SEBON wants more clearing banks

The Security Board of Nepal (SEBON) Wednesday directed Nepal Stock Exchange (NEPSE) and CDS and Clearing (CDSC) to establish at least three new clearing banks by 13^th April this year.

The SEBON has directed NEPSE and CDSC to make provisions for the clearing banks on the basis of

Securities Transaction and Clearing Bylaws, 2012.

“As the size of capital market is ever increasing and clearing service needed to be more competitive, qualitative and fast, we need more clearing banks,” SEBON spokesperson Niraj Giri said in a statement.

The first CDSC came into existence in 31^st March 2011, after about 22 years NEPSE opened its floor in January 1994. Until then clearing was operated by NEPSE itself.

It is promoted by NEPSE and is a sole provider of centralized depository, clearing and settlement services in the country.

According to SEBON, the number of securities transaction was increased to manifold in the last decade and with the implementation of dematerialization, number of share transaction and money would be further augmented.

In addition to that, securities brokers were on the process of establish and operate Remote Work Station outside the Kathmandu Valley which would further enlarge the market.

“We had one clearing bank when the capital market transaction was Rs. 10 million per day and the same bank has the load of about Rs. 500 million a day. Therefore, more clearing banks are required,” read the statement.

SEBON has expressed its hope that the increased number of clearing banks would help in online transactions in the future.

Likewise, it has asked the NEPSE to publish the price-sensitive information of listed companies in a standard format at the earliest.

Published in The Rising Nepal. Jan 28, 2016.