board of Nepal (Sebon) has approved Central Depository Service (CDS) Bylaws to pave the way for CDS and Clearing Company to start online-based share trading system at Nepal Stock Exchange (Nepse).
The capital market regulator unveiled the bylaws, which it approved a few days ago, at a press conference in Kathmandu on Wednesday. It has already permitted CDS and Clearing Ltd to operate CDS in the country´s sole capital market.[break]
Unveiling the bylaws, Parista Poudyal, director of Sebon, said once the CDS comes into implementation, Nepal´s semi-automated stock market will go fully automated with fast settlement of share transactions and ownership transfer of share certificates. He also said the CDS would be one giant step toward modernization of the stock market.
The CDS Bylaws envisages building a network among concerned agencies such as CDS Company, depository participants (DP), listed companies and Nepal Stock Exchange (Nepse) to exchange information about the share transactions.
Similarly, it incorporates a mandatory provision that requires listed companies at Nepse to file application at CDS Company to keep record of all their dematerialized shares.
Sebon certification for those who want to work as DP, depositing of shares by investors at CDS and provision of monitoring and inspection of DP by CDS Company are the other provisions incorporated in the bylaws.
Likewise, formation of arbitrary committee to settle disputes and assurance of protection of data with necessary back-up system are among the arrangements included in the bylaws. It also prescribes punishment for wrongdoing DPs.
Speaking on the occasion, Sebon Chairman Babu Ram Shrestha said share transactions will be fast, transparent and credible once the CDS is introduced in the capital market.