Investors will be able to buy primary and rights shares online after the Centralised Application Supported by Blocked Amount (C-ASBA) process is implemented on February 23.

The new system is expected to reduce hassles for investors, issue managers and the banks through which investors submit their applications to buy shares on the stock exchange.

C-ASBA is an advanced form of the existing ASBA interface which is claimed to be more user friendly. Last year, the Securities Board of Nepal (Sebon) launched the ASBA process that enabled investors to apply to buy shares of listed companies through their bank accounts.

Currently, investors need to make a trip to their bank to fulfil the documentation procedure to buy rights shares and shares issued in initial public offerings and further public offerings.

“After the new system is implemented, investors will receive their login identity from the concerned bank which will allow them to apply for primary shares over the internet,” said Dev Prakash Gupta, chief executive officer of CDS and Clearing. To use the online system, investors need to obtain a C-ASBA registration number from the concerned bank that will provide them access to Mero Share, a field in the online form of CDS and Clearing.

“Using the online platform, investors can submit details of the primary or rights shares they want to buy,” he said. “Based on the information provided by the potential investor, the bank can block the required deposit until the share allotment is completed.”  As per CDS and Clearing, the new system is expected to reduce hassles not only for investors, but also for issue managers and the concerned banks. “The system will help minimise the cost of logistics and manpower for both institutions,” Gupta said.

In addition, the system is expected to help reduce the processing time. “As all the applications and subscriptions are updated instantly, it will shorten the time needed for the share allotment process,” he said.

According to CDS and Clearing, the existing ASBA process takes about 10 days to study the information submitted by potential investors who have applied to purchase stocks.

In addition, investors may not be able to correct any errors in the information they have submitted, and miss out on the share issuance. “However, the new system allows investors to rectify any mistakes they have made while filling out the online form,” Gupta said. Gupta said investors could also go to their banks to apply for shares if they have  any problem using the online form. According to him, all the 25 banks and financial institutions that have been licensed to operate the ASBA process will be eligible to implement the C-ASBA process.

CDS and Clearing had planned to implement the system on January 23, but postponed the launch by a month following instructions from Sebon.