KATHMANDU, NOV 30. 2012
Stock brokers are facing a trading block due to complications of CDS and Clearing Ltd (CDSC)’s clearing and settlement system that has caused a delay in settling transactions.
“From the beginning of this week, Nepse started blocking the trading of brokers who have failed to settle transactions on time, and almost half the brokers are unable to place orders,” said president of Stock Brokers Association of Nepal Anjan Raj Paudyal.
CDSC’s new operation mode requires both the selling and buying brokers to present documents simultaneously, which has delayed the whole settlement process. According to this operation mode, documentation will not move forward if any one of the buying or selling broker fails to submit the required documents simultaneously.
A buyer may have already deposited the amount and the broker may have the voucher which needs to be submitted for clearance, but if the selling broker delays submitting the documents for share transfer, then CDSC does not accept any document from the buying broker.
“Even brokers who are ready to submit documents on time are suffering from trading block because of counter brokers as the system is impractical and cannot detect which broker is causing the delay,” said Paudyal.
Nepse’s clearing and settlement bylaws allows Nepse to penalise and suspend the trading of any broker who causes a delay in settlement for not submitting documents or money on time.
Due to trading block of brokers, transaction volume today declined by 20 per cent in comparison to yesterday. Likewise, number of transactions came down to about 1100 from 1300 yesterday, and number of shares traded dropped to around 200,000 from more than 242,000 units yesterday.
“We have already made the Nepse board and CDSC aware that the system is delaying the settlement procedure instead of speeding it, and though they have said that they are ready to bring in necessary changes nothing has been done so far,” said Paudyal.
CDSC started the manual settlement of share transactions from October 30 of shares traded since October 17 –– just before the Dashain vacation.
The job was transferred to CDSC from Nepse to make settlement and clearing services faster for investors.
Source: THT
Stock brokers are facing a trading block due to complications of CDS and Clearing Ltd (CDSC)’s clearing and settlement system that has caused a delay in settling transactions.
“From the beginning of this week, Nepse started blocking the trading of brokers who have failed to settle transactions on time, and almost half the brokers are unable to place orders,” said president of Stock Brokers Association of Nepal Anjan Raj Paudyal.
CDSC’s new operation mode requires both the selling and buying brokers to present documents simultaneously, which has delayed the whole settlement process. According to this operation mode, documentation will not move forward if any one of the buying or selling broker fails to submit the required documents simultaneously.
A buyer may have already deposited the amount and the broker may have the voucher which needs to be submitted for clearance, but if the selling broker delays submitting the documents for share transfer, then CDSC does not accept any document from the buying broker.
“Even brokers who are ready to submit documents on time are suffering from trading block because of counter brokers as the system is impractical and cannot detect which broker is causing the delay,” said Paudyal.
Nepse’s clearing and settlement bylaws allows Nepse to penalise and suspend the trading of any broker who causes a delay in settlement for not submitting documents or money on time.
Due to trading block of brokers, transaction volume today declined by 20 per cent in comparison to yesterday. Likewise, number of transactions came down to about 1100 from 1300 yesterday, and number of shares traded dropped to around 200,000 from more than 242,000 units yesterday.
“We have already made the Nepse board and CDSC aware that the system is delaying the settlement procedure instead of speeding it, and though they have said that they are ready to bring in necessary changes nothing has been done so far,” said Paudyal.
CDSC started the manual settlement of share transactions from October 30 of shares traded since October 17 –– just before the Dashain vacation.
The job was transferred to CDSC from Nepse to make settlement and clearing services faster for investors.
Source: THT
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