SEBON again asks NEPSE to establish clearing banks

Kathmandu, July 15: As the Nepal Stock Exchange Limited (NEPSE) and CDS and Clearing (CDSC) failed to establish three additional clearing banks by April this year, the Security Board of Nepal (SEBON) Friday drew attention of NEPSE to materialize it at the earliest.

The capital market regulator had directed the NEPSE to establish additional clearing banks in January this year.

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

 “After the full implementation of the DMAT (dematerialization of share certificates), transaction of securities will be increased remarkably, therefore more clearing banks are required to address the growing demand,” SEBON said in a press statement.

The CDSC has been working as the sole clearing bank in the country.

The first clearing bank came into existence on 31^st March 2011, 22 years after 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.

Similarly, SEBON asked NEPSE to improve the transaction system and make it smarter. The automated transaction system of NEPSE had been facing problems from time to time.

 NEPSE was directed to make improvements in clearing and for timely pay-in and pay-out and make provisions for Settlement Guarantee Fund and Auction Market.

“NEPSE is the front line regulator of the share market, therefore it should effectively regulate and monitor the transaction of securities in the secondary market and activities of share brokers,” said SEBON spokesperson Niraj Giri.

Meanwhile, the NEPSE has extended the share transaction time by one hour.

From Sunday the transaction time will be 4 hours a day, 11 AM to 3 PM.

Meanwhile, SEBON organized training for investors in Galyang and Waling of Syangja district on Wednesday and Thursday.

“The training was organized with the support from Waling Chamber of Commerce and Industry, Syangja Chamber of Commerce and Industry and Miracle Educational Foundation,” read a press statement issued by the SEBON.

Board director Dr. Naba Raj Adhikar, deputy director duo Niranjaya Ghimire and Tej Prasad Devkota trained the investors about the capital market, legal aspects and efforts made to make improvements in the market.

Likewise, Giri Raj Dahal from NEPSE and Dev Raj Rijal from CDSC trained the participants on central depositary, securities transaction process and clearing process.