The Nepal Stock Exchange (Nepse) has blamed a management reshuffle and hurdles faced by the vendor for its failure to launch full-fledged online trading on Tuesday as announced earlier.

Last July, outgoing general manager Sitaram Thapaliya had said that the online trading system would come into operation by November 7.

Explaining the reasons for missing the deadline at a press meet on Tuesday, Nepse officials said the vendor YCO had received the contract to have the online trading system in operation in 14 months only on April 19, which means the company still has until July to complete the task.

Nepse Chief Executive Officer Chandra Singh Saud declared that the online trading system would be operational by this deadline. “Nepse has acquired the necessary hardware and approved the system requirement specification documents submitted by YCO,” Saud said.

According to Nepse, it has okayed all the 16 modules necessary to implement the online system. “YCO has configured six of the modules and it has said that the rest will be configured soon,” Saud said.

YCO has submitted the modules related to the internal control system such as listings, matching engine and index management, Saud added. “The company is currently working on the modules related to security and risk management in accordance with the country’s laws.”

The country’s stock exchange is semi-automated and shares are traded electronically via stockbrokers. The rest of the work has to be performed manually.

After the fully automated system becomes operational, stock investors will be able to post buy and sell orders and obtain related information using their computers, tablets and smartphones. This will reduce share traders’ dependency on stockbrokers.

Meanwhile, Nepse said it had started to further break trading groups into smaller divisions. Currently, listed companies are divided into 10 groups.

Nepse has formed a separate trading group of microfinance companies which were previously lumped into the development bank group. There are currently 33 companies in the microfinance group.

According to Nepse, it has planned to split Citizens Investment Trust from finance companies. Similarly, it wants to separate life insurance and non-life insurance companies into different groups.

Saud said the separation of trading groups into sub-divisions would help investors to firmly assess the group’s performance and allow them to minimise their risk.

Sebon prepares draft regulation

KATHMANDU: The Securities Board of Nepal (Sebon) has prepared a draft regulation in compliance with the Commodities Exchange Market Act which was passed by Parliament three months ago.

The stock market regulator, which has also been mandated to regulate the derivative market, has proposed a maximum fine of Rs5 million and a jail term of five years for players convicted of being involved in misconduct in the commodity exchange market.

Sebon has planned to enforce a fully online trading system and require money transactions to be done entirely through banking channels.

Similarly, Sebon has fixed a paid-up capital of Rs5 million for market operators, and made it mandatory for brokers to maintain detailed information about investors and report sensitive information promptly. (PR)