Investors of the country’s stock exchange market will be getting instant messages on whether or not their applications details to purchase primary shares are verified, as the Securities Board of Nepal (Sebon) endorsed a work procedure on the matter.
According to the Sebon, it recently approved a guideline and has forwarded it to CDS and Clearing for implementation. “The system enables investors to retrieve the real time data on the actual bank deposit amount while applying for the initial public offerings (IPOs),” said Suresh Neupane, spokesperson for the CDS and Clearing, adding that the frontline regulator will bring it into implementation following its board meeting.
Currently, investors applying to the newly-issued primary shares do not get instant information whether they are approved for the subscription. In the new provision, if the applicants do not have adequate bank balance, then the applications will be canceled.
As of now, the banks concerned take around one week to verify the bank account balance of the applicants. Taking advantage of the time lag in the system, a number of applicants, who do not have any bank balance, are even found applying for the IPOs. One of the fake transactions was traced in case of the IPOs floated by Ghorahi Cement a few months ago.
According to the Sebon, through the new system, the payment service providers can also provide real time transaction details about their clients applying for the IPOs.
