Strengthening Integrity of Stock Market

Published On: August 28, 2023 07:45 AM NPT By: Republica  | @RepublicaNepal

In a laudable move that underlines its commitment to maintaining the integrity of the stock market, the Nepal Stock Exchange (Nepse) has taken robust measures to curb unscrupulous trading practices. With the revision of regulations governing stock trading supervision, Nepse's proactiveness sends a resounding message that integrity and fairness will reign supreme within the country's sole share market. This step, aimed at holding brokerage firms accountable for their actions, is a commendable stride towards fostering a transparent and trustworthy investment environment. The cornerstone of a healthy financial ecosystem rests on the shoulders of institutions that ensure a level playing field for all market participants. With its unwavering focus on eliminating misconduct, Nepse leadership has demonstrated its commitment to this pivotal role. By proposing the suspension of licenses for stockbrokers who fail to uphold good practices, Nepse strikes at the heart of the matter—ensuring that integrity remains sacrosanct. The two-strikes-a-year rule further emphasizes the regulator's resolve, reinforcing the notion that unethical behavior will no longer be tolerated.

Transparency in financial dealings is a bedrock principle that safeguards investors' trust in the stock market. Nepse's vigilance against brokerage firms withholding crucial information showcases its dedication to transparency. Additionally, the firm stand against the arbitrary manipulation of share prices underscores the regulator's dedication to fair market practices. By restricting the use of unauthorized software or terminals, Nepse curtails potential avenues for unfair advantage, ensuring that all market players abide by the same set of rules. The commitment to ease investors' concerns by preventing unwarranted hurdles is a testament to Nepse's prioritization of investor welfare. In a bid to eliminate conflicts of interest and preserve market integrity, the requirement for prior approval to trade shares under a family member's name is a significant leap forward. This stipulation aligns with global best practices, preventing any potential misuse of power and influence that could harm investors' confidence. Furthermore, the regulator's consideration of barring individuals with a history of criminal activities from trading in stocks reflects its holistic approach to maintaining market credibility. Nepse's intention to suspend trading by stockbrokers who fail to adequately address issues raised by the regulator underscores its uncompromising stance on accountability.

Nepse's steadfastness in addressing prevalent issues is a clear response to the growing instances of misconduct perpetrated by brokerage companies. The failure to settle financial transactions promptly and engaging in questionable trading practices under the guise of familial relations are detrimental to the market's credibility. The regulator's proactive actions lay down the marker that such practices will no longer be tolerated, reinforcing the idea that accountability is non-negotiable. Amid these regulatory changes, the proposed increase in license fees and annual renewal charges deserves attention. While this might seem like an additional financial burden, it's important to recognize that these fees play a role in ensuring effective regulatory oversight. By raising these fees, Nepse can bolster its resources to execute its supervisory duties diligently, contributing to the overall health of the market. As a newspaper, we believe that Nepse's latest measures to curb unscrupulous trading practices mark a pivotal moment for Nepal's stock market. By prioritizing transparency, fairness, and investor protection, the regulator sets a precedent that is likely to bolster investor confidence and attract much-needed capital inflow. This move is not only timely but also essential to maintaining the credibility and reputation of Nepal's stock market. As the Securities Board of Nepal (Sebon) evaluates the proposed regulation, one can hope that it will see the far-reaching positive impact these measures could have on the nation's financial future.

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