Country’s secondary market goes digital

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Kathmandu, November 6

In a first, the country’s sole secondary market — Nepal Stock Exchange — has formally switched to the online trading system.

Finance Minister Yubaraj Khatiwada inaugurated the online system at 11:00am today when the share market opened for trading.

“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 stated.

Minister Khatiwada further mentioned that the government was putting all its efforts to attract institutional investors to the stock market and also to expand the mutual fund and commodities exchange market to diversify the market.

However, stockbrokers have some reservations as to whether the online trading system will be both systematic and reliable. “We still have some issues regarding timely settlement. Online trading can be considered fully operational only when Nepse integrates the banking channel in its payment system,” said Bharat Ranabhat, chairman of Stock Brokers Association of Nepal.

Ranabhat added that stockbrokers would face problems when making settlements as the four banks assigned the authority to make settlements were yet to integrate their systems with Nepse’s online system. “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.

“We would like to assure all stakeholders that we will bear the responsibility for all transactions conducted through our online system,” informed Chandra Singh Saud, chief executive officer of Nepse. “The system that we have in place is fully secure and investors do not have to worry about the system being breached.” Saud added he was confident that the online trading system would take the country’s stock market to a new height.

Chairman of Securities Board of Nepal Rewat Bahadur Karki mentioned that he was 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. He also opined that the online system would aid in expanding financial access, literacy and awareness among people.

From now onwards, share investors will first need to visit share brokers to open a personal account and then they can conduct share trading through an online system by sitting at home, or from office or from anywhere internet facility is available.

The brokerage firms will provide accounts to clients through which they will be able to place their sale and purchase order through the use of internet. Nepse has said it will also add some features for margin trading as the securities market regulator has recently issued directives for the same.

 

The post Country’s secondary market goes digital appeared first on The Himalayan Times.

Written by Sureis
This news first appeared on https://thehimalayantimes.com/business/countrys-secondary-market-goes-digital/ under the title “Country’s secondary market goes digital”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.