KATHMANDU, April 30: Nepal Stock Exchange Limited (NEPSE) has directed brokerage firms not to accept stock purchase orders that exceed the collateral maintained by investors. The move aims to tighten the entry of buy orders and prevent irregularities in securities trading.
According to the new directive, trading members are prohibited from entering buy orders into the system that surpass an investor’s actual collateral limit. The guideline comes after several brokerage companies were found placing orders beyond their real capacity, thereby creating artificial demand in the secondary market.
Parliamentary committee to seek response from SEBON on issuance...
In a recent securities fraud case uncovered by the Central Investigation Bureau (CIB), suspects Deepak Bhatta and Sulav Agrawal traded shares through Bhrikuti Stock Broking Company, which allegedly provided excessive funding to Bhatta and his associates in violation of state rules. The broker reportedly issued billions of rupees to Bhatta to purchase shares of Himalayan Reinsurance Limited. The duo faces charges including money laundering, banking and insurance offenses, revenue evasion, and misuse of public property.
NEPSE stated that it issued the directive due to rising complaints that some trading members were inflating market demand by offering excessive margins. NEPSE has warned that violators will face action under existing laws, particularly the Securities Trading Operation Regulations 2018.
Additionally, NEPSE has instructed brokerage firms to comply with a rule requiring that at least 25 percent of the estimated amount be secured when entering an advance-based purchase order from a customer. “Brokers should not provide the facility to enter buy orders exceeding the investor’s collateral limit,” the guideline states.
