Tuesday, November 6, 2018

Nepse launches online trading today

The stock market has formally switched into an online system from today. Finance Minister Dr Yubaraj Khatiwada launched the Nepse Automated Online Trading System (NOTS) that will allow investors home and abroad to carry out securities trading online.
Nepal Stock Exchange (Nepse) started the online trading – based on a fully automated system – on the direction of the regulator of capital market, Securities Board of Nepal (Sebon).
The new technology, which was on trial since the starting of current fiscal year, aims at upgrading the domestic share market of an international standard. Inaugurating, the online system, the finance minister said that domestic share market has been upgraded to the international standard. “This is not only a major development for the Nepali share market but also a milestone for the government as the country heads towards e-governance and financial sector upgradation process," he added. He also said that the online trading system in the secondary market will also help strengthen the governance of the private sector.
With this new online trading system, investors will have an access to various features along with online entry of trading orders, real time details including price information, high speed matching system and multiple orders. "The NOTS features 20 modules related to internal control system such as listings, matching engine and index management, brokers management, real time information flow, risk management system, traders work stations, super administration terminal, order route management, exchange massaging system, members portal, brokers back office management, supervision system, users management, market makers and management information system and reporting," according to the Nepse.
Likewise, the new system, which will replace the existing manual trading system known as computerised trading system (CTS), will end the compulsion for investors to visit brokerage office for buying or selling their securities. "The online trading system from the open outcry in the share market has been a remarkable development," said Sebon chairman Dr Rewat Bahadur Karki. "Currently, the investors had to compulsorily visit the office of the share brokers to buy and sell shares," he said, adding that the buyers and sellers will not need to visit the share brokers to trade the stock. "All the share brokers have been associated with the new fully automated online system."
Individual’s email ID and mobile number are compulsory under personal details to be able to operate the system, which is expected to be a milestone in the domestic capital market.
"Now, investors in all 677 local units of the country have access to stock trading," he added.
It will also help increasing people’s access to the share market," Karki said, adding that investors will have to open a personal account at the broker office and then they can trade in shares through the online system from home, office or anywhere with internet facility."
The capital market regulator chair, on the occasion, also mentioned that he is very confident of the online system being risk-free and added that it would be more efficient now for Nepalis to trade shares from home or abroad.
However, stockbrokers are not confident on the online trading system. "Stockbrokers are going to face problems when making settlements as the four banks – Global IME Bank, Prabhu Bank, Nepal Investment Bank and Siddhartha Bank – assigned the authority to make settlements were yet to integrate their systems with Nepse’s online system," Stock Brokers Association of Nepal chairman Bharat Ranabhat said, adding that the government also needs to immediately establish a settlement guarantee fund for secure transaction for share traders. " Apparently, the government had earlier committed to establishing such a guarantee fund worth Rs 4 billion."
But the Nepse has claimed that it will take the responsibility for all transactions conducted through the online system.

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