Bourse working to facilitate settlement of online trades

- RAJESH KHANAL, Kathmandu

Mar 12, 2019-

The Nepal Stock Exchange is preparing to link its automated trading platform with Nepal Clearing House in a bid to facilitate the settlement of online trades. Nepal Clearing House eases the settlement of financial transactions between multiple institutions via an electronic platform. Currently, it is connected with 98 financial institutions.

The link-up with Nepal Clearing House is expected to encourage more investors to use the online stock trading system, the Nepal Stock Exchange said. The bourse is struggling to remove bugs from the online trading system that has put off many share investors.

Nepal Stock Exchange spokesperson Murahari Parajuli said they would sign an agreement with Nepal Clearing House to integrate the stock trading system. “It will help investors settle payments online,” Parajuli said.

The stock exchange has been providing access to individual investors to the online trading system from November. But very few investors have been using the platform due to recurrent technical glitches and the compulsion to visit their stockbrokers in the absence of an online payment system.

Only 3,000 out of the more than 200,000 active investors in the secondary market have received customer reference numbers in the four months since it opened, according to the stock exchange.

Investors will be able to make funds transfers through any bank that is a member of Nepal Clearing House after the agreement is signed, Parajuli said. Currently, investors have access to online financial transactions through only four clearing banks--Global IME Bank, Nepal Investment Bank, Siddhartha Bank and Prabhu Bank--with which the Nepal Stock Exchange has integrated its system. According to Parajuli, the stock exchange is in talks with Nepal Clearing House to finalise the fee that it will have to pay for the service.

Bharat Ranabhat, president of the Stockbrokers’ Association of Nepal, said the online payment system could attract a greater number of investors to online trading. “The Nepal Stock Exchange should work to remove the technical problems seen in the system for long-term development of the country’s stock exchange market,” said Ranabhat.

In the past four months since online trading opened, share investors have been facing problems like the software hanging frequently, wrong information being displayed on the interface and failure to receive the password instantly. On Monday, stock trading on the secondary market was halted for half an hour due to software problems. The Securities Board of Nepal, the sector regulator, has blamed poor quality software for the problems. Nepal Stock Exchange has not been able to fix the glitches permanently.

Published: 12-03-2019 09:00

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