Investors Do Not Have to Make Advance Deposit on Each Transaction: SEBON Clarifies Confusion

A number of news portal sites had published news stating that SEBON has made a new arrangement that requires investors to make a 25% collateral deposit for each buying transaction in NEPSE. This invited a frenzy of reactions in the investor circle and social media. Some even attribute today's heavy loss to the confusion and pessimism created by this news.

Responding to such spread of false news and the irrational behavior that followed, the Securities Board of Nepal (SEBON) has unveiled a clarification notice today. The Board has stated that no additional arrangement has been made. Rather, SEBON had only referred to the 25% collateral arrangement that is already in implementation.

At the present, investors have to present a 25% collateral deposit, generally at the same time that they open their trading account. Thus, if an investor has submitted a cheque of Rs. 25,000 while opening his trading account, he can purchase securities of up to Rs. 1,00,000 at a time. However, this does not mean he has to deposit collateral on every purchase. The collateral is automatically replenished once the investor pays for the Rs. 1,00,000 worth of shares in full.

Clarifying on the matter, SEBON has also informed all the stakeholders of the exchange that they have held a meeting with NEPSE and the Broker association about integrating trading accounts of investors to their respective bank account and Depository participant. Since SEBON has already given a formal instruction to initiate integration, the Board believes this move will only make the stock exchange more investor-friendly, and not the other way around.