KATHMANDU, Nov 7: The Securities Board of Nepal (SEBON) has initiated the policy process to introduce intra-day trading, which aims to allow for the purchase, sale, and settlement of securities within the same day in Nepal Stock Exchange (NEPSE).
With the objective of making this system organized, transparent, and secure, the Board has prepared a preliminary draft of the ‘Intra-day Securities Trading Regulations, 2083’ and has invited feedback and suggestions. The introduction of intra-day trading is expected to increase market liquidity, assist in the fair pricing of shares, and further accelerate the overall pace of trading.
It has been proposed that with the implementation of the intra-day system, investors must sell any shares they have purchased or purchase shares they have previously sold within the same trading day, effectively bringing their position to zero. Under this system, shares cannot be held for an extended period.
SEBON moves to introduce intraday stock trading to boost market
According to the proposed regulations, this facility will not be available to all companies listed on NEPSE. Only those companies that meet specific financial and technical criteria prescribed by the board will be deemed eligible for such trading.
Companies will be selected based on factors such as their market capitalization, liquidity in the secondary market, daily trading volume, the number of shares held by the general public, price volatility, and corporate governance. The NEPSE will periodically update and publish the list of eligible securities; it also reserves the right to remove or suspend any security from the list if risks are identified.
The brokerage firms wishing to provide intraday trading services must obtain separate, mandatory approval from SEBON. For this purpose, it has been proposed that a broker must have a minimum paid-up capital of Rs 200 million and a net worth exceeding its paid-up capital.
Furthermore, brokerage firms are required to have a reliable risk management system, a mechanism integrated with the trading system, a Business Continuity Plan (BCP), a disaster recovery plan, and a dedicated risk management officer. Brokers who fail to meet the prescribed technical and managerial standards will be prohibited from offering this service.
