> NEPSE Home > Introduction
Nepal Stock Exchange, in short NEPSE, is established
under the company act, operating under Securities Exchange Act, 1983.
The basic objective of NEPSE is to impart free marketability and liquidity
to the government and corporate securities by facilitating transactions
in its trading floor through member, market intermediaries, such as
broker, market makers etc. NEPSE opened its trading floor on 13th January
Government of Nepal, Nepal Rastra Bank, Nepal Industrial Development
corporation and members are the shareholders of NEPSE.
The history of securities market began with the floatation of shares
by Biratnagar Jute Mills Ltd. and Nepal Bank Ltd. in 1937. Introduction
of the Company Act in 1964, the first issuance of Government Bond in
1964 and the establishment of Securities Exchange Center Ltd. in 1976
were other significant development relating to capital markets.
Securities Exchange Center was established with an objective of facilitating
and promoting the growth of capital markets. Before conversion into
stock exchange it was the only capital markets institution undertaking
the job of brokering, underwriting, managing public issue, market making
for government bonds and other financial services. Nepal Government,
under a program initiated to reform capital markets converted Securities
Exchange Center into Nepal Stock Exchange in 1993.
Members of NEPSE are permitted to act as intermediaries in buying and
selling of government bonds and listed corporate securities. At present,
there are 23 member brokers and 2 market makers, who operate on the
trading floor as per the Securities Exchange Act, 1983, rules and bye-laws.
Besides this, NEPSE has also granted membership to issue and sales manager
securities trader (Dealer). Issue and sales manager works as manager
to the issue and underwriter for public issue of securities whereas
securities trader (Dealer) works as individual portfolio manager.
At present there are 11 sales and issue manager and 2 dealers (Secondary
market). Click here
to get information of NEPSE members.
The tenure of the membership is one year. The license should be renewed
within 3 months after the closure of the fiscal year. If not, it can
be done within another three months by paying 25% penalty.
NEPSE the only Stock Exchange in Nepal introduced fully
automated screen based trading since 24th August, 2007.
The NEPSE trading system is called ‘NEPSE Automated
Trading System ‘(NATS) is a fully automated screen based trading
system, which adopts the principle of an order driven market.
Trading on equities takes place on all days of week
(except Saturdays and holidays declared by exchange in advance). On
Friday only odd lot trading is done.
The market timings of the equities are:-
Market Open: - 12:00 Hours
Market Close: - 15:00 Hours
Odd Lot Trading is done on Fridays. For Odd Lot Trading
Market Timings are
Market Open: - 12:00 Hours
Market Close: - 13:00 Hours
Note:- The exchange may however close the market on
days other than schedule holidays or may open the market on days originally
declared as holidays. The exchange may also extend, advance or reduce
trading hours when it deems fit necessary.
for Calendar year (2065/66) i.e 2009-04-14 to 2010-03-24
Securities Available for Trading
NEPSE facilitates trading in the following instruments
• Equity Shares
• Preference Shares
C. Government Bonds
D. Mutual Funds
NEPSE has implemented index-based circuit breakers
with effect from 2064/6/4 (21 September 2007). In addition to the circuit
breakers, price range is also applicable on individual securities.
Index-based Circuit Breakers
The index-based circuit breaker system applies at 3
stages of the NEPSE index movement of 3%, 4% and 5%, . These circuit
breakers when triggered bring about a trading halt in all equity.
• In case of 3% movement either way, there would
be a market halt for 15 minutes if the movement takes place during first
hour of trading i.e. 13:00 hours. In case this movement takes after
13:00 hours there will be no trading halt at this level and market shall
• In case of 4% movement either way, there would be a market halt
for half an hour if the movement takes place before 14:00 hours. In
case this movement takes after 14:00 hours there will be no trading
halt at this level and market shall continue trading.
• In case of 5% movement in either way, trading shall be halted
for the remainder of the day.
Price Range is applicable on individual securities.
The trading of the individual securities are not halted but allowed
to trade within the price range.
• The price band is 10% of previous close on
either way. *
* During the ATO session the range is 5% on either
way of Previous Close Price. After the band is 2% on either way of the
Last traded price till it reaches to 10% of the previous close.
The trading can be done either from NEPSE’s trading
floor or from the broker’s office. NEPSE uses sophisticated technology
through brokers can trade remotely from their office located inside
the Kathmandu valley. This remote trading facility was started from
1 November 2007.
NEPSE operates on the ‘NEPSE Automated Trading
System ‘(NATS), a fully screen based automated trading system,
which adopts the principle of an order driven market.
Order Matching Rules
The system adopts principle of order driven market.
The best buy order is matched with the best sell order. An order may
match partially with another order producing multiple trades. For order
matching the best buy order is the one with the highest price and the
best sell order is the one with the lowest price. This is because the
system views all buy orders available from the point of view of the
sellers and all sell orders from the point of view of the buyers in
the market. So, of all buy orders available in the market at any point
of time, a seller would obviously like to sell at the highest possible
buy price that is offered. Hence, the best buy order is the order with
the highest price and the best sell order is the order with the lowest
NEPSE has adopted a T+3 settlement system. Settlement
will be carried out on the basis of paper verses payment. The trading
is done at "T" and at T+1; the buying brokers have to submit
bank vouchers for settlement with covering letter. At T+2, the selling
brokers must submit share certificate with covering letter. At T+3,
NEPSE prepares billing for payment and this will be forwarded to the
Once the settlement is done the buying brokers with the consultation
of the clients must decide and present the purchased shares if they
want to record it as blank transfer. This must be completed within T+5.
Under this mechanism an opportunities to derive the
market benefit is provided. But presently, the buying brokers must complete
the BT process within T+5. The transactions that are executed can be
recorded in different way and NEPSE has considered all possible retention.
The followings are the major key points to be considered.
1. This is related only with buy of the securities.
2. The buyer may decide to have market benefit either to have capital
gains or to minimize the loss.
3. In order to do this s/he may partly send for name transfer or may
register it in blank transfer.
4. If s/he register total purchase in blank transfer and can put for
sale and if only the part of the shares are subscribed then s/he can
handover the part and the part can be forwarded for name transfer to
the concerned company. In order to do this s/he has to cancel the blank
transfer for that portion.
1. Brokerage for equity
||Up to 50,000
||> 50,000 & < 5,00,000
||> 5,00,000 & < 10,00,000
2. Brokerage for Government Bond
||Up to 5,00,000
||> 5,00,000 & < 50,00,000
3. Brokerage for all other stocks which is not
listed in 1 and 2.
||Up to 50,000
||> 50,000 & < 50,00,000