Companies listed on the Nepal Stock Exchange (Nepse) have been instructed to submit their financial information electronically to the bourse before making it public.

Nepse launched the software to upload the details on Friday and announced that the listed companies were strictly prohibited from making them public before obtaining its approval.

The online system is expected to control possible anomalies in the secondary market due to information leaks made by listed companies. According to Nepse, the system will increase the access of individual investors to the financial information of listed companies enabling potential investors to make informed decisions about buying and selling shares.

Nepse General Manager Sitaram Thapaliya said they had introduced the portal service to disseminate timely information about the listed companies. “It will also facilitate companies operating out of the Kathmandu Valley to submit their information easily,” he said, speaking at a programme. As of now, 242 companies are listed on the Nepse. According to new provision, these companies have to upload information that could influence the secondary market to the portal. The companies need to post their current profile, financial report, board of director profile and information on corporate activities on the Nepse portal. They have to provide information to Nepse immediately after the decision of their board of directors.

Even before the new provision was implemented, companies could disclose their financial information only after receiving Nepse’s approval, but it was being done manually. According to Nepse, the approval could take even several days.  As per the regulation, companies cannot disclose their financial information during trading hours that last from noon to 3 pm. However, due to the lengthy procedure under the manual system at present, there is a risk that the companies’ information could be leaked providing ample room for big investors to take undue advantage from it.   

In recent days, the secondary market has been seeing an increasing number of investors. As a result, the average daily turnover has crossed Rs800 million while the Nepse index has made a big jump. Possible manipulation by big players in the stock market can pose a risk to the investments of general investors.  

Nepse Deputy Manager Niranjan Phuyal said they would be providing log-in access to listed companies. “They will have to send their information to Nepse online which will be first approved by Nepse before making it public,” he said.

According to Nepse, the system will also help to assess the difference in the time when companies make their decision and the time when they post the information to the Nepse portal. “If any companies are found delaying posting information without any proper reason, we will take action against them as per Nepse regulations,” Phuyal said.