KATHMANDU, DEC 20, 2012
CDS and Clearing Ltd (CDSC)’s stock clearing and settlement mode of operation is up for amendment following opposition from brokers.
Following the tug-of-war for two months between brokers and CDSC, the latter is now going to announce an amendment in the operation mode for stock clearance and settlement that was dubbed as impractical by brokers.
The new mode of operations implemented by CDSC required both selling and buying brokers to present documents simultaneously. When any one of the brokers delayed in submitting their of documents, the clearing and settlement process was put on hold, and both the brokers were liable to be penalised for delaying the settlement according to the law.
On December 1, trading of all 48 stock brokers was blocked by Nepse for the first 45 minutes as their trading limit with the stock exchange was insufficient due to the delayed settlement process.
“The recommendations made by the committee formed to address the issue have already been submitted to CDSC and is awaiting approval from Nepse and CDSC board,” said CEO of CDSC Subodh Sharma Sigdel.
“Approval might be granted within this week,” he added.
CDSC started the manual settlement of share transactions from October 30 of shares traded since October 17. Earlier, the job was undertaken by Nepse which was notorious for delaying the clearing, way beyond the regulatory four days since trading.
Brokers have admitted that CDSC is swifter and more efficient in clearing and settling share transactions, but called the system of requiring both brokers to be present simultaneously as impractical.
The committee, comprising of representatives from brokers, CDSC, Nepse and investors, was formed to recommend a system that would benefit all parties.
“The committee has recommended to oust only those brokers from trading that have failed to submit required documents in T+3 days, but to register the counter broker who has submitted his part of documents,” informed president of Stock Brokers Association of Nepal Anjan Raj Poudyal.
“This will ensure that clearing and settlement will not be delayed and only those brokers that are lax will suffer,” he added.
At present, CDSC is only undertaking manual clearing and settlement of shares. It is planning to start automated clearing by January 2013, which is supposed to make swifter.
Source: THT
CDS and Clearing Ltd (CDSC)’s stock clearing and settlement mode of operation is up for amendment following opposition from brokers.
Following the tug-of-war for two months between brokers and CDSC, the latter is now going to announce an amendment in the operation mode for stock clearance and settlement that was dubbed as impractical by brokers.
The new mode of operations implemented by CDSC required both selling and buying brokers to present documents simultaneously. When any one of the brokers delayed in submitting their of documents, the clearing and settlement process was put on hold, and both the brokers were liable to be penalised for delaying the settlement according to the law.
On December 1, trading of all 48 stock brokers was blocked by Nepse for the first 45 minutes as their trading limit with the stock exchange was insufficient due to the delayed settlement process.
“The recommendations made by the committee formed to address the issue have already been submitted to CDSC and is awaiting approval from Nepse and CDSC board,” said CEO of CDSC Subodh Sharma Sigdel.
“Approval might be granted within this week,” he added.
CDSC started the manual settlement of share transactions from October 30 of shares traded since October 17. Earlier, the job was undertaken by Nepse which was notorious for delaying the clearing, way beyond the regulatory four days since trading.
Brokers have admitted that CDSC is swifter and more efficient in clearing and settling share transactions, but called the system of requiring both brokers to be present simultaneously as impractical.
The committee, comprising of representatives from brokers, CDSC, Nepse and investors, was formed to recommend a system that would benefit all parties.
“The committee has recommended to oust only those brokers from trading that have failed to submit required documents in T+3 days, but to register the counter broker who has submitted his part of documents,” informed president of Stock Brokers Association of Nepal Anjan Raj Poudyal.
“This will ensure that clearing and settlement will not be delayed and only those brokers that are lax will suffer,” he added.
At present, CDSC is only undertaking manual clearing and settlement of shares. It is planning to start automated clearing by January 2013, which is supposed to make swifter.
Source: THT
No comments:
Post a Comment