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Nepse to introduce by-laws to check malpractices in share market

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Nepse to introduce by-laws to check malpractices in share market
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September 9: Nepal Stock Exchange (Nepse) is working on securities transaction by-law-2015 to check and discourage malpractices in the share market.

The new by-law will incorporate lessons learnt by the exchange when dealing with malpractices prevalent in the market.

“Although the transactions carried out in the stock market are legal, in practice, the provisions we have leave room for the legality to be questioned,” said Nepse General Manager Sitaram Thapaliya. Around a year ago Nirmal Pradhan of NB group had taken loan, on behalf of a third person, from a bank keeping NB Bank promoter Laxmi Bahadur Shrestha’s shares as collateral. But the shares which were kept as collateral, were still being traded in the market, and ordinary investors had bought the shares. There are other similar cases such as the one involving Nepal Share Market (finance company) and Citizen’s Investment Trust.

Similarly, the new by-laws will have provision of allowing block trading even outside the market, and rules to make the investors more accountable. It will also pave the way for investors to place buy and sell orders online.

Nepse has invited stakeholders for a discussion on the issue on Friday. It is preparing to submit a draft of the bylaws to the securities and exchange board within two weeks. 

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