Nepse indecision delays CDS software delivery
KATHMANDU, DEC 23 -
Software for the country’s Central Depository System is set to be delayed further as the Nepal Stock Exchange (Nepse) has failed to come up with a clear idea on the type of software for its operations.
The software used in India enables to impose both transaction cost and the capital gain tax. However, the Nepal government imposes just capital gain tax. Indian imposes capital gain tax only when sales take place in less than a year of purchase.
As the introduction of software delayed, the CDS system has failed to come into full operation. The software helps clearing transactions electronically.
CMC, an Indian company commissioned to develop a software for CDS in Nepal, had suggested creating a software that enables to impose both transactions cost and capital gain tax like in India.
But the Finance Ministry rejected the suggestion saying that the software should be made suitable to the need of the country. Joint Secretary at the ministry Baikuntha Aryal said that the company had agreed to comply to the government’s demand to develop the software that imposes capital gain tax only.
He said that the government had held talks with the software developer eight months ago and there had not been further talks on the matter since. The Finance Ministry, however, asked Nepse, and CDS and Clearing Limited to study on whether it would be appropriate to make the software like the one used in India.
An official of Securities Board of Nepal said the government had asked them to conduct a study on the matter but that they are yet to conclude it.
Meanwhile, the plan to purchase software necessary for Nepse after the introduction of CDS system has not materialised yet. The capital market has not yet decided whether to purchase the software from South Korea, Singapore and India.
Earlier, Korea Exchange—the stock market of South Korea—had demanded stake in Nepse for providing the software. Nepse Chairman Jiva Nath Dhital said they were in talks with all three parties but yet to decide on the matter. “Korea Exchange asked for 10 percent stake in the company in return for all equipment, building and technology,” said Dhital.
Currently, there is a stake of the government, Nepal Rastra Bank, NIDC Development Bank and share brokers at Nepse. Existing software has been creating trouble to Nepse regularly, resulting in delays in taking orders from for purchase and sale of the shares.
Source: The Kathmandu Post
