Nepal Stock Exchange to go fully automatic in NovThe Nepal Stock Exchange (Nepse) will be entering a new era on November 7 when it goes fully automatic.
The Nepal Stock Exchange (Nepse) will be entering a new era on November 7 when it goes fully automatic.
The country’s only stock exchange has planned to launch a fully automated online trading system. Share traders will then be able to post buy and sell orders and observe related information on their computers, freeing them of the need to depend directly on stockbrokers, Nepse said on Friday.
The semi-automated system currently in operation allows stocks to be traded electronically via stockbrokers. The rest of the process has to be done manually.
After the proposed automation system is implemented, investors will not have to visit their stockbrokers even to book buying or selling orders.
In 2007-08, Nepse adopted a partial automation system replacing the open outcry system under which brokers shout prices and offers to each other.
Since then, the stock market facilitator has been mulling to install a fully automated system. Nepse speeded up preparations after the court cleared the way for its software vendor YCO six months ago.
In March 2016, Nepse awarded a contract to create software to YCO, but the software company was unable to start work after the Securities Board of Nepal, the capital market regulator, disqualified it for not meeting the criteria. Nepse General Manager Sita Ram Thapaliya said that the vendor had completed most of the platforms necessary to implement a fully automated trading system. “The company needs to cover up only a few models in the line,” Thapaliya said.
After the new automated system comes to operation, investors will have to obtain a user ID and password from their stockbrokers. Share traders can then post their buy and sell orders and observe the market depth. They will need to have a bank account to conduct online stock trading.
Currently, 13 systems such as settlement, matching listing, security and surveillance, among others, are handled by a single integrated router.
According to Nepse, the fully automated online trading system will incorporate all these actions under separate routers ensuring efficiency in the stock trading system.
Thapaliya said the new system would feature a risk management system to safeguard the interest of share investors. “The risk management system will be monitored via the concerned stockbrokers, Nepse and CDS and Clearing,” said Thapaliya, adding that they would increase the transaction limit for stockbrokers to increase access to their clients.
Nepse will open the fully automated online trading system on a trial basis in mid-August. “Based on the feedback received, we will make the necessary changes within two months to ensure that the fully automated system is foolproof,” Thapaliya said.
As part of the preparations to implement the fully automated online trading system, Nepse has introduced an electronic stocks system and allowed stockbrokers to open remote work stations outside the Kathmandu Valley. Currently, stock trading can be done from 22 locations in various parts of the country.