Nepal Stock Exchange (Nepse) has rolled out the much-awaited fully-automated trading system in the stock market. The new system will run parallel with the existing system for the time being.
The automated trading system, which has been named Nepse Online Trading System (NOTS), and came into operation from Tuesday will run parallel with the existing computerized trading system (CTS).
According to Nepse officials, the NOTS will come into full-fledged operation once the user acceptance test (UAT) of the new system is conducted by a third party and duly approved by the Securities Board of Nepal (Sebon).
Nepse has already selected an Indian firm to carry out UAT to make sure that the NOTS has been developed in line with the technical specification and system requirement specification.
Though the automated trading system was initiated long ago, the process was stalled amid controversy over the selection of vendor to provide such service. A case was also filed against the procurement process in the court.
Issuing a statement on Tuesday, Nepse has termed the implementation of automated trading system a ‘milestone’ in the capital market, stating that it will gradually attract more people in the secondary market.
“The third party will complete UAT and provide us the report within two months. Once we study the report and become confident that the system that we have developed is okay for operation, we will seek the approval of Sebon for its full-fledged implementation,” Murahari Parajuli, the spokesperson for Nepse, told Republica. “Only then it will fully replace the existing computerized trading system.”
Currently, investors, who get username and password from their brokerage firms, can only see the status of their orders in the trading system, according to Parajuli. “Until the new system comes into full-fledged operation, investors will not be able to execute their orders on their own as the order feature in the NOTS will be disabled during the trial phase,” he added.
Santosh Mainali of Secured Securities Pvt Ltd, a brokerage firm, said that investors can get username and password from their respective brokerage firms to use this new system. He added that transactions will be carried out from the existing computerized trading system while the data of such transactions will get migrated to the NOTS during this testing phase.
Mainali further added that investors, who use laptop or smartphone, can easily use the new system. “It is not much difficult. Anyone who uses laptop or smartphone can execute order under this system when it goes live. Also, the test phase could be a time for investors to get familiarized with the features in the new interface,” he explained.
The fully-automated trading system developed by YCO Pvt Ltd, an information technology firm, will allow investors to place orders online, while everything — payment, clearing and settlement – can be carried out electronically. But the NOTS will be limited to online ordering system until the banks roll out their payment processing system, according to brokerage firms.
Parajuli said the new system can handle nearly 23,000 transactions in a millisecond compared to an estimated 150,000 orders that the current system can accept in a day.