User acceptance testing (UAT) of the software created to implement online stock trading will start on July 17, the Nepal Stock Exchange (Nepse) said.
The fully-automated online trading system, which will allow investors to post purchase and sales order and provide them payment, clearing and settlement facilities, will get final shape following the completion of UAT, said Nepse.
Nepse spokesperson Murahari Parajuli said Nepse had received bids from two Indian companies to carry out UAT and was evaluating their proposals. “After selecting one of the applicants, Nepse will implement the system alongside the existing computerized trading system from the start of the new fiscal year,” Parajuli said.
Parajuli said they would be performing UAT to ensure the effectiveness of the system prepared by the vendor company. “The test will be carried out for about three months, following which the platform will be made accessible to general investors.”
Nepse has developed 16 modules in association with software company YCO to implement the fully automated system. They include internal control system, such as listings, matching engine and index management and margin trading, among others.
The new system can handle nearly 23,000 transactions in a millisecond compared to an estimated 150,000 orders that the current system can accept in a day, Nepse said.
Following the launch of the fully automated system, stock investors will be able to post buy and sell orders and obtain related information using their computer, tablet or smartphone.
Similarly, investors will have access to payment, clearing and settlement online. This will reduce the dependency of stock investors on stockbrokers. It is expected to facilitate intraday trading of stocks too.
In order to use the online platform, investors will have to acquire login identification and password from their brokerage firm. Once they have done so, investors can post their orders to purchase or sell shares over the internet.
Last week, Nepse unveiled a work plan to enforce the system in an attempt to regain investor confidence following scepticism that it would actually be implemented. As per the schedule, Nepse linked the modules with four clearing banks on Monday. The modules will be shown to brokering companies on Tuesday and to representatives of the Nepal Investors Forum on Wednesday.
Internal testing of transactions started on Monday. Nepse will bring the new system into operation through its server on Thursday.