New system to allow investors to place trading orders from their homes without having to come to their brokerage offices
KATHMANDU, July 6: Nepal Stock Exchange (Nepse) is planning to test an automated online-trading system from mid-August and replace the existing semi-automated system used for trading of stocks by mid-November.
The fully-automated online-trading system being developed by YCO Pvt Ltd, an information technology firm, will allow investors to put their orders to buy or sell shares online while everything -- including payment, clearing and settlement -- will be carried out electronically, Nepse officials said.
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 has agreed to deliver the system within 14 months.
Nepse Spokesperson Murahari Parajuli said that the fully-automated online trading system will be tested in mid-August while such system will be readied for the implementation by mid-November after incorporating necessary feedback and suggestions received from Nepse officials during the test phase.
Issuing a statement on Wednesday, Nepse said that the YCO Pvt Ltd has informed Nepse officials at a meeting that it has been working on various modules of the proposed project in a parallel way and will make the system available for test in mid-August.
"Currently we have intranet trading system which will be replaced by internet system whereby investors can place their trading orders from their computers from their home without requiring to come to broker's office," Sitaram Thapaliya, the Nepse's General Manager, told Republica.
With the new online trading system, there will be new components of member portal system, surveillance system, and collateral system, among others.
"Like watching replay of a football game, we can go back to a certain transaction and check whether there has been any manipulation and take corrective measure if there has been any problem," 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 the online system.
Nepse up 10 points
Nepal Stock Exchange (Nepse) benchmark index rebounded 9.78 points on Wednesday after a continuous fall in every trading day this week. The market closed at 1,551.06 points. The preparation to impose 13 percent value added tax on brokerage commission had sent the bearish market further down amid worries that such tax burden on investors will further increase the transaction cost. However, the stocks rallied as many investors took the market correction as a 'buying opportunity', according to analysts. Except manufacturing and processing and hotels groups, all trading groups posted gain today. A total of 1.08 million units of shares worth Rs 482.98 million were traded in the market through 5,501 transactions.