Modernisation of secondary market faces delays
The Nepal Stock Exchange (Nepse) — the sole secondary market of the country — has failed to commence test operations of fully automated trading system that would eventually replace the semi-automatic trading system currently being used.
Initially planned for commencement by mid-August, Nepse is yet to finalise the date of the test operation of the new system.
According to Nepse, YCO Pvt Ltd has supplied 12 modules of the system out of 17 modules required to fully operate the upgraded system. When the contract was awarded in February, the system developer had agreed to supply the full system within 14 months at Rs 200 million.
Nepse officials informed that the process has been delayed because YCO Pvt Ltd — the supplier — has not completed the required works to test the new system.
“We are in constant touch with the developer and some features of the system are being tested internally,” said Chandra Singh Saud, general manager of Nepse. For now, Nepse is planning to begin testing the new system within November, but the date is yet to be fixed.
The new system will allow investors to place their orders to buy or sell shares online, and payment, clearing and settlement will also be done electronically.
Nepse and the Securities Board of Nepal (SEBON) were engaged in a long legal battle when Nepse began the procurement process of the system. The battle between the two organisations was finally settled by the Patan High Court on December 28, 2016, which paved the way for Nepse to move forward the procurement process of the new software.
The YCO Pvt Ltd had sold the system currently being used by Nepse in 2007. With the plan to implement the fully automated trading system, Nepse again selected the same company to supply the upgraded system. Earlier, SEBON had also directed Nepse to upgrade the trading system and synchronise it with international trading platforms.
Meanwhile, Nepal Investors Forum (NIF) has also urged Nepse to implement the fully automated trading system as soon as possible. In a meeting with the general manager of Nepse yesterday, NIF representatives demanded that a NIF member also be included in the implementing team.
“Fully automated trading system is essential for further growth of the market. So, Nepse should implement it as soon as possible,” said Ambika Prasad Paudel, chairman of NIF.
Published : October 27, 2017 , 4:54 am