Nepse directs all listed companies to apply for demat by August 16

ShareSansar, July 24:

In what may be dubbed as very positive and significant steps toward speedy implementation of CDS, Nepal Stock Exchange Limited (Nepse) has directed all the listed companies to apply for the dematerialization of its shares within the month of Shrawan (which ends on August 16).

The only stock exchange in the country has gone on to warn that it may be compelled to delist the companies if they fail to comply with this directive.
So far only around 17 companies have reached an agreement with CDSC, a subsidiary of Nepse, to dematerialize their stocks.

 In this regard, Nepse has directed all the broking companies to send all the clients' shares for the name transfer process from blank transfer (BT) status.

The stakeholders in the market have lauded the latest directive of Nepse as a bold move.

“We appreciate this bold move by Nepse. Now we are also planning to appeal to the share investors to open CDS account by Bhadra,” said Chairperson of Nepal Investors’ Froum Raj Kumar Timilsina. “Now, if Sebon also becomes bold enough, we will be trading only on demat shares by Kartik 2 (October 19) as per its directives.”


Nepse asks brokers, RTs to finish ownership transfer process within 15 days

Meanwhile, in another good move, Nepse has directed all the broker companies and the RTS companies to finish the ownership transfer process within 15 days time.

Nepse has issued written directive to all the brokers and RTS companies, following a directive from the Commission for the Investigation of Abuse of Authority (CIAA) to Nepse to ask the stakeholders to comply by various provision of Company Act-2063 on ownership transfer.

The constitutional anti corruption body has pressed Nepse to act tough on the brokers and RTS after some investors lodged complaints with the CIAA against the alleged irregularities on the part of the brokers and RTS.

Nepse has even warned to recommend Sebon to initiate action against those brokers and RTS as per Securities related Act 2063, which fail to comply with the latest directive. As per the article 88 and 89 of the Act, Sebon can even terminate licenses of the brokers and RTS if they fail to adhere to the Act.
 
Presently it takes around 2-3 months on an average while some RTS takes much more time to transfer share ownership following the transaction. This has not only victimized hundreds of share investors who could not trade their shares when they want.

“We strongly welcome this decision of Nepse,” says Timilsina. “This has come as such a big respite to the investors, who have been suffering for too long due to the weaknesses of the brokers and RTS.”