Over-the-counter (OTC) is the process of trading securities of companies that are not listed on a formal exchange such as the Nepal Stock Exchange (NEPSE). Securities that are traded over-the-counter are traded via a broker-dealer network as opposed to on a centralized exchange. These securities do not meet the requirements to have a listing on a standard market exchange.
Securities of various companies that have been delisted by Nepse, securities of companies that have not been listed due to non-fulfillment of requirements for listing, and securities issued by other public limited companies and government entities that have not been listed trade Over the Counter, according to the OTC (Over the Counter) Market Operation Regulations, 2065.
However, in a recent list of companies trading OTC published by NEPSE, Nepal Bank Limited is number one in the list of companies registered in its OTC market. This baffled investors because NBL's shares are also being traded in NEPSE's secondary market.
It is now known to us that NBL's shares aren't actually trading Over the Counter.
Nepal Bank Limited is Nepal's oldest bank. Nepse claims that Nepal Bank Limited was registered in the OTC market in 2068 BS. Later, the bank fulfilled the required criteria for listing in Nepse and has been trading in the secondary market since. United Modi Hydropower Limited (UMHL) is also such company trading both on the secondary market and on the OTC market.