The Securities Board of Nepal (Sebon) has blasted the Nepal Stock Exchange (Nepse) for not implementing its directives to buy foreign software and appoint two more clearing banks while the country’s only bourse has replied that it has fully carried them out.

However, Nepse has decided to install software bought from a domestic company against Sebon’s instructions to use a ‘tested system’.

Spokesperson for Sebon Niraj Giri said they had directed Nepse to introduce a tested system having a proven track record from internationally recognised companies. “If such a system is introduced, it could attract more investors including non-resident Nepalis,” he said.

Since 2007, Nepse has been operating software developed by Comdaq, an UK-based company, for stock trading.

Sebon has planned to replace the current software with a new software in order to facilitate fully online trading. The demat system was implemented on January 15, but only transaction settlement can now be done online.

A Nepse official said that they had acquired software developed by an Indian company that has got international recognition. “As per the request of the Indian company, domestic software developer Yomori will be working only as a local partner,” said the Nepse source.

Likewise, Sebon has expressed dissatisfaction over delays by Nepse in appointing more clearing banks. Four months ago, the regulator had asked Nepse to name two more clearing banks to speed up share transactions.

Presently, Global IME Bank is the only clearing bank handling share transactions. Sebon had planned to appoint two more clearing banks considering the rising volume of share trading.

The value of transactions at the stock market has surged to Rs600-700 million daily. Although stock transactions are supposed to be cleared within three days from the date of transaction, a few stockbrokers have not been able to do so within the time limit. They have attributed the delay in settlement of share transactions to work overload at the single clearing bank.

However, Nepse has claimed that the settlement of share transactions is going on well in its clarification submitted to Sebon. The clearing bank has been performing fine and there is no need for extra banks, Nepse said.

Nepse has also stated that it could not appoint more clearing banks as it has not been able to sign an annual maintenance contract (AMC) with the Indian service provider to CDS & Clearing.

“Nepse said that it had not been able to sign an AMC as the Indian service provider was about to merge with other companies in India,” said Giri. According to him, the AMC is necessary for the smooth operation of the settlement of transactions.

Attempts to contact Nepse General Manager Sitaram Thapaliya for a statement were not immediately successful.