Friday, July 7, 2017

Share trading to go fully automatic in November

Nepal Stock Exchange (Nepse) is planning to go fully automatic from November 7.
The stock exchange has planned to launch a fully automated online trading system so that the share traders can be able to post buy and sell orders and observe related information on their computers, freeing them of the need to depend directly on stockbrokers, Nepse general manager Sita Ram Thapaliya said at a press meet today.
The semi-automated system currently in operation since 2007-08 allows stocks to be traded electronically via stockbrokers. Currently, the rest of the process has to be done manually.
Prior to the fiscal year 2007-08, brokers used to buy and sell hares through open outcry system by shouting prices and offers to each other at the Nepse floor. However, investors will have to obtain a user ID and password from their stockbrokers after the new automated system comes to operation. The Share traders can then post their buy and sell orders and observe the market depth. They will need to have a bank account to conduct online stock trading.
Currently, 13 systems including settlement, matching listing, security and surveillance, among others, are handled by a single integrated router.
According to the him, the fully automated online trading system will incorporate all these actions under separate routers ensuring efficiency in the stock trading system.
The new system would feature a risk management system to safeguard the interest of share investors. “The risk management system will be monitored via the concerned stockbrokers, Nepse and CDS and Clearing,” Thapaliya, said adding that they would increase the transaction limit for stockbrokers to increase access to their clients. "Nepse will open the fully automated online trading system on a trial basis in mid-August."
Based on the feedback, we will make the necessary changes within two months to ensure that the fully automated system is foolproof,” he added.
As part of the preparations to implement the fully automated online trading system, Nepse has introduced an electronic stocks system and allowed stockbrokers to open remote work stations outside the Kathmandu Valley. Currently, stock trading can be done from 22 locations in various parts of the country.
Nepse – the front line regulator – has been mulling to install a fully automated system since last one decade but the process speeded after the court cleared the way for its software vendor YCO six months ago.
In March 2016, Nepse awarded a contract to create software to YCO but the software company was unable to start the work after Securities Board of Nepal (Sebon) – the capital market regulator – disqualified it for not meeting the criteria.
Nepse general manager Sita Ram Thapaliya – who is on the final day of his four-year tenure as Nepse GM – said that the vendor had completed most of the platforms necessary to implement a fully automated trading system.
He also presented financial details of the Nepse. The Nepse witnessed a turnover of Rs 178.93 billion – in the 10 months of current fiscal year – compared to a total turnover of Rs 21.56 billion in the fiscal year 2012-13.
According to Thapaliya, the total turnover in fiscal year 2013-14 had gone up to Rs 77.25 billion, but dropped to Rs 66.53 billion in the subsequent fiscal year 2014-15.

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