Nepal’s 34 broker companies will use the new TMS (Trade Management System). The new TMS system will break the monopoly of the NEPSE (Nepal Stock Exchange) -provided TMS- YCO. The new TMS coming to NEPSE is developed by Sri Lanka Developers and is being imported by the local representative DG Hub.
A new TMS will give stockbrokers an alternative for trading shares and make operations efficient. Security broker companies have been complaining that there is just one TMS for the transaction of securities in the secondary market. This issue seems to be solved as the majority of brokers are now set to use a new TMS platform.
TMS is used by brokers and investors to transact securities over the Internet. It enables brokers various operations such as portfolio management, transaction risk management, etc. On the other hand, investors can buy and share orders from the convenience of being on the go.
NEPSE has already ruled that brokers can use their own TMS for share-trading which also enables them to start using the new system.
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DG Hub bringing a new TMS for share-trading in the secondary market
NEPSE is currently testing the new TMS. Once in operation, it will be used by 33 old broker companies and 1 new. This means the end to the ostensive dominance of the YCO TMS in share trading.
Santosh Mainali, the former Chairman of the Broker Association, said that the new system was supposed to come into operation last November, but due to the delay in the amendment of the securities trading regulations, the plan is to implement it from the first week of January 2024.
“There is a provision in the securities trading regulations that a new TMS shall be tested one month prior to its operation. The test couldn’t be conducted in December due to electricity problems in NEPSE. But now, we are ready to start the business after testing in the first week of January”, said Mainali.
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When NEPSE started online service, it asked brokers to launch their own TMS however, as they went short on capacity, they requested NEPSE to build the system. Since then, broker companies have been relying on YCO-built TMS. Broker companies pay Rs 25,000 monthly to NEPSE for using its TMS. After using a new TMS, they will only have to submit Rs 15,000 in fees. Mainali added that after using a new TMS, 34 broker companies will also have to pay a fee to DG Hub.