50 Broker companies come together and register an IT company; This is why

Mon, Sep 28, 2020 4:52 PM on Stock Market, Latest,

All the 50 licensed broker companies in NEPSE have come together and registered an IT company.

The IT company is named Captech Nepal and was registered yesterday, i.e. September 27. The authorized capital of the company is Rs. 25 crores and the paid-up capital is Rs. 10 crores.

There are five members in the management committee, including Mr. Tanka Prasad Gautam, the chairman of Broker No. 48, Trishakti Securities. In fact, Gautam will also serve as the chairman of the newly registered company.

The IT company is expected to mitigate the technical issue prevalent in the securities market of Nepal. Currently, all the broker companies use the online trading system (TMS) provided by NEPSE. Although the system was fine during the initial phases, it has shown repeated issues as the volume of online investors has increased. We have covered the issues in the past and investors themselves are also familiar with them.

*TMS makes you sell the same stock multiple times: Yes, you might lose money. No, NEPSE has no idea what went wrong*

*After a frustrating day of grappling with TMS, NEPSE gains 12.49 points and closes at 1,520.69; Total turnover declines to Rs. 2.20 Arba*

*TMS not functioning today too; NEPSE refuses to answer*

There isn't a question that such problems in the only securities exchange of Nepal should be solved. At such a time, the initiation of the broker companies can be seen as a beacon of hope to the future of NEPSE and its investors.

The new company will also be influential to provide technical support to broker companies, users, and will play an important role in further product developments.

Sharesansar called Mr. Bharat Ranabhat, chairman of the Stock Brokers Association of Nepal. Ranabhat says that this move is expected to remove the broker companies' dependence on NEPSE for the online investment portal. Furthermore, he is hopeful that Captech Nepal will provide a more reliable database system.

We also called NEPSE to get their take on the issue. NEPSE spokesperson Mr. Murari Parajuli says they have taken the initiation positively. Parajuli says that it is a common practice in the international stock exchanges for stockbrokers to have their independent online system. No matter whether they have their own or they keep using NEPSE's system, the investment portal should comply with the rules and regulations stated by the regulatory body.

Parajuli also believes the newly registered company might have been brought about to fulfill the technological needs of Nepal's capital market in the future. All in all, NEPSE seems welcoming of this initiation.

How do you feel about this move? The comment section is for you.