The Securities Board of Nepal (SEBON) — securities market regulator — has instructed CDS and Clearing Ltd to provide a month’s time to the banks and financial institutions (also working as depository) for the execution of the centralised ASBA (Applications Supported by Blocked Amount) system.
Issuing a circular, the securities market regulator has urged CDS and Clearing Ltd, a subsidiary of Nepal Stock Exchange (Nepse) to defer the schedule for a month to give the banks and financial institutions (BFIs) more time to make necessary preparations.
Under the ASBA system, BFIs have been providing services of share application (IPOs/FPOs) in the primary market from their branch networks after the instruction of SEBON. ASBA has been fully implemented since last year.
To bring all the ASBA service providing BFIs into the centralised system, CDS and Clearing Ltd has provided the BFIs the required software. However, BFIs need to train their human resources to operate the system provided by CDS and Clearing Ltd and also to manage some technicalities. For example, the bank account number given to the depository, which holds securities account, needs to be the same while applying for shares during IPOs and FPOs. Through this the depository will transfer the cash dividend to the account of the BFIs, according to Neeraj Giri, executive director of SEBON.
“For these preparations, we have instructed CDS and Clearing Ltd to give an additional one month time to depositories as they have to train their staffers and verify the bank account numbers with the securities account holders.”
Source: The Himalayan Times