Cos given 3 mths to digitise share certificates

KATHMANDU, APR 22 -

CDS and Clearing has asked the companies listed on the Nepal Stock Exchange (Nepse) to get the share certificates they have issued to their shareholders digitalized within the next three months.

According to CDS, it has requested the listed companies to dematerialise their share certificates as per its plan to go completely into electronic clearing of share transactions in the next six months.

Besides allowing speedy settlement of share transactions, the paperless system is expected to protect share certificates from the risks of damage, theft and forgery. Similarly, it will also make ownership transfers hassle-free.

According to CDS, digitalized clearing will facilitate verification of shares put up as collateral for bank loans.

CDS, a subsidiary of Nepse, launched transactions of paperless share certificates on April 15.

It processed the trading of 30 dematerialised shares of the Agricultural Development Bank with Kalika Securities and Trishakti Securities acting as the brokers.

As paperless transactions underway, CDS has to go completely digital within the next six months.

CDS Bylaws 2012 states that the concerned government bodies including CDS and the Securities Board of Nepal (Sebon) have to go fully digital within six months of the start of transactions of dematerialised shares.

According to CDS, all the 235 listed companies now have to start converting their share certificates into paperless format.

“We have issued the public notice to rush the listed companies to begin digitising their share certificates as soon as possible,” said a CDS official, adding that the system would reduce the time needed to complete the settlement of transactions to four days from the seven days needed for manual settlement.

The government has been mulling implementing online stock trading for the last few years. Nepse was established two decades ago, but it has not been able to install a completely online system.

Source: The Kathmandu Post