Stock market regulator approves T+2 settlement system

 Securities Board of Nepal (Sebon) has reduced the settlement and clearance system time to T+2 from current T+3 to encourage more trading hoping that the exchange will be more dynamic with a faster settlement system.

The move – that was mentioned by the regulator on it’s to-do list of for the fiscal year 2077-78 – is expected to please the stock traders as they will now get paid within the two days of the trading. The regulatory body approved the T+2 due to increasing use of technology in the stock market and international practice, according to the Sebon.

The CDS and Clearing (CDSC) Ltd had submitted a proposal to the regulator to change the current settlement T+3 system to T+2, a press note from the Sebon reads, adding that it has approved the proposal. 

T+3 means that it takes 3 days for the settlement of securities traded as the buyers receive the shares that they buy in about three days. But with the Sebon’s approval of T+2 system, the settlement process for the shares traded will hopefully take lesser time, the press note adds.

It is a frequent complaint from investors that they do not get the shares – in case of buying – and payment – in case of selling – on time. Even under the current system – the T+3 system – the clients have not been able to receive their payment within three days neither have they been able to get paid within a week. However, the authorities have claimed to improve and speed up the settlement system convincing the investors, who still do not believe.

The CDSC said that the T+2 system will be implemented after it issues a public notice addressing all the grievances.

Sebon approves centralised KYC Service Operation Directive

 The capital market regulator today the Centralised KYC Service Operation Directive 2077.

After the approval from Securities Board of Nepal (Sebon), investors can now fill the ‘Know Your Customer’ (KYC) forms with their personal details from their homes through the authorised person or employee of the KYC registration representative.

The directive has made the KYC details accessible to all entities within the securities market, according to a press note issued by the Sebon. “It enables the customers to file their identification details with their stock brokers easily and safely amid the current coronavirus pandemic,” according to the directives, which was submitted to the board by CDS & Clearing Ltd. The Sebon approved the directives and returned it to the CDSC for implementation.

The directive also mentions the provision of eKYC representative registration, provision of the development of eKYC system and provision of eKYC registration for securities transactions or related services for the customers. The directives also includes the provisions related to the use of KYC details, refining and enforcing KYC details, confidentiality and security of customers’ KYC details, and legal action in case of misuse of KYC details, according to the Sebon.

The capital market regulator expects that the implementation of the guideline will help reduce the various complexities involved for customers while submitting the same details in many places to avail the service of the share market. “The new system is also expected to ease the process of securities trading for the investors and help in the overall development of the stock market.”

Nepse preparing to extend share trading hours

 Nepal Stock Exchange (Nepse) is preparing to extend the share trading hour.

Currently, the share market sees trading from 11am to 3pm – for 4 hours – from Sunday to Thursday.

However, the Nepse is planning to extend the trading time by one hour to five year. The Securities Board of Nepal (Sebon) has asked – writing a letter – Nepse to extend the share trading time by an hour from 10:30 am to 3:30 pm to make it five hour.  

The regulatory body of the capital and commodities market has asked the Nepse to extend half an hour in the beginning and ending, informed the Nepse that has already started preparations. “We have held several rounds of discussions on the issue and will soon finalise procedure,” chief executive officer of Nepse Chandra Singh Saud said, adding that it will take some time to manage the CDS and Clearing software to make it compatible with the Nepse software for settlement of shares.

Nepse can extend the share trading hours only after holding consultations with YCO – the company that developed software for both Nepse and CDS and Clearing – the Nepse informed.