Individual investors can now settle their share transactions online with the Nepal Stock Exchange (Nepse) allowing clearing banks to operate the electronic transfer system from Tuesday. Stock traders can now use the full-fledged online trading platform, freeing them from having to visit their brokering companies. 

Currently, four commercial banks—Nepal Investment Bank, Global IME Bank, Prabhu Bank and Siddhartha Bank—have obtained licences to operate as clearing banks. Among them, only Nepal Investment Bank has been providing electronic transfer service to its clients to settle transactions on the secondary market. 

Nepse spokesperson Murahari Parajuli said the other three banks had also upgraded their systems to make electronic transfers possible. “From now on, investors can settle transactions with the stockbrokers account through the clearing banks, and they don’t need to be appear physically at their broker’s office,” Parajuli said.

The 50 brokerage firms in the country have accounts in each of the clearing banks. “To use the facility, investors need to open a separate account with any of the four clearing banks through which they can settle transactions with their brokers,” said Parajuli, adding that investors could carry out transactions in any volume as the clearing banks have not imposed any limits. 

Investors also need to update their know your customer profile with their brokers. In addition, they have to access e-banking services from the concerned banks to operate the system. 

A clearing bank is allowed to handle a single demat account of an investor. Nepse has forbidden investors from conducting transactions through more than two demat accounts. 

On November 6, Nepse launched the full-fledged online system providing access to the general public. Investors need to obtain a login ID from their brokers which allows them to post purchase or sale orders themselves online. In last two months, 600 investors had received login IDs, according to Nepse. 

“But very few of them have been using the system either due to lack of knowledge about accessing the system or the compulsion to visit their brokers to settle transactions,” Parajuli said. According to a stockbroker, many investors are still reluctant to use the online platform as a number of brokers have been providing credit facilities to their regular clients.

Nepse down 1.36 points