New TMS launched in stock market, NEPSE's monopoly ends

Kathmandu, October 6 — A new Trading Management System (TMS) has been launched in the secondary market of shares. The new TMS has been introduced by the broker company itself as an alternative to the TMS operated by the Nepal Stock Exchange (NEPSE). Secured Securities (Broker Number 36) is starting this system from today.

According to Santosh Mainali, the Executive Chairman of Secured Securities and also the Chair of the Nepal Stock Brokers Association, the company received approval to operate the new trading management system in Shrawan and has completed all necessary processes, including technical testing, to launch the system from Sunday. Investors using the broker account through this company can now trade using a new username and password without any additional fees.

Features of the new trading system

Mainali mentions that the new trading system offers some "unique" features compared to the facilities currently provided by NEPSE, making trading easier for customers.

The new system will be available in desktop, web, and mobile versions. This means investors can trade through Windows applications, mobile apps, and web browsers. However, the desktop version may take some time to be fully ready.

The new system aims to resolve issues related to share collateral. If a customer wants to take a loan against shares, the cumbersome process for managing share pledges and releases will be eliminated.

Currently, there are issues in the accounting between customers and broker companies. Due to these problems, disputes have frequently arisen between Sipla Securities and investor Deependra Agrawal. This case has reached CIB, NEPSE, and the Securities Board, but has yet to be resolved. Similar situations are also seen with other brokers and investors. The new TMS will provide clearer records of transactions based on share sales and payments, which is expected to resolve these disputes.

Additionally, the new TMS will offer free charts for technical analysis of shares, eliminating the need to pay for data.

One of the most significant features of this system is the ability to conduct transactions for all family members using a single login. Currently, each family member must use a separate username and password, and one must log out to log in again. Now, transactions for up to five members can be conducted with one login. However, the relevant individual must submit proof of family membership.

The new account will also provide information on portfolio management. While NEPSE's system offers portfolio insights, the new system is said to have additional features.

Until now, NEPSE has managed all transactions in the secondary market using TMS, which established NEPSE's monopoly over the trading system. This monopoly led investors to accuse NEPSE and its leadership of various malpractices. Investors' associations have claimed that issues in the system during market growth indicated NEPSE's interference.

With the new trading system, NEPSE is expected to be relieved from this burden. However, Mainali clarifies that there is no guarantee that problems won’t arise with the new system. "Until yesterday, NEPSE was blamed. If our system fails, we may also face similar criticisms. While we can't promise that there won’t be technical issues, increased competition will create more pressure to improve the system," he states.

When operating NEPSE's trading system, brokers were required to pay an annual fee of NPR 25,000. Another system would also require an upfront payment of NPR 10,000. This means brokers would save only NPR 15,000, and costs for the new system might exceed that amount, although Mainali did not disclose the exact fee.

No investment has been made by brokers for this system. The Trading Management System was developed by a company called DG Hub. Secured Securities only needs to pay a rental charge for using the system, and other securities companies will have to enter into agreements with the same company to purchase the system.