Nepse postpones testing of fully automated share trading system

Published On: October 4, 2017 02:41 AM NPT

KATHMANDU, Oct 4: Nepal Stock Exchange (Nepse) has postponed its plan to test fully automated stock trading by at least three months.

The sole stock exchange company in the country had earlier announced to test the new trading system by mid-August. Nepse officials say that they had to postpone the fully automated stock trading as YCO Pvt Ltd - the supplier of the system - is yet to complete its work. 

Nepse is now planning to test the automated online-trading system in mid-November.
“Out of 17 modules required for the new system, the vendor has supplied only 12 modules,” Murahari Parajuli, the Nepse spokesperson, told Republica. “We plan to test the fully trading system from the third week of Kartik (mid-November),” he added. 
According to Parajuli, the vendor is in the process of completing matching engine module. “This module is important to take the new system in the testing phase. Once they complete it, we will start testing the system,” he added. 

Matching module enables the buyer and seller to carry out and execute their orders in the new trading system.

The fully-automated trading system being developed by YCO Pvt Ltd, an information technology firm, will allow investors to place their orders to buy or sell shares online while everything -- including payment, clearing and settlement -- will be carried out electronically. 

Following a long legal battle and tussle with Securities Board of Nepal (Sebon) -- the capital market regulator -- over the selection of YCO Pvt Ltd, the Nepse had signed the agreement with the firm for supply, delivery, installation and commissioning of the fully-automated online trading system in February after a court ruling came in favor of the vendor. 

The vendor had agreed to deliver the system within 14 months.

Though Nepse has said that it will begin testing the new system from mid-November, it is still uncertain when the new system will come into operation.  “It all depends on how long the testing phase goes on as well as the preparation and readiness from the part of brokerage firms and clients,” said Parajuli. “We intend to make the facility available as soon as the system passes the test phase. After that, it is up to the brokerage firms and clients to settle other nitty-gritty like agreement between the Nepse and brokerage firm to make their system compatible,” he added. 

According to Nepse officials, an automated debit and credit system of cash from bank account and stocks from the dematerialized account of investors will be in place once the orders are matched and trading is executed through online system.

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